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⚠️ Hydrogen tax credit rules give startups clarity while boosting nuclear and carbon capture
The U.S. Treasury has finalized rules for hydrogen producers to qualify for tax credits under section 45V of the Inflation Reduction Act, providing much-needed clarity for hydrogen startups. These rules, which took over two years to develop, aim to promote cleaner hydrogen production methods and prevent additional greenhouse gas emissions.
Producers can earn tax credits up to $3 per kilogram based on their emissions throughout the hydrogen lifecycle. The new regulations allow existing nuclear power plants to contribute electricity to hydrogen production, and certain fossil fuel plants with carbon capture technology can also qualify. While the rules are welcomed by the industry, some stakeholders seek more flexibility regarding electricity sourcing and requirements. Overall, the legislation is seen as a significant step towards supporting hydrogen as a cleaner alternative in heavy industry and transportation.
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❕ Uber CEO Dara Khosrowshahi resigns from self-driving truck startup Aurora’s board
Dara Khosrowshahi, CEO of Uber, has resigned from the board of Aurora Innovation, a self-driving truck startup. His decision, effective January 2, 2025, was made to focus on his responsibilities at Uber and to reduce external commitments, with no disagreements reported with Aurora. Khosrowshahi joined Aurora's board after Uber sold its self-driving unit to the company in 2020 as part of a $400 million investment deal.
Shailen Bhatt, COO for AtkinsRéalis, will replace Khosrowshahi on the board. This resignation comes shortly after Aurora's general counsel announced plans to step down. Uber maintains a collaborative relationship with Aurora through its freight platform, although it also partners with other self-driving tech companies.
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⚡️ Apheris rethinks the AI data bottleneck in life science with federated computing
Apheris, a startup focused on addressing data access challenges in life sciences, is leveraging federated computing to enable secure AI model training without transferring sensitive health data. Founded by Robin Röhm, Apheris has secured $8.25 million in Series A funding, bringing its total funding to $20.8 million. The company's approach allows computations to occur locally where the data resides, enhancing privacy and compliance.
Apheris has pivoted from a federated learning framework to focus on serving data owners in the pharmaceutical sector, achieving significant revenue growth. Its software, the Apheris Compute Gateway, is already utilized by the AI Structural Biology Consortium, which includes major pharmaceutical companies. The startup aims to unlock valuable data while addressing data owners' privacy concerns, which is crucial for the broader impact of AI in the field.
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🔺 Internal SpaceX documents show the sweet stock deals offered to investors like a16z, Gigafund
Internal SpaceX documents reveal significant stock deals offered to select investors, including Andreessen Horowitz (a16z), Gigafund, and others, allowing them to purchase shares at a steep discount. For instance, in a May 2022 tender offer, shares were sold to employees at $70 each, a notable drop from the $270 price during primary sales. This disparity arises because employees hold common stock, while investors typically acquire preferred stock with added benefits like dividends and liquidation preferences.
The documents show that preferred shareholders would be owed the first $6.67 billion in the event of a sale, a figure expected to increase with additional funding. Notably, a16z was authorized to buy nearly 4.3 million shares, while Gigafund, associated with SpaceX board members, and other firms also received substantial allocations. Despite the favorable terms for these investors, the documents highlight the complexities and potential risks for common shareholders, especially in a low-sale scenario.
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🫶 Gupshup investor cuts value of its stake again, implying new valuation of $486M
Fidelity has reduced the estimated value of its stake in Gupshup, a business messaging platform, by 7.7% last month, bringing the total decrease to over 65% since its initial investment in mid-2021. The asset management firm now values its holding at $5.62 million, down from $6.09 million the previous month.
Originally, Fidelity invested $16.2 million at a valuation of $1.4 billion. Gupshup's current valuation is now estimated at $486 million. The company, founded in India 17 years ago, raised $340 million in 2021 from various investors, including Tiger Global and Malabar Investments.
