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OpenAI unleashes GPT-4, SVB files for bankruptcy, and a PE firm acquires Pornhub



Welcome to Week in Review, folks, TechCrunch’s regular recap of the week in tech. GPT-4, OpenAI’s text- and image-understanding AI, might’ve dominated the headlines over the past few days. But fresh drama around Silicon Valley Bank’s collapse emerged as well.

We cover all that and more in this edition, so grab a coffee and settle in.

Quick note, TechCrunch Early Stage 2023 is fast approaching. It’ll be in Boston on April 20 and will feature three concurrent tracks of founder-forward workshops, case studies and deep dives with experts in tech entrepreneurship. Further down the line, mark your calendar for TechCrunch Disrupt 2023, which will take place in San Francisco on September 19– 21. As always, it’ll be jampacked with roundtables, firesides, Q&As and showcases from luminaries in their fields. You won’t want to miss it.

Now, on to the news.

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OpenAI debuts GPT-4: After much anticipation, OpenAI, the AI startup with major backing from Microsoft, has released a powerful new AI model called GPT-4. GPT-4 can generate text and accept image and text inputs — an improvement over its predecessor, which only accepted text — and performs at “human level” on various benchmarks. But GPT-4 isn’t perfect. Like most other generative text AI, the model “hallucinates” facts and makes reasoning errors — sometimes with great confidence.

Microsoft goes all-in on AI: Leveraging the latest tech from OpenAI, including GPT-4, Microsoft launched new AI-powered features across its suite of productivity tools under the brand Copilot. Copilot handles different tasks depending on the app in which it’s used. For example, in Word, Copilot writes, edits, summarizes and generates text; in PowerPoint and Excel, Copilot turns natural language commands into designed presentations and data visualizations; and in Power Apps, Copilot helps refine ideas for low-code software.

SVB files for bankruptcy: One week after trading was halted for SVB Financial and after regulators took control of the holding company for Silicon Valley Bank and other subsidiaries, SVB Financial has taken the next inevitable step. On Friday, the bank announced that it has formally filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York. This will mean that SVB Financial can apply — and plans to apply — to the courts to resume activities while finding buyers for its assets, which include going ahead with its plan to sell off SVB Securities and SVB Capital.

Google Glass bids farewell: Google Glass, Google’s misunderstood bit of AR tech, is no more. Google announced this week that it would stop selling the last incarnation of Glass, Glass Enterprise Edition, on March 15 (but continue to support existing customers until September 15). Readers will recall that Glass, which celebrated its tenth anniversary last month, never quite managed to gain traction, becoming the subject of ridicule and parodies even after a pivot in focus from consumer to enterprise.

YouTube TV gets pricey: In a move sure to irk cord cutters, YouTube has announced that it’s raising the price of its YouTube TV subscription to $72.99 per month — an $8 increase from the current $64.99 monthly fee. The Google-owned company blames a rise in “content costs” for the change. (Perhaps not coincidentally, YouTube TV recently announced a streaming deal with NFL Sunday Ticket, which is reportedly worth $2 billion per season.)

Via acquires Citymapper: Transportation startup Via, which recently raised $110 million at a $3.5 billion valuation, has snatched up Citymapper, the London startup that produces the popular urban mapping app of the same name. Originally making a name for itself as an alternative to apps like Google Maps for consumers planning journeys in metropolitan areas using public transportation, Citymapper arguably never really managed to capitalize on its momentum and early promise.

Baidu’s ChatGPT rival flails: In other AI news this week, Ernie Bot, Chinese search giant Baidu’s answer to ChatGPT, underwhelmed. TechCrunch wasn’t able to try it, but industry observers inside and outside China pointed to the fact that rather than showcasing Ernie through a live demo, Baidu opted for a lengthy presentation with pre-recordings of Ernie’s answers. The company’s shares slumped as much as 10% in Hong Kong following Li’s presentation.

Pornhub meets private equity: MindGeek — owner of several adult entertainment sites, including Pornhub, Brazzers and Redtube — was acquired by a Canadian private equity firm, Ethical Capital Partners (ECP). The acquisition follows a rocky few years for the porn giant. MindGeek’s CEO Feras Antoon and COO David Tassillo both departed from the company in June 2022. MindGeek also is currently in the midst of multiple lawsuits that allege it has knowingly profited off of child sexual abuse material.

Dish customers in the dark: Dish customers are still looking for answers two weeks after the U.S. satellite television giant was hit by a ransomware attack. In a public filing published on February 28, Dish confirmed that ransomware was to blame for an ongoing outage and warned that hackers exfiltrated data, which “may” include customers’ personal information, from its systems. But Dish hasn’t provided a substantive update since, despite customers continuing to experience issues — and not knowing if their personal data is at risk.


TechCrunch’s stable of quality podcasts grows by the hour. (Rejoice, those with long commutes.) This week on Equity, Alex and Natasha discussed the M&A spree that captured Qualtrics, Cvent, and Mint Mobile, as well as what’s followed the SVB collapse, GPT-4 and why Y Combinator is scaling back from late stage. Over at Found, meanwhile, Amanda and Darrell spoke with Teddy Solomon, the co-founder of Fizz, a social media app aimed at college students focusing on building community on campus. The interview touched on what Gen Z is looking for in their social media, how to thoroughly moderate a platform like Fizz and how this kind of community building could go far beyond colleges.


TC+ subscribers get access to in-depth commentary, analysis and surveys — which you know if you’re already a subscriber. If you’re not, consider signing up. Here are a few highlights from this week:

Rethinking points of failure: Natasha M writes about how, in light of the SVB collapse, perhaps founders should rethink entrusting a single person to lead their business to success. She polled a number of early-stage founders who are building companies that have raised a Series A or less to understand how they think about succession. The consensus is that it’s not top of mind, or even top of the list, in a world where founders are more focused on runway, product-market fit and growth.

Strange things afoot at Unearthly Materials: Tim reports on Unearthly Materials, a startup that claimed to have big-name investors behind its tech that could lead to a superconductor breakthrough. But as it turns out, those investors weren’t all on board, especially given Unearthly Materials’ questionable record.

Good news for software companies: Depressed from this week in news? Alex writes that it isn’t all doom and gloom. Some software companies are performing quite well during the wider tech industry crash — at least, if their earnings reports are anything to go by.

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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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