Iyo represents a third form factor in the push to deliver standalone generative AI devices: Bluetooth earbuds.
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Arati Prabhakar, profiled as part of TechCrunch’s Women in AI series, is director of the White House Office of Science and Technology Policy.
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Accurate weather forecasts are critical to industries like agriculture, and they’re also important to help prevent and mitigate harm from inclement weather events or natural disasters. But getting forecasts right is extremely difficult. That’s why the founders of WeatherXM have been looking to make weather forecasts more accurate for the past 12 years. In 2012, […]
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Charging has long been the Achilles’ heel of electric vehicles. One startup thinks it has a better way for apartment dwelling EV drivers to charge overnight.
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Hans Tung, a managing partner at Notable Capital, formerly GGV Capital, has a lot of thoughts on the state of venture today.
Notable Capital is a venture firm with $4.2 billion in assets under management, focusing on investments in the U.S., Latin America, Israel, and Europe.
Tung, whose portfolio includes the likes of Airbnb, StockX and Slack, recently sat down with TechCrunch’s Equity Podcast to discuss valuations, why founders need to play the long game and why some VC firms are struggling.
He also let us know why he’s still bullish on fintech and what sectors in the fintech space have him especially excited.
We also discussed recent changes at his own firm, which evolved from 24-year-old cross-border firm GGV Capital and rebranded its U.S. and Asia operations to Notable Capital and Granite Asia, respectively. GGV’s transformation is the latest in a string of changes we’ve seen in the world of venture capital, including personnel shifts at Founders Fund, Benchmark and Thrive Capital.
Below are excerpts from the interview, which has been edited for clarity and brevity.
TechCrunch: Last year, we talked about down rounds. At the time, you thought they were not necessarily a bad thing. Do you still have that same mindset?
Hans Tung: I’ve been in this biz for almost 20 years. We’re long-term in the way we approach things. And I always know that it doesn’t matter about the markups. This is like getting a poor [report] card, or getting a test exam score, it doesn’t really matter until you actually have an exit. IPO is actually just a milestone, not the end game. IPO is the beginning for public investors to be along for the ride. So if you think longer term, valuation up or down temporarily doesn’t matter as much as generating a big outcome at the end.
I think that whatever it takes to scale the business is what the company and the founders and board need to focus on doing to manage the business the best they can every step of the way.
I think that what founders don’t realize is that this choice is not between shutting down and do a down round, because in that situation, you will choose a down round every single time. The challenge is when you are faced with the prospect of holding on to a valuation, or raise a down round. If you don’t do it, you run the risk of shutting down later. But I’ll tell you if you’re close to shutting down, no one’s gonna invest in you
TC: Overall, with regards to the investing landscape, how different is it so far this year compared to last?
HT: I think it’s a continuation of what we saw in the second half of 2023. Obviously, AI is an outlier. AI is way, way overvalued right now. You could argue that we’re only in the first inning, or the first half of the first inning for AI, so people are willing to overpay…You do see a lot of crazy rounds happening at the beginning of a boom, but there will be bifurcation, and there will be companies that end up doing great, and most companies may not.
For the most part, I still caution founders to not compare themselves with sectors are doing well, but fully focus on managing their business.
TC: How is your pace of investing compared to recent years? How have VC firms been impacted by the slowdown?
HT: I think we’re more at the 2022 level. So more than 2023. But 2021 was an outlier. And it’s not good for business. And it’s not good for the ecosystem. Without naming names, you do see firms being impacted by what what they were doing in 2021 and that has made them slow down a lot more now, which is unfortunate, because many of them are great investors, they’re in great companies, and it’s too bad that they cannot participate as a result of just indigestion.
For example, some companies raised a large round in 2021. And even though the business is growing revenue about 40% to 50% year on year and they can probably IPO soon in the next year or so from a maturity standpoint…but because the valuation they raised in their last round is so high, that they are not at that level of valuation in the current public market, where the multiples have compressed quite a bit. So they have to wait. And as a result, the funds that invested in them in 2021 cannot get cash back, because there’s lack of liquidity and the LPs cannot get money back either. So we don’t have that recycling of money going back to the LPs who continue to invest in new funds. The whole system suffers as a result.
TC: I was surprised to report recently that funding in the fintech space had dropped to its lowest level in seven years in the first quarter of this year. What do you think about that?
HT: I think for fintech, given the high inflationary environment that we had, and definitely high interest rate that’s coming down, but not coming down quickly – it is harder for people to decide about fintech. But if you look at the other set of metrics, financial services as a category, the market cap of all public companies in the banking insurance financial service space is over $10 trillion. And of that $10 trillion, only less than 5% are in fintech companies. And so if we all know that the best fintech companies are growing faster than financial service companies, it’s just a matter of time that low single digit penetration and market cap will increase over time. So it will have ups and downs. Like ecommerce, fintech might not have too many winners, but the ones that can win can have a huge market.
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Though many eyes are on space as orbit develops into a thriving business ecosystem, Radical is keeping things a little closer to the ground — but not too close. Its high-altitude, solar-powered aircraft aim to succeed where Facebook’s infamous Aquila failed by refining the tech and embracing more markets.
It’s hard to believe that Facebook’s ambitious plan to use solar-powered aircraft to provide internet access in far-flung locations got its start a decade ago. But though those dreams came crashing down when the project was scuttled, the concept remained intact.
