On the heels of OpenAI announcing the latest iteration of its GPT large language model, its biggest rival in generative AI in the U.S. announced an expansion of its own. Anthropic said Monday that Claude, its AI assistant, is now live in Europe with support for “multiple languages,” including French, German, Italian and Spanish across […]
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Paris-based Mistral AI, a startup working on open source Large Language Models — the building block for generative AI services — has been raising money at a $6 billion valuation, three times its valuation in December, to compete more keenly against the likes of OpenAI and Anthropic, TechCrunch has learned from multiple sources. We understand […]
© 2024 TechCrunch. All rights reserved. For personal use only.
Allozymes’ ingenious method of quickly testing millions of bio-based chemical reactions is proving to be not just a useful service, but the basis of a unique and valuable dataset. And where there’s a dataset, there’s AI — and where there’s AI, there are investors. The company just raised a $15 million Series A to grow its business from a helpful service to a world-class resource.
We first covered the biotech startup in 2021, when it was taking its first steps: “Back then we were less than five people, and at our first lab — a thousand square feet,” recalled CEO and founder Peyman Salehian.
The company has grown to 32 people in the U.S., Europe and Singapore, and has 15 times the lab space, which it has used to accelerate its already exponentially faster enzyme-screening technique.
The company’s core tech hasn’t changed since 2021, and you can read the detailed description of it in our original article. But the upshot is that enzymes, chains of amino acids that perform certain tasks in biological systems, have until now been rather difficult to either find or invent. That’s because of the sheer number of variations: A molecule may be hundreds of acids long, with 20 to choose from for each position, and every permutation potentially a totally different effect. You get into the billions of possibilities very quickly!
Using traditional methods, these variations can be tested at a rate of a few hundred per day in a reasonable lab space, but Allozymes uses a method in which millions of enzymes can be tested per day by packing them in little droplets and passing them through a special microfluidics system. You could think about it like a conveyor belt with a camera above it, scanning each item that zooms by and automatically sorting them into different bins.
Droplets containing enzyme variants are assessed and if necessary redirected in the microfluidic system. Image Credits: Allozymes
These enzymes could be just about anything that’s needed in the biotech and chemical industry: If you need to turn raw materials into certain desirable molecules, or vice versa, or perform numerous other fundamental processes, enzymes are how you do it. Finding a cheap and effective one is seldom easy, and until recently the entire industry was testing about a million possibilities per year — a number Allozymes aims to multiply over a thousandfold, targeting 7 billion variants in 2024.
“[In 2021] we were just building the machines, but now they’re working very well and we are screening up to 20 million enzyme variants per day,” Salehian said.
The process has already attracted customers across a number of industries, some of which Allozymes can’t disclose due to NDAs, but others have been documented in case studies:
I asked about the possibility of microplastics-degrading enzymes, which have been a target of much research and also figure in Allozymes’ own promotional materials. Salehian said that while it’s possible, at present it isn’t economically feasible under their current business model — basically, a customer would need to come to the company saying, “I want to pay to develop this.” But it’s on their radar, and they may be working in plastics recycling and handling soon.
So far this has all more or less fallen under the company’s original business model, which amounts to enzyme optimization as a service. But the roadmap involves expanding into more from-scratch work, like finding a molecule to match a need rather than improving an existing process.
The enzyme-tailoring service Allozymes has been doing is to be called SingZyme (as in single enzyme), and will continue to be an entry-level option, filling the “we want to do this 100x faster or cheaper” use case. A more expansive service called MultiZyme will take a higher-level approach, discovering or refining multiple enzymes to fulfill a more general “we need a thing that does this.”
The billions of data points they collect as part of these services will remain their IP, however, and will constitute “the biggest enzyme data library in the world,” Salehian said.
CEO Peyman Salehian and CTO Akbar Vahidi, co-founders of Allozymes. Image Credits: Allozymes
“You can give the structure to AlphaFold and it will tell you how it folds, but it can’t tell you what will happen if it binds with another chemical,” Salehian said, and of course that reaction is the only part industry is concerned with. “There’s no machine learning model in the world that can tell you exactly what to do, because the data we have is so little, and so fragmented; we’re talking 300 samples a day for 20 years,” a number Allozymes’ machines can easily surpass in a single day.
Salehian said that they are actively developing a machine learning model based on the data they have, and even tested it on a known outcome.
