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Let’s talk about succession plans 



Welcome to Startups Weekly, a nuanced take on this week’s startup news and trends by Senior Reporter and Equity co-host Natasha Mascarenhas. To get this in your inbox, subscribe here.

Maybe it’s the fact that “Succession” is back next week, or maybe it’s the fact that Silicon Valley just experienced its first banking crisis, but I want to talk about the line of descent in startups.

As I write in my latest:

Silicon Valley Bank is a good reminder that startups, often entrenched in the world of risk and scrappiness, sometimes forget to think about the obvious: single points of failure. But just like it makes sense to rely on a community-friendly bank, so does entrusting a single person to lead your business to success. Now that we’ve seen the former not really work out, perhaps it’s time to rethink the latter.

For my full take on the new worry that founders should be thinking through, read: “Banking isn’t the only ‘single point of failure’ entrepreneurs should be rethinking.” 

For more, read about the crypto corner, my latest snapshot of founder sentiment, the impact on Black founders and this timeline on all that has unfolded thus far. This is where the SVB coverage ends for the purposes of this newsletter writer maintaining her sanity and remembering that there is a world outside of the banking trenches.

In the rest of this newsletter, we’ll get into news that was buried this week and GPT-4. As always, you can follow me on Twitter or Instagram to continue the conversation. You can also send me tips at or on Signal at +1 925 271 0912. No pitches, please.

GPT-4 didn’t write this

On Equity this week, Alex and I spoke about the above, but more interestingly, the future of AI. We talk about the technology’s impact of smart people writing books, context and general tech exuberance. We need it, and I’m not just saying that because I live a stone’s throw away from Cerebral Valley.

Here’s why it’s top of mind: GPT-4 launched this week from the team behind OpenAI. Our own Kyle Wiggers reports, “GPT-4 can generate text and accept image and text inputs — an improvement over GPT-3.5, its predecessor, which only accepted text — and performs at ‘human level’ on various professional and academic benchmarks. For example, GPT-4 passes a simulated bar exam with a score around the top 10% of test takers; in contrast, GPT-3.5’s score was around the bottom 10%.” Companies such as Stripe, Duolingo and Khan Academy were among its beta testers.

Image Credits: Microsoft

News that was buried

When there’s an obvious zeitgeist, news often gets buried — both intentionally and unintentionally. As a result, over the past week, there was lots of news that deserved more attention — both good and bad. The list includes Launch House winding down existing operations and laying off staff, as well as Klaviyo and Course Hero conducting companywide layoffs for the first time.

Here’s what else I missed sharing my two cents on: 

Magnifying Glass Focusing Sunlight Into a Point Repetition on Turquoise Colored Background High Angle View; technical due diligence

Image Credits: MirageC (opens in a new window) / Getty Images

Etc., etc.

  • Throwback Saturday: If you missed Startups Weekly last week, catch my last issue here: “The oh-so-biased branding risk in venture capital.”
  • Let’s hang on campus? TechCrunch is coming to Boston on April 20. I’ll be there with my favorite colleagues to interview top experts at a one-day founder summit. Book your pass ASAP! Speakers include Techstars’ Kerty Levy, Construct Capital’s Dayna Grayson and NFX’s James Currier. 
  • Big shout out to all the sources that spoke to me, on and off the record, this past week to help me understand Silicon Valley’s first, real banking crisis. There’s more we need to learn and many questions ahead, so keep the trust and tips coming.
  • Programming note: If you’re reading this on a browser, get this in your inbox too! Subscribe here and share it with your friends.

Seen on TechCrunch

Google warns users to take action to protect against remotely exploitable flaws in popular Android phones

At Virgin Orbit, it never should’ve come to a staff furlough

Pornhub owner MindGeek sold to private equity firm

Anonymous app Sidechat picks up rival Yik Yak…and users aren’t happy

Seen on TechCrunch+

Dear Sophie: How can I return to the United States as a founder?

How to pitch me: 7 investors discuss what they’re looking for in March 2023

Zero-based budgeting: A proven framework for extending runway

Product-led growth is propelling a wave of sales tools startups

Silicon Valley has been through an exhausting stretch, and that’s saying a lot given that COVID-19 is still an on-going pandemic and the downturn continues to provide hurdles. If you’ve made it to the end, thank you, but also, take a nap. We’ll be here on Monday. You deserve some rest. I’ll probably have some sweeter words on how tech banded together during a time of immense stress, but for now, sleep.