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🔻 Bench to be acquired after abruptly shutting down
Bench, a VC-backed accounting startup, abruptly shut down, leaving thousands of customers locked out of their accounts. The company will be acquired by Employer .com, which focuses on HR tech, for an undisclosed amount. Employer .com plans to revive Bench's platform and assist customers in accessing their data. Customers can choose to either port their data or continue their service under the new ownership.
The shutdown caused significant disruption, especially with tax season approaching. Bench had previously claimed over 35,000 clients, but the actual number was around 12,000. Following the acquisition, Employer .com aims to maintain service quality and potentially enhance offerings using its resources. Bench employed over 600 people, some of whom are being called back to ensure a smooth transition.
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🫶 Africa’s newest fintech unicorns are winning by keeping their feet on the ground
Africa's fintech landscape is evolving, with new unicorns like South Africa's TymeBank and Nigeria's Moniepoint recently achieving valuations over $1 billion. These companies have successfully adapted fintech models from mature markets to meet the needs of a largely unbanked population.
Both firms emphasize a hybrid approach, combining digital banking with physical touchpoints to enhance customer engagement. TymeBank offers low-cost banking services through retail partnerships, while Moniepoint uses a network of small business agents to facilitate transactions. This strategy acknowledges the region's reliance on cash and the need for in-person interactions, contrasting with purely digital models seen in developed countries.
As these companies grow, they plan to expand into other markets while continuing to innovate within Africa's informal economy. Their success highlights a broader trend in fintech that could serve as a blueprint for future startups in various industries across the continent.
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🚨 Israeli tech CEO who was severely wounded in Gaza sells startup for about $100 million
Itamar Ben Hemo, a 49-year-old Israeli tech entrepreneur, voluntarily joined the military reserves after the October 7 Hamas attack. During a mission in Gaza, he was shot, suffering severe injuries that required extensive recovery time in the hospital. Despite his challenges, his startup, Rivery, continued to operate, focusing on AI-driven software integration. Recently, Rivery was acquired by Boomi for around $100 million, enhancing Boomi's capabilities in real-time data integration.
Throughout his recovery, Ben Hemo remained actively involved in the company, holding meetings and engaging with investors from his hospital bed. Boomi's CEO, Steve Lucas, praised Ben Hemo’s resilience, emphasizing the importance of quick AI adoption for businesses. The ongoing conflict in Israel has led to significant risks for tech companies, but there are signs of recovery in the industry, with increased startup exits and venture funding.
Tragically, another Rivery employee, Itay Galea, was killed in the conflict, and Ben Hemo ensured his family would benefit from the acquisition. Now fully recovered, Ben Hemo expresses excitement for future opportunities, marking this sale as his second successful exit.
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🔸 Bench shuts down, leaving thousands of businesses without access to accounting and tax docs
Bench, a Canadian accounting startup, has abruptly shut down as of December 27, 2024, leaving over 35,000 businesses without access to their accounting and tax documents. The company's website is offline, except for a notice about the shutdown. Customers are advised to file a six-month IRS extension and can download their data until December 30, with a final deadline to do so by March 2025.
Bench recommends migrating to Kick, a new startup that recently raised $9 million. The sudden closure has shocked customers, many of whom expressed frustration on social media. Former CEO Ian Crosby criticized the board's decision to replace him, suggesting that such changes often lead to failure.
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✅ PharmEasy investor cuts value of its stake drastically, implying new valuation of $456M
PharmEasy is now valued at approximately $456 million, according to a filing by investor Janus Henderson, which significantly marks a 92% decline from its peak valuation of $5.6 billion. This drastic reduction comes despite PharmEasy raising over $200 million earlier this year and preparing for an initial public offering (IPO) in 2025.
The company has faced financial challenges after deferring an $843 million IPO planned for November 2021 and has relied on debt financing, including a problematic $300 million loan from Goldman Sachs. PharmEasy, which operates one of India's largest online pharmacies, has raised more than $1 billion to date but is now valued lower than the $600 million it paid for diagnostic lab chain Thyrocare in 2021.