“We fed the data to the machine learning model, and it came back with a new molecule suggestion that we are already testing,” he said, which is a promising initial validation of the approach.
The idea is hardly unprecedented: We’ve covered numerous companies and research projects that have found machine learning models can be very helpful in sorting through huge datasets, offering extra confidence even if their outcomes can’t be substituted for the real process.
The $15 million A round includes new investors Seventure Partners, NUS Technology Holdings, Thia Ventures and ID Capital, with repeat investment from Xora Innovation, SOSV, Entrepreneur First and Transpose Platform.
Salehian said the company is in great shape and has plenty of time and money to achieve its ambitions — with the exception that it may raise a smaller amount later this year in order to fund an expansion into pharmaceuticals and open a U.S. office.
TechCrunch recently broke the news that Elon Musk’s xAI is raising $6 billion at a pre-money valuation of $18 billion.
The deal hasn’t closed yet, so the numbers could change. But it sounds like Musk is making an ambitious pitch to investors about his 10-month-old startup — a rival to OpenAI, which he also co-founded and is currently suing for allegedly abandoning its initial commitment to focus on the good of humanity over profit.
You may be wondering: Doesn’t Musk have enough companies already? There’s Tesla, SpaceX, X (formerly Twitter), Neuralink, The Boring Company … maybe he should spend his time on the existing businesses that have struggles of their own.
But in the xAI pitch, Musk’s connection to these other companies is a feature, not a bug. xAI could get access to crucial training data from across his empire — and its technology could, in turn, help Tesla achieve its dream of true self-driving cars and bring its humanoid Optimus robot into factories.
Of course, Musk’s hype doesn’t always match up to reality. But with this impressive new funding, xAI could become an even more formidable competitor in the AI world. Hit play, then leave your thoughts below!
Global Founders Capital, the Berlin-based early stage VC firm with close ties to the German startup factory Rocket Internet, is going to become the venture arm of Rocket Internet.
The VC previously raised two $1 billion funds and, just a few years ago, its name appeared in dozens of deals per year. But then, things quietened down. Now we know why: Going forward, it’ll exclusively invest from Rocket Internet’s balance sheet.
Last year the Financial Times reported that Global Founders Capital was in the middle of a big strategic shift. A couple of weeks ago the VC firm reached out to TechCrunch to confirm the pivot and discuss the reasons behind the shift.
“To be transparent, there have been quite a few changes at Global Founders Capital in recent years — in terms of the structure of the fund and the composition of the team,” Global Founders Capital Partner David Sainteff (pictured above) told us.
Sainteff said the firm decided it’s not the right time to raise another fund because it’s not a great time to invest as they do not believe there are that many good opportunities that meet the firm’s criteria and that they don’t need more capital to remain competitive against other investors for deals.
Global Founders Capital was originally structured as a traditional VC firm with several limited partners participating in funds. With its first fund, it backed then-future unicorns such as Personio, Revolut and SumUp. With its second fund, the firm invested in several companies TechCrunch has also covered, such as Pennylane, Ankorstore and Seyna.
Prior to joining Global Founders Capital, seven years ago, Sainteff worked for Rocket Internet which was an investor in Global Founders Capital from the beginning. So there have been close ties between them since the beginning.
“Following the deployment of this second fund, we decided not to raise another fund. Instead, we’ll use Rocket Internet’s capital,” he confirmed. “We have €300 million to deploy for venture investments on the balance sheet. We don’t have any fundraising planned.”
Frankly, this is a bit odd as the firm’s past performance seems quite good. According to Sainteff, the first fund is going to generate returns between 3x and 4x. “For the second fund, it’s far too early [to say],” he continued. “But we have a few clear winners like Pennylane. We entered at the pre-seed stage and the company is worth over €1 billion.”
The new strategy means Global Founders Capital is now much smaller than it used to be, with only five partners left: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff and of course Rocket Internet co-founder and CEO Oliver Samwer.
The new version of the firm will also only focus on early stage investments, plus the ability for follow-on investments in later rounds (Series A, B, C, etc).
Did Global Founders Capital choose not to raise a third fund because it didn’t get enough support from potential limited partners or because of the current tech downturn compared to 2021 (with the exception of the boom in artificial intelligence)? Probably the decision hinged on a bit of both.
“It wasn’t the best moment to raise funds with [limited partners],” Sainteff told us. “We think it was difficult to have the imperative to deploy capital.”
