Startups Weekly: Trouble in EV land and Peloton is circling the drain
Welcome to Startups Weekly â Hajeâs weekly recap of everything you canât miss from the world of startups. Sign up here to get it in your inbox every Friday.
Look, I know this is our startups weekly newsletter, and as the most valuable company in the world, Apple is kind of the ultimate ânot a startup,â but judging by the traffic on the site, yâall are such rabid fans that it seems rude not to do a quick roundup: Apple ran a short, 40-ish minute event this week, where it showed off new iPad Airs, new iPad Pros (with a fancy new stacked screen technology), a new Magic Keyboard, a new Pencil Pro, brand-new M4 chips, and much more. Oh, and they finally âadmittedâ that iPads are more like little laptops than big iPhones, so the company moved the camera to the landscape edge â where it shoulda been all along, honestly.
Ooh! And I have some fun personal news: Iâm joining the TechCrunch Equity podcast as a co-host, alongside the formidably wonderful (and wonderfully formidable) Mary Ann Azevedo. You know, just in case you wanted my zany humor in your ear-holes, in addition to into your eye-holes.
Most interesting startup stories from the week
Buckle up for a wild ride as we delve into the saga of Newchip, an accelerator that promised startups a golden ticket to success, but instead led them straight to bankruptcy court. Lacey Hunter thought sheâd hit the jackpot with her AI humanitarian aid startup TechAid when she joined Newchipâs program. Spoiler alert: She didnât. Instead of accelerating to glory, Newchip filed for bankruptcy and auctioned off warrants from 1,000+ startups in an equity yard sale. And poor Hunter? She had no choice but to shut down TechAid amid this hot mess.
In a spicy turn of events, Microsoft just hit CTRL + Z on U.S. police departments using its Azure OpenAI Service for facial recognition. This update to their T&Cs was as subtle as a rhino in a china shop. In a nutshell: If you have a badge, a handlebar mustache and a pair of mirror aviators, then no AI face games for you!
- Rabbit R1 isnât actually meant to be good (yet): The rabbit r1 is an AI gadget that apparently came out of the oven quicker than a batch of undercooked cookies. Packed with more quirks than app integrations, this lilâ carrot muncher makes you question if it couldâve just been another app on your phone. But for now, thatâs kinda the point, Devin argues.
- I got 99 problems, but the tech ainât one: Rappers Kendrick Lamar and Drake have taken their feud to new heights â or should we say, depths? Itâs all fun and games until Tupac gets deepfaked into your track.
- On yer bike: In todayâs episode of âHow to Tank a $50 Billion Company,â Peloton, the once glittering star of home fitness, continues its trudge on the sad treadmill of misfortune. Theyâre axing 15% of their workforce (thatâs about 400 people for those allergic to percentages), proving that math is indeed a cruel mistress.
Trouble in the transportation trenches
Henrik Fiskerâs EV startup, Fisker Inc., is having a bit of a midlife crisis. After launching two prototypes last August â the Pear and Alaska â it has allegedly stiffed the engineering firm that helped develop them. The firm, Bertrandt AG, filed a $13 million lawsuit claiming Fisker stopped payments and held on to their intellectual property like some jilted lover refusing to return your favorite sweatshirt. It seems it isnât just a one-off: Itâs more like an episode of âJudge Judyâ with over 30 lawsuits alleging lemon law violations, claims for unpaid wages from former employees and suppliers suing for overdue bills. Even though Fiskerâs VP of communications insists Bertrandtâs lawsuit is âwithout merit,â this smorgasbord of legal troubles suggests there may be more cracks in the company than in Humpty Dumpty after his unfortunate wall incident.
- Teslaâs flirtation with lidar: Oh, the delicious irony! Elon Musk once called lidar sensors a âcrutchâ for self-driving cars but Tesla is now Luminarâs top customer. The company splashed out on so much of this supposedly unnecessary tech that it accounted for over 10% of Luminarâs Q1 2024 revenue. Thatâs $2 million worth of crutches! Luminar itself is struggling, though, and just laid off 20% of its staff.