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🔵 $132K – $149K, here’s what seed-stage founders pay early employees, based on data
This is an examination of the salaries of early employees at seed-stage startups based on data from Kruze Consulting. Founders typically pay themselves modest salaries, with average figures being $132,000 for CEOs, $134,000 for CTOs, $135,000 for COOs, and $149,000 for product leaders. These salaries are relatively low compared to senior engineers, who can earn between $180,000 and $235,000 in the Bay Area.
As startups raise additional funding, founder salaries tend to increase significantly, reaching an average of $183,000 after Series A and $218,000 after Series B. Initial hires can expect varying salaries based on their roles, with mid-level engineers earning between $100,000 and $145,000 and sales personnel earning between $80,000 and $110,000 in the Bay Area.
Equity is also a common compensation component for early employees, with first hires typically receiving between 0.5% and 4% equity. There is a financial landscape for startups as they navigate early-stage hiring and compensation strategies.
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🔔 Shuttered electric air taxi startup Lilium may be saved after all
Lilium, the electric air taxi startup that recently ceased operations and laid off about 1,000 employees, may have a chance for revival. A consortium of investors, Mobile Uplift Corporation, has agreed to acquire Lilium’s operating assets, including its subsidiaries, although the parent company will not receive any funds due to German insolvency law.
The deal is expected to close in January, and Mobile Uplift plans to rehire some laid-off workers. Lilium's CEO expressed optimism about the investment agreement, which aims to restructure the company and allow it to exit insolvency without debt. Despite previously raising over $1 billion and securing orders for electric planes, Lilium struggled financially and filed for insolvency in October after failing to secure emergency funding.
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🚨 Proton’s device aims to help those with kidney disease, and cut heart failure risks
Proton Intelligence, a Canadian startup, has developed a continuous potassium monitoring device aimed at helping individuals with chronic kidney disease and reducing heart failure risks. The company recently secured $6.95 million in seed funding, with clinical trials underway for a product set to launch in 2025.
The device will be implanted just under the skin and connect to a smartphone app, allowing patients to monitor potassium levels and receive alerts if their levels become unsafe. This innovation aims to reduce the need for in-clinic potassium testing and improve patient management, addressing the significant health risks associated with potassium imbalances.
Co-founders Sahan Ranamukhaarachchi and Victor Cadarso based their startup on extensive research highlighting the dangers of inadequate potassium monitoring. Proton competes with other companies in the sector, claiming their solution offers greater usability and clinical impact. The startup plans to enhance patient care by leveraging data to refine therapies and is supported by various investors, including SOSV and We Venture Capital.
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🚨 Palantir and Anduril reportedly building a tech consortium to bid on defense contracts
Palantir and Anduril are reportedly in discussions to form a tech consortium aimed at bidding on Pentagon defense contracts. They are engaging with other tech firms, including SpaceX, OpenAI, Saronic, and Scale AI, to create a competitive alternative to established defense contractors like Lockheed Martin, Raytheon, and Boeing.
The consortium aims to introduce a new generation of defense contractors and enhance the efficiency of providing cutting-edge technology and weapons to the U.S. government. Initial partnerships could be announced as soon as January. This development follows a recent integration announcement between Palantir’s AI Platform and Anduril’s Lattice software, suggesting a strategic collaboration to ensure U.S. leadership in artificial intelligence.
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⚡️ Meet Skyseed, a VC fund and incubator backing the Bluesky and AT Protocol ecosystem
Skyseed is a new venture capital fund and incubator focused on supporting projects within the Bluesky and AT Protocol ecosystem. Launched by Peter Wang, the initiative began with a $1 million commitment and aims to foster experimental projects that leverage decentralized social networking.
Wang, co-founder of Anaconda, has a background in supporting decentralized web initiatives. He sees Bluesky as a potential alternative for users migrating from X (formerly Twitter), emphasizing the importance of open protocols that enable user data ownership and diverse app experiences.