“It’s an easy decision to make when you have €300 million in the bank,” he added. “If other VC firms were in the same boat, they would have made the same decision. We don’t rule out the possibility to raise a fund when the conditions are right and favorable.”
For now, the pivot reverses much of the fund’s earlier expansion, when it scaled into more geographies, tech areas and funding stages and the Global Founders Capital name was attached to a bunch of deals.
Perplexity, the AI search engine startup, is a hot property at the moment. TechCrunch has learned that the company is currently raising at least $250 million more at a valuation of between $2.5 billion and $3 billion.
The news comes on the heels of two other big fundraises that have seen company’s valuation leapfrog in the last four months: in January the company raised nearly $74 million at a valuation of $540 million (up from $121 million in April 2023). And at the beginning of March, the company closed $56 million on a valuation of $1 billion — a raise that has been quietly public since then (it was on PitchBook’s database for one), and which Bloomberg highlighted earlier today.
Those two reported rounds are not the full story. We understand from multiple sources close to the company that it is actually also raising a further round to capitalize on the attention it’s getting in the market. NEA and IVP, both previous backers of the company, are among those looking to invest in this larger round, according to sources.
Whether they or other previous backers participate, a source said, may depend on how willing Perplexity is to work with existing investors rather than diversity, expanding its cap table to bring in new investors.
“They are growing very rapidly,” a partner from an existing investor said. “Yes we will look to participate.”
The core of Perplexity’s product is a generative AI-based search engine that provides results using a chatbot-style interface. It’s definitely not the only company in generative AI pursuing the search opportunity: that is essentially how many people are using products like ChatGPT and Microsoft’s Bing (powered by OpenAI), and Google is making a big push to improve search results with its Gemini LLM.
But Perplexity is building its algorithms incorporating a variety of LLMs, the idea being that this produces a more accurate and richer response.
“Unlike other enterprise tools for knowledge work like Microsoft Copilot, Perplexity Enterprise Pro is also the only enterprise AI offering that offers all the cutting-edge foundation models in the market in one single product: OpenAI GPT-4, Anthropic Claude Opus, Mistral, and more to come,” CEO and co-founder Aravind Srinivas noted earlier today. “This gives customers and users choices to explore and customize their experience depending on their use cases.” That “more to come” may well be including more from Hugging Face and Meta, if Srinivas’s public endorsements and investor lists are anything to go by.
Considering that the company has only been around since 2022, Perplexity’s current investor list is already long, running to 46 names according to PitchBook data.
In addition to IVP and NEA, it includes other notable VCs such as Sequoia, Bessemer and Kindred; strategic backers like Nvidia, Databricks and Bezos Expeditions; and many recognizable individuals such as Jeff Bezos, Meta’s chief AI scientist Yann LeCun, Naval Ravikant, Susan Wojcicki, Elad Gil, Nat Friedman, and Clément Delangue from Hugging Face. A newer backer, Daniel Gross, led the $56 million round from March with other new backers Stanley Druckenmiller, Y Combinator head Garry Tan and Figma’s CEO Dylan Field also participating, among others.
One fundraise coming rapidly on the heels of another is reminiscent of rolling fundraising that we’ve seen from other big startups over the years. In the years leading up to is IPO during a time of rapid growth and major attention, Snap regularly appeared to be raising money on an ongoing basis. These days, it appears to be all about AI, with companies like OpenAI, Anthropic and Mistral all raising at a rapid pace and seeing their valuations skyrocket along with that.
In the case of Perplexity, the startup is standing out in the market for a couple of reasons. Most obviously, it’s one of the ambitious, albeit smaller, hopefuls in the race to build generative AI services. Its unique position in the market is that it’s not focused on the race to build multi-purpose large language models. Instead, taking a page from one of the biggest technology companies in the world today, it is tacking one specific product, at least for now: search.
Perplexity is not the only startup in AI that is building on very focused opportunities and by targeting enterprise. Synthesia in the UK is taking a similar approach with AI video tools, aiming them specifically at the business market, for the building of training and customer support video content.
In the case of Perplexity, the startup offers its tools on free and enterprise, paid tiers, and so far its processed 75 million queries this year and is currently on ARR of $20 million, according to Bloomberg.
