Startups Weekly: Trouble in EV land and Peloton is circling the drain

Friday, May 10, 2024

Welcome to Startups Weekly — Haje's weekly recap of everything you can't miss from the world of startups.

Look, I know this is our startups weekly newsletter, and as the most valuable company in the world, Apple is kind of the ultimate "not a startup," but judging by the traffic on the site, y'all 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 "admitted" that iPads are more like little laptops than big iPhones, so the company moved the camera to the landscape edge — where it shoulda been all along, honestly.

Ooh! And I have some fun personal news: I'm 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

Image Credits: Bryce Durbin / TechCrunch

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 she'd hit the jackpot with her AI humanitarian aid startup TechAid when she joined Newchip's program. Spoiler alert: She didn't. 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! Read More

Rabbit R1 isn't 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 lil' carrot muncher makes you question if it could've just been another app on your phone. But for now, that's kinda the point, Devin argues. Read More

I got 99 problems, but the tech ain't one: Rappers Kendrick Lamar and Drake have taken their feud to new heights — or should we say, depths? It's all fun and games until Tupac gets deepfaked into your track. Read More

On yer bike: In today's episode of "How to Tank a $50 Billion Company," Peloton, the once glittering star of home fitness, continues its trudge on the sad treadmill of misfortune. They're axing 15% of their workforce (that's about 400 people for those allergic to percentages), proving that math is indeed a cruel mistress. Read More

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Trouble in the transportation trenches

Image Credits: Kirsten Korosec

Henrik Fisker's EV startup, Fisker Inc., is having a bit of a midlife crisis. After launching two prototypes last August — the Pear and Alaska — 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 isn't just a one-off: It's more like an episode of "Judge Judy" with over 30 lawsuits alleging lemon law violations, claims for unpaid wages from former employees and suppliers suing for overdue bills. Even though Fisker's VP of communications insists Bertrandt's lawsuit is "without merit," this smorgasbord of legal troubles suggests there may be more cracks in the company than in Humpty Dumpty after his unfortunate wall incident.

Tesla's flirtation with lidar: Oh, the delicious irony! Elon Musk once called lidar sensors a "crutch" for self-driving cars but Tesla is now Luminar's top customer. The company splashed out on so much of this supposedly unnecessary tech that it accounted for over 10% of Luminar's Q1 2024 revenue. That's $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 "generous" investment will give Hyundai the majority stake and keep this self-driving startup rolling (pun intended). It's like a Cinderella story but instead of a pumpkin turning into a carriage, it's your cash turning into autonomous vehicles.

Most interesting fundraises this week

Iconiq Capital, the private office that's been babysitting Mark Zuckerberg's and Jack Dorsey's 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.

Let's 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, we're not quite there yet (shocker!). Now, after presumably realizing robots aren't ready to play doctor just yet, Khosla is investing $50 million into Rad AI — a startup aimed at making radiologists' 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: He's back with Honeycomb Insurance, leveraging AI to turn aerial shots of roofs into property inspections for landlords, scoring $36 million for the company's Series B.

Other unmissable TechCrunch stories …

Every week, there's always a few stories I want to share with you that somehow don't fit into the categories above. It'd be a shame if you missed 'em, so here's a random grab bag of goodies for ya:

All deepfakes, all the time: While we're used to seeing Katy Perry dressed like an enchanted chia pet, this year she wasn't even there — but you wouldn't know it from the 10 million views her faked mossy-gowned image received on social media. Read More

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. "I'm too cool for social media platforms" casually dropped in a conversation on X that he has left the board of his pet project, Bluesky. He didn't even bother to give any reason or tweet some cryptic haiku about change and evolution — just responded with a plain old no when asked if he was still on the board. Read More

Apple's new ad is disgusting: Apple's 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! You're 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 don't like it. Read More

A tail with a happy ending: In the latest episode of "Whale, Actually," 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 "codas," if you're feeling fancy), the whales seem to be forming words and sentences that we've never understood before. How flippering cool. Read More

LMGTFY: Stack Overflow has decided to play nice with OpenAI. After initially giving ChatGPT the boot due to a fear of spammy responses, they've had a change of heart (or code?). They're now teaming up to improve AI responses on programming-related tasks. Read More