Skyseed will provide both equity investments and developer grants to promising projects, with initial funding checks around $100,000. The fund's growth potential could reach up to $10 million as interest increases. Wang envisions Skyseed as a collaborative space for innovators, highlighting the emergence of a vibrant ecosystem similar to the early internet. Despite challenges, such as moderation issues, Wang remains optimistic about the opportunities within the AT Protocol framework.
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❕FTC orders AI accessibility startup accessiBe to pay $1M for misleading advertising
The U.S. Federal Trade Commission (FTC) has ordered the AI accessibility startup accessiBe to pay $1 million for misleading advertising practices. The FTC found that accessiBe falsely advertised its ability to make websites compatible with screen readers for visually impaired users and concealed its compensation of reviewers without proper disclosure.
The proposed order will require accessiBe to refund customers and prohibits the company from overstating its product's capabilities. Advocacy groups have criticized accessiBe's products as ineffective, claiming they can hinder the functionality of screen readers and fail to comply with the Americans with Disabilities Act (ADA). The order is open for public comment for 30 days before becoming final.
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❕ Inside the wild fall and last-minute revival of Bench, the VC-backed accounting startup that imploded over the holidays
Bench, a Canadian accounting startup backed by $113 million in venture capital, abruptly shut down on December 27, 2024, leaving thousands of small business owners unable to access their accounts during tax season. The shutdown followed multiple rounds of layoffs and issues with their AI and automation strategies, which failed to deliver promised efficiencies.
The sudden closure was caused by a bank calling in their venture debt, leading to immediate layoffs without severance. However, media attention surrounding the shutdown prompted interest from potential buyers. Jesse Tinsley, CEO of Employer .com, quickly negotiated a deal to acquire Bench, saving many jobs and customer accounts.
Despite the acquisition, uncertainties remain about Bench's future, including concerns over service quality and the lack of prior accounting experience at Employer .com. The company plans to rehire former staff and honor existing customer contracts but faces challenges in ensuring a smooth transition.
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🔵 KoBold Metals, which uses AI to help find critical minerals for the energy transition, raises $491M
KoBold Metals, an AI-powered startup focused on discovering critical minerals for the energy transition, has raised $491 million out of a targeted $527 million funding round. The company aims to develop a significant copper deposit it recently discovered in Zambia, with plans for about 60 other exploration projects.
KoBold uses artificial intelligence to analyze large datasets to improve the success rate of mineral prospecting, which historically has been quite low. The funding will support the development of this copper resource, estimated to cost around $2.3 billion. Previous investors include high-profile figures such as Bill Gates and Jeff Bezos.
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🔄 OpenAI failed to deliver the opt-out tool it promised by 2025
OpenAI has not delivered the promised "Media Manager" tool, which was intended to allow creators to control how their works are used in AI training data. Initially announced in May, the tool aimed to identify and manage copyrighted content but has reportedly not been prioritized internally. OpenAI has faced criticism over its current ad hoc opt-out methods, which many creators find inadequate.
The company is also dealing with multiple lawsuits from artists and creators claiming unauthorized use of their works. Despite missing its self-imposed deadline, OpenAI has not provided updates on the Media Manager's status or potential launch date. Experts express skepticism about whether such a tool could effectively address creators' concerns or resolve ongoing legal issues surrounding AI and intellectual property.
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📣 After ups and downs, food delivery startup Epicery closes shop
French food delivery startup Epicery is shutting down after nine years of operations, citing ongoing economic challenges and a negative EBITDA of -€4.69 million in 2023 on sales of €2.57 million. The company, which focused on premium groceries and local deliveries, struggled as inflation altered consumer spending habits.
Epicery had previously thrived during the COVID-19 pandemic and received a majority investment from Geopost in late 2021. However, recent developments in the food delivery market and increased competition led to its decline. Despite having around 25,000 recurring customers and 1,100 local shops, it couldn't achieve the scale needed as part of a larger corporate group.