- Rivian on the ropes: Here I was thinking my financial skills were questionable, but despite raking in a whopping $1.2 billion in Q1 revenue, they still managed to lose $1.45 billion! It seems their cost-cutting measures need a little more elbow grease before they can start dreaming of profitability.
- Hyundai breaks open the piggy bank: Meanwhile, Hyundai, in a bid to save us from the terror of our own driving skills, has forked out nearly $1 billion on Motional. This âgenerousâ investment will give Hyundai the majority stake and keep this self-driving startup rolling (pun intended). Itâs like a Cinderella story but instead of a pumpkin turning into a carriage, itâs your cash turning into autonomous vehicles.
Most interesting fundraises this week
Iconiq Capital, the private office thatâs been babysitting Mark Zuckerbergâs and Jack Dorseyâs cash piles since 2011, has just raised a whopping $5 billion across two funds for its seventh flagship fund. This hefty fundraise puts them in the spotlight while other big players like Tiger Global tripped on their shoelaces with a mere $2.2 billion haul (their smallest since 2014, after attracting criticism that it was deploying its cash too fast).
- The cloud is making it rain: Alternative clouds are the new cool kids on the block, folks! CoreWeave just raised a whopping $1.1 billion and is now valued at $19 billion. Why? Because GPUs (those pricey tech powerhouses) are hot stuff for training AI models, but not everyone has deep enough pockets to buy their own.
- Letâs take a look inside: Remember when Vinod Khosla, founder of Khosla Ventures, boldly declared radiologists would be obsolete in five years thanks to AI? Yeah ⌠about that. Turns out, weâre not quite there yet (shocker!). Now, after presumably realizing robots arenât ready to play doctor just yet, Khosla is investing $50 million into Rad AI â a startup aimed at making radiologistsâ lives easier without trying to replace them with machines (yet).
- Appraise the roof: Itai Ben-Zaken is living proof that a startup stumble is just a cha-cha move in the entrepreneurial dance: Heâs back with Honeycomb Insurance, leveraging AI to turn aerial shots of roofs into property inspections for landlords, scoring $36 million for the companyâs Series B.
Other unmissable TechCrunch stories âŚ
Every week, thereâs always a few stories I want to share with you that somehow donât fit into the categories above. Itâd be a shame if you missed âem, so hereâs a random grab bag of goodies for ya:
- All deepfakes, all the time: While weâre used to seeing Katy Perry dressed like an enchanted chia pet, this year she wasnât even there â but you wouldnât know it from the 10 million views her faked mossy-gowned image received on social media.
- Newer saw the sun, shining so bright: So it seems Jack Dorsey has ghosted Bluesky faster than a Tinder date who just discovered you own a tarantula. Mr. âIâm too cool for social media platformsâ casually dropped in a conversation on X that he has left the board of his pet project, Bluesky. He didnât even bother to give any reason or tweet some cryptic haiku about change and evolution â just responded with a plain old no when asked if he was still on the board.
- Appleâs new ad is disgusting: Appleâs latest ad crushed our hearts as it literally crushed a stack of creative tools and analog items into the shape of an iPad. Oh, we get it, Apple! Youâre saying this skinny (who asked for that?) new iPad can replace all these things, but your vision of a future without physical instruments or paper books feels pretty dystopian, and we donât like it.
- A tail with a happy ending: In the latest episode of âWhale, Actually,â scientists have been eavesdropping on sperm whales with a little help from machine learning. Turns out, these mammoth mammals have been chitchatting using their own secret language! With a series of clicks (called âcodas,â if youâre feeling fancy), the whales seem to be forming words and sentences that weâve never understood before. How flippering cool.
- LMGTFY: Stack Overflow has decided to play nice with OpenAI. After initially giving ChatGPT the boot due to a fear of spammy responses, theyâve had a change of heart (or code?). Theyâre now teaming up to improve AI responses on programming-related tasks.