Ultra-lightweight aircraft in the stratosphere can, in theory, stay aloft almost indefinitely by powering their propellers via solar panels. Load it up with sensors, telecommunications gear, or anything else and you’ve got a versatile, mobile asset that isn’t hindered by orbital mechanics or chaotic weather patterns.
Radical CEO James Thomas suggested that the tech just wasn’t ready before now.
“There’s been interest in these high alt high end aircraft for a long time,” he told TechCrunch in an interview. “It’s not a new idea, but in the past few years a lot of the supporting technologies have really matured — batteries, solar, even advanced compute. Look at where we’re at with battery tech now: we’re almost at 2x [of Aquila’s]. That puts us in a really strong position.”
The Seattle-based startup has raised a $4.5 million seed round to take it from a small-scale demonstrator aircraft, which it successfully flew for 24 hours straight recently, to a full-scale one. This full-size craft would have a wingspan around 100 feet, but weigh “as much as a person,” which I took to mean 100-200 pounds.
Radical’s founders hold the sub-scale demonstrator aircraft.
Putting the full-scale aircraft into the stratosphere is Radical’s primary goal, but that hasn’t stopped them from scouting out possible use cases.
“We think of what we’re developing as a platform for persistent airborne infrastructure,” he said, but for use cases where an orbital asset isn’t practical. For instance, orbital imagery of an area at risk of wildfires might come in once an hour — far too slow for a rapid response. But a high-altitude aircraft could provide 24/7 live monitoring for weeks straight, or even change its location to track new threats.
For telecommunications, although Starlink is rapidly emerging as the go-to solution for connectivity in remote areas, it has important limits, like the need for precision ground infrastructure. There are plenty of cases where a flying 5G station is a better bet (though you still need work out the backhaul).
Radical was one of my picks from Y Combinator’s early 2023 batch, and I wrote at the time:
I always thought the idea was compelling but had yet to find its business model. Connectivity anywhere may be a huge new differentiator for mobile networks, and I bet satellites will be useful but expensive and congested. Why not a giant glider? It’s equally weird, but I appreciate the ambition.
Apparently I was correct!
One nice advantage of working in the stratosphere, Thomas pointed out, is that you have a significantly reduced regulatory load. Up above the closely monitored urban and commercial airspaces, it’s much simpler to operate and faster to get approvals.
Radical isn’t the only company looking into this; the AALTO project at Airbus aims to fill a similar gap in telecoms coverage, and Skydweller’s much larger platform (600 kilograms of batteries alone) is looking to enter a surveillance and intelligence role with a Palantir partnership.
Thomas said their advantage comes from a close relationship with the companies they work with, who “really want to be hands on with the system.” Not a one-size-fits-all platform, then, but also not purely bespoke — it depends on the customer (though he called them customers, they aren’t the paying type yet; the company is pre-revenue).
For now the goal is to get into the air within the next 12 months, proving the full-size craft can fly and putting them in a position to, presumably, start accepting money.
The seed round was led by Scout Ventures, with additional funding from investors including Inflection Mercury Fund and Y Combinator.
Meta continues to field criticism over how it handles younger consumers using its platforms, but the company is also planning new products that will cater to them. On Monday, the company announced that later this year it will be launching a new education product for Quest to position its VR headset as a go-to device for teaching in classrooms.
The product is yet to be named, but in a blog post describing it, Nick Clegg, the company’s president of global affairs — the ex-politician who has become’s Meta’s executive most likely to be delivering messaging around more controversial and divisive topics — said that it will include a hub for education-specific apps and features, as well as the ability to manage multiple headsets at once without having to update each device individually.
Business models for hardware and services also have yet to be spelled out. With nothing on the table, the company is framing it as a long-term bet.
“We accept that it’s going to take a long time, and we’re not going to be making any money on this anytime soon,” Clegg said in an interview with Axios.
On the plus side, a push into education could mean more diversified content for Quest users, along with a wider ecosystem of developers building for the platform — not the killer app critics say is still missing from VR, but at least more action.
On more problematic ground, the news is coming on the heels of a few other developments at the company that are less positive. Meta’s instant messaging service WhatsApp has been getting a lot of heat over the fact that it is lowering the minimum age for users to 13 in the UK and EU (it had previously been 16).
Monday’s announcement arrives on the heels of Meta prompting Quest users to confirm their age so it can provide teens and preteens with appropriate experiences.
The new initiative will roll out later this year and will only be available to institutions with students 13 years old and up. Meta said it will launch it first in the 20 markets where it already supports Quest for Business, Meta’s workplace-focused $14.99/month subscription. That list includes the U.S. Canada, the United Kingdom and several other English-speaking markets, along with Japan and much of western Europe.
There are a number of companies already in the market exploring the idea of VR in the classroom, with names like ImmersionVR, ClassVR and ArborVR, not to mention the likes of Microsoft, which has been pushing its HoloLens as an educational tool for a while now.
It’s not clear how ubiquitous VR use is in schools: one provider, ClassVR, claims that 40,000 classrooms worldwide are using its products.
But all the same, there remain hurdles to mass market usage. It’s not clear, for example, whether strapping a headset to someone’s face is necessarily a help in a live, educational environment, considering some of the research around young people already getting too much screen time as it is.
And another big question mark will relate to the cost of buying headsets — Quest 3’s, the latest headsets, start at around $500 apiece for basic models — buying apps and then subsequently supporting all of that infrastructure. Meta said that it has already donated Quest headsets to 15 universities in the U.S., but it’s not clear how far it will go to subsidise growth longer-term.
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