Co-founder Édouard Morhange expressed pride in connecting local retailers with e-commerce, while Geopost has offered support to Epicery's employees in finding new roles. Although Epicery's model faced challenges, there is optimism among some stakeholders that similar ventures could succeed in the future.
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⚙️ Cleantech Funding Weakened In 2024
In 2024, cleantech funding has experienced a notable decline, reaching its lowest level in four years. While overall investment is down and deal counts have decreased, certain sectors like carbon capture and hydrogen are still seeing growth. Notably, major funding rounds occurred for companies such as Pacific Fusion, which raised $900 million for its fusion technology, and Intersect Power, which secured over $800 million for clean energy projects.
Despite the downturn in equity funding, there has been a shift towards debt financing, with several large debt deals collectively bringing in over $14 billion. This trend indicates a maturing market where infrastructure-heavy companies are opting for project finance.
Looking ahead, investors are cautiously optimistic, particularly regarding growth in energy efficiency and grid optimization, while anticipating potential policy changes under a new U.S. administration. The second half of 2024 showed stronger investor support, particularly for large funding rounds, suggesting a hopeful outlook for the future of cleantech investments.
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🍎 Apple pulls remaining Lightning-based devices from European stores
Apple has removed its last Lightning-based devices, including the iPhone SE and iPhone 14 series, from its online stores in Europe to comply with the EU's new common charging solution, which mandates USB-C ports. This directive, effective December 28, 2024, aims to reduce electronic waste and address market fragmentation.
The Lightning-based Magic Keyboard was also pulled from sale. While these devices are no longer available in the EU, they remain for sale in other regions. A new iPhone SE with USB-C and upgraded features is expected to be released in 2025. The directive also includes requirements for fast charging and improved labeling for consumer clarity.
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🚨 Terraform Labs co-founder Do Kwon will face fraud charges in the US
Do Kwon, co-founder of the collapsed cryptocurrency firm Terraform Labs, will be extradited from Montenegro to the U.S. to face federal fraud charges. Kwon is also facing charges in South Korea related to the crash of Terraform's cryptocurrencies, TerraUSD and Luna, which resulted in over $40 billion in investor losses.
Following a civil trial, Kwon and Terraform Labs were found liable for fraud by the U.S. Securities and Exchange Commission and agreed to pay $4.5 billion to settle the case. Kwon was arrested in March 2023 at a Montenegrin airport while attempting to fly to Dubai. The timeline for his extradition to the U.S. remains unclear.
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🔻 What We Learned About AI From 7 Active Startup Investors This Year
In 2024, venture funding for AI companies surged to $99.6 billion, an 80% increase from the previous year. Approximately one-third of this funding targeted foundation model companies, while the remaining two-thirds went to sectors influenced by AI, including healthcare, robotics, and autonomous driving.
Interviews with seven active AI investors revealed that AI is now a primary focus for many firms, with significant investments in applied AI. Investors are shifting their attention from infrastructure to applications that can significantly impact specific sectors. Concerns about AI accuracy and reliability were highlighted, with predictions for a blend of automated and human oversight in service roles.
Additionally, new funds dedicated to AI, like Menlo Ventures' $100 million Anthology fund, have emerged to support early-stage AI startups. Investors believe that generative AI can enhance productivity and transform service revenue into product revenue. Despite the current excitement, some investors anticipate a correction in the market as the AI revolution continues to evolve over the next decade.
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💰 Here’s the full list of 49 US AI startups that have raised $100M or more in 2024
This is a list of 49 U.S.-based AI startups that have raised $100 million or more in 2024, highlighting a vibrant funding landscape despite concerns about AI fatigue. In the third quarter alone, AI companies raised $19 billion, amounting to 28% of all venture funding.
Key highlights include:
- Elon Musk's xAI raised $6 billion in November, valuing the company at $50 billion.
- Liquid AI secured $250 million, reaching a valuation of $2.35 billion.
