Top tech startup news for Tuesday, January 31, 2023: Anthropic, Finley, GM, PayPal, Workday, and Q-CTRL
Good evening! Below are some of the top tech startup news stories for today, Tuesday, the last day of January 2023.
Workday lays off about 525 employees or about 3% of its workforce
Cloud provider Workday has laid off 3% of its employees or about 525 people. The affected staff are mostly in product and technology areas. Workday’s co-CEOs said told the company’s employees the latest layoff was not due