Chat soon — and let me know if you want to live tweet “Succession” with me next week?


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Isar Aerospace raises $165 million to bring more sovereign launch to Europe



German launch startup Isar Aerospace has scored $165 million (€155 million) in new funding as it races toward the inaugural flight of its Spectrum small rocket later this year.

The company, founded in 2018, is one of a handful of European startups looking to fill the gap in the launch market on that continent. There are just two European rockets flying today: the heavy-lift Ariane 5, built by ArianeGroup, and Italian aerospace company Avio’s Vega launch vehicle.

But Isar CEO Daniel Metzler told TechCrunch that European governments are waking up to the geopolitical and economic upsides to sovereign launch capabilities.

“If you take a look at the European Union, even Germany itself, there’s a strong focus on the automotive industry. [The space industry] is a huge opportunity at the same time to build up another economical pillar that can be extremely profitable,” he said.

Isar’s funding history reflects this increasing overlap between public and private interest. This most recent Series C round was led by investors including 7-Industries Holding, Bayern Kapital, Earlybird Venture Capital, HV Capital, Lakestar, Lombard Odier Investment Managers, Porsche SE, UVC Partners, and Vsquared Ventures. Part of these funds are backed by the EU and programs managed by the European Investment Fund; last year, Isar also won a $11.3 million (€10 million) prize from the European Commission.

Isar is taking a long-term approach, Metzler said. This thinking is built into the company’s decision to be fully vertically integrated, its automated, mass-manufacturing technique, and the design of the launch vehicles. The company is betting that some investments – in the vertical integration, for example – will eventually have a huge pay off, even if that pay off is not realized for the first five or even ten vehicles.

“I believe that you can be much cheaper if you’re actually fully vertically integrated, if you know how to do it,” Metzler said. “I think one of the big drivers already for us early on was scalability. We wanted to not just build one or two vehicles a year but tens of vehicles per year. In that case, especially with more and more units per year, it really starts paying off if you actually do it yourself.”

Isar Aerospace co-founders Daniel Metzler and Josef Fleischmann. Source: Isar Aerospace

Full vertical integration has had other benefits too, like being able to simplify the vehicle’s design and generating more of a buffer against ongoing supply chain issues facing other space companies, he added.

The company will be flying five customer payloads on its first mission, which is scheduled for the second half of this year from Andøya, Norway. Isar signed an agreement with the space port, Andøya Space, for exclusive use of one of its launch pads for up to twenty years.

Isar has also inked firm contracts with a number of customers for future launchers. Those customers span smaller startups, like OroraTech, a German space-based wildfire detection developer, and French electric propulsion startup Exotrail, as well as big corporates like Airbus Defence and Space. Isar’s first American customer is rideshare broker Spaceflight Inc., for a dedicated mission in 2026.

The company has more work to do before the first launch – the next big milestone is integrated stage testing – but Metzler said he’s feeling positive about the progress. The company recent revealed on Twitter that it had run 124 hot fire tests of its Aquila rocket engine over a one year period, an encouraging sign that the rocket is coming together.

Isar is not the only European startup looking to take a slice of the burgeoning European launch market. The company is competing against fellow upstarts Rocket Factory Augsburg in Germany, as well as Orbex and Skyrora in the United Kingdom, and a handful of others.

Metzler’s hunch is that the competition will be steep.

Looking even five or ten years down the line, there may only be around eight major launch players spread across the world, he said. “Probably you’re going to have three to four players in the U.S., maybe two players or so within Europe, maybe another two within Asia. That would be my guess.”

“It’s not that many,” he added. “But look, if you divide the entire market globally for launch services by seven, eight companies, it’s a very lucrative business for those seven, eight companies.”