- Tenstorrent raised $693 million, achieving a valuation of $2.7 billion.
- Other notable rounds include $400 million for Physical Intelligence, $175 million for Sierra, and $1 billion for Safe Superintelligence.
There is an ongoing investor interest in AI, with significant rounds occurring throughout the year across a variety of applications, from enterprise solutions to healthcare technologies.
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🌐 Revenue-based financing startups continue to raise capital in MENA, where the model just works
There is a rising popularity of revenue-based financing (RBF) in the MENA region as startups seek non-dilutive funding alternatives amidst tougher venture capital conditions. CredibleX, a notable player, recently raised $55 million to provide working capital to small and medium-sized enterprises (SMEs) in the region.
RBF has gained traction because many SMEs struggle to access traditional banking capital. CredibleX partners with large aggregators, allowing SMEs to apply for loans through platforms like Talabat, streamlining the process by using historical sales data for quick credit decisions.
The model is particularly effective in high-income countries like the UAE, where SMEs benefit from direct repayment structures, making recovery easier for lenders. CredibleX aims to tap into a larger pool of SMEs and is regulated by the Abu Dhabi Global Markets, reflecting a growing trend of innovative financing solutions in the region.
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🔹 AI startups attracted 25% of Europe’s VC funding
In 2024, AI startups in Europe attracted 25% of the region's venture capital funding, totaling approximately $13.7 billion, according to Balderton Capital and Dealroom. This marks an increase from 15% four years ago, with several new unicorns emerging, such as Poolside and Wayve.
Despite a generally flat year for European venture funding, the value of AI companies in the region has doubled to $508 billion, now representing nearly 15% of the total tech sector. Notably, around 349,000 people are employed in AI roles in Europe, a 168% increase since 2020.
Balderton's James Wise emphasized that early-stage AI companies can raise significant funds in Europe, similar to the U.S., contributing to a thriving ecosystem. He also noted that generative AI tools have significantly improved productivity for many companies, indicating a positive trend for the future of AI in Europe.
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🔺 Apple might be working on a smart doorbell
Apple is reportedly developing a smart doorbell that may incorporate its FaceID technology to recognize individuals approaching the door. This doorbell would wirelessly connect to a deadbolt lock, potentially allowing it to unlock automatically for residents. The project is still in the early stages, with a market release not expected before late 2025.
The doorbell might be compatible with third-party locks that work with Apple’s HomeKit, or Apple could partner with a specific lock manufacturer. While this product would enable Apple to compete with existing smart doorbells like Amazon's Ring, it could also expose the company to risks, particularly if the system were implicated in home security failures.
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🚨 OpenAI’s GPT-5 reportedly falling short of expectations
OpenAI's development of GPT-5 is reportedly behind schedule and not meeting expectations, according to a recent Wall Street Journal report. The model, code-named Orion, has undergone at least two large training runs, but progress has been slower and more costly than anticipated. While GPT-5 shows some improvements over its predecessors, these enhancements do not yet justify the significant operational costs.
To enhance the model, OpenAI is not only using publicly available data but has also hired personnel to generate new data and is utilizing synthetic data from its earlier models. The company has stated it will not release the Orion model this year, reflecting a shift in its approach to developing AI technologies.
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🔹 After causing outrage on the first day of Y Combinator, AI code editor PearAI lands $1M seed
PearAI, an AI code editor startup, faced significant backlash on its first day at Y Combinator after accusations of copying another open-source project. Following this controversy, the founders, Nang Ang and Duke Pan, quickly adapted their concept and secured $1.25 million in seed funding, including $375,000 from Y Combinator.
Initially criticized for poor licensing practices and an aggressive marketing approach, the team responded by switching to a standard open-source license and improving documentation. They are now pivoting from a standalone code editor to developing a framework that integrates various AI coding tools, allowing for a more cohesive user experience. Despite some skepticism, PearAI has received praise for its revised direction.
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