Its reason for raising again so soon? Yes, perhaps to capitalize on customer and investor interest at what one investor described as a “zeitgeist moment” for the startup. But also because of the mechanics of building any kind of AI service right now.
“Compute is very expensive, so they may need to raise” for that reason alone, one said.
We have reached out to Srivinivas for comment and will update this post as we learn more.
Climate investor Bay Bridge Ventures is raising a new $200 million fund, TechCrunch has exclusively learned.
Bay Bridge filed paperwork Monday for the new climate fund with the U.S. Securities and Exchange Commission. The raise comes at a time when venture investors are increasingly bullish on climate tech.
Though the last few years have been marked by a downturn in the general venture market, a number of firms have raised eye-popping sums to back climate tech founders. SOSV announced on Tuesday a $306 million deep tech fund that will be 70% focused on climate. New Summit Investments is raising a $100 million impact fund. And Congruent Ventures raised a $275 million fund in 2023, turning down $325 million in additional LP interest.
The difference, though, is that those are all relatively established firms. Bay Bridge Ventures is new, having been founded in 2022 with a focus on ESG more broadly and sustainability in particular. Though the firm participated in a $10 million round for SailPlan in 2022, according to PitchBook, it doesn’t appear to have any other investments or funds on record, based on a search of SEC filings and PitchBook data.
Still, that doesn’t mean Bay Bridge lacks experience. General partner Andrew Karsh left pension fund CalPERS to co-found the firm. His co-founders Joe Blair and Kim Kolt aren’t new to the scene, either. Blair previously worked at Cota Capital and Obvious Ventures and currently hosts the Epic Human Podcast. Kolt founded For Good Ventures and previously worked at Goldman Sachs and Deutsche Bank.
The firm did not reply to a request for comment prior to publication.
The team’s previous investments span a range of industries, including sustainable shoe company Allbirds, electric grid software startup Arcadia, fleet EV charging company Amply, and space launch startup Astra.
New Summit Investments is raising a new $100 million impact fund, according to documents filed with the SEC. The hefty new fund, should it be raised, will let it continue investing in managers backing startups and other companies focused on environmental and social problems.
This is the firm’s fifth fund and marks a sizable jump from the $40 million of its previous fund, which closed back in 2022. New Summit invests in various other funds, including venture capital, real estate investors and infrastructure investors. It currently has $115 million in assets under management, according to PitchBook.
New Summit declined to comment on the new fund’s strategy or timing, citing security regulations. “We launched one of the first multi-manager strategies for private market impact investing in 2016 and are pleased to be continuing this work,” Casey Dilloway, the firm’s managing director, told TechCrunch.
The size of the new fund suggests that it is bullish that it can convince LPs to open their wallets based not only on the firm’s investment history but also on its impact-focused approach. The fund-of-funds approach helps smaller investors place bets by finding the best-performing firms that also hew to their environmental and social requirements.
The SEC form indicates that New Summit is early in its fundraising process, and hasn’t secured any capital commitments yet. So, this is an interesting test case on if investors still have an appetite for ESG. The minimum investment is $250,000, the form says, indicating that the firm intends to approach investors of various sizes and risk appetites.
One thing going for this fundraise is New Summit’s interest in climate tech, which has bucked trends in venture capital, with deal counts remaining high throughout 2023, according to PitchBook. Last year, total investment hit $41.1 billion. While that’s off a peak of $51 billion in 2021, VCs say that climate remains one of two hot sectors where deals close fast. AI is, of course, the other.
Although the explicit focus on diversity, equity, and inclusion might be under fire from commentators, there is still a pressing need to provide opportunities to underrepresented founders, who tend to take more inclusive approaches to technology and business. New Summit has supported marginalized fund managers by launching initiatives like its partnership with investment firm Gratitude Railroad to source and underwrite underrepresented fund managers.
New Summit has also invested in several diverse fund managers who specialize in climate and health, including Black Opal Ventures and Buoyant Ventures, in addition to a range of other climate tech VCs, including ArcTern, Al Gore’s Generation Investment Management and Obvious Ventures.
New Summit Investments’ was founded in 2016 as an impact investment firm focusing on climate, health and economic opportunities. Its thesis adheres to the UN’s 17 Sustainable Development Goals, a framework to help create a more equitable planet by addressing issues such as access to clean water, quality education and poverty reduction.
New Summit Investments’ first fund closed for $20 million in 2016, followed by $36 million in 2018, according to PitchBook.
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