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Cabify, the Madrid-based Uber rival, says it’s raised $110M in new funding



It’s 2023, and we’re years past the peak of monster fundraising for on-demand transportation and delivery startups locked in highly competitive races with each other to dominate urban consumer mobility. But with many of the biggest and most tenacious players still in the market, those rounds have not disappeared altogether. Today, Cabify — the Madrid-based platform that competes against Uber in Spain and Latin America — is announcing that it has picked up $110 million in funding — money that it plans to use in part to expand in its existing footprint, to expand its technology stack, and to bring more electric vehicles into its fleet.

The company currently has over 42 million registered users and 1.2 million drivers across markets that include cities in Spain such as Madrid and Barcelona as well and cities in Argentina, Chile, Colombia, Spain, Mexico, Peru, and Uruguay, and it says its plan is to triple revenues in the next three years while expanding to 25 cities overall.

The funding is a mix of equity and debt, the company tells me. The equity comes from Orilla Asset Management (the family office for Francisco Riberas, who is one of the major shareholders of Gestamp, a Spanish automotive manufacturing giant), financial services giant AXIS (via its Fond-ICO Next Tech), and others that are not being named.

The company did not disclose the exact amount of new funding as the $110 million also includes a €40 million loan from the European Investment Bank actually announced in December 2022, as well as a funding round of an unconfirmed amount of funding that Cabify secured in July 2022.

Cabify also did not respond to a question about its valuation. PitchBook notes that the investment in July 2022 valued the company at $1.49 billion. The company has a pretty large cap table underneath that figure: PitchBook lists no less than 33 current investors (plus another 13 that have cashed out). The list of active backers include the likes of Rakuten (the Japanese “Amazon” that has used Spain as the home base for its European efforts), Endeavor Capital and the Winkelvoss twins.

Cabify’s fundraising underscores the fact that while regulators may not be holding as many of these transportation companies to account as they were previously, and consumers may not buzz about them as much as they did pre-Covid, they are continuing to grow, and specifically here are raising money in a tight capital market to continue investing in their growth. Cabify is not disclosing revenue numbers, nor whether it is actually profitable in any single market or overall, but it said that it is growing.

It notes that “turnover in 2022 is already 24% higher than in 2019, and 32% higher than in 2021”. Those absolute figures, however, may not be very big: the last financials for the company published in PitchBook happen to be for 2019, when it posted revenues of $2.94 million. That would mean 2022 revenues are $3.65 million.

“This commitment from strategic investors is a recognition of Cabify’s positive impact and potential to continue creating long-term value for our investors and the cities in which we operate,” said Juan de Antonio, CEO of Cabify, in a statement. “These are partners who share our vision for the sustainable mobility industry and will enable us to accelerate the delivery of our strategic plan.”

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Disney reportedly eliminates metaverse division in first round of layoffs



Disney’s next generation storytelling and consumer experiences division, which had been exploring how the company could enter the so-called metaverse, has been eliminated according to The Wall Street Journal. The team is thought to have been made up of around 50 employees, and was exploring how Disney could use its existing intellectual property in what former CEO Bob Chapek called “the next great storytelling frontier.”

The division was announced internally last February

Disney announced its metaverse ambitions to its employees last February — four months after Facebook renamed itself to Meta — when then-CEO Bob Chapek appointed Mike White to lead the next generation storytelling unit. White, who is not thought to have been impacted by the layoffs, has worked at Disney for over a decade. His LinkedIn profile notes that he originally started in the company’s Disney Interactive video games division. 

“For nearly 100 years, our company has defined and re-defined entertainment by leveraging technology to bring stories to life in deeper, more impactful ways,” Chapek said in the memo last year. “Today, we have an opportunity to connect those universes and create an entirely new paradigm for how audiences experience and engage with our stories… This is the so-called metaverse.” It’s unclear exactly what experiences the team was working on, but WSJ notes that they could have involved “fantasy sports, theme-park attractions and other consumer experiences.”

Disney did not immediately respond to The Verge’s request for comment.

Although the cuts have taken place under Iger, he appears to be far from a metaverse-skeptic, with WSJ noting that he sits on the board of a startup, Genies Inc, that’s focused on helping users create avatars.

Disney isn’t the only company struggling to deliver on big metaverse ambitions. Even Meta has struggled to build adoption of its technology. Its first major VR headset release after the rebrand, the Meta Quest Pro, was terrible, and its Reality Labs division reported an operating loss of $13.72 billion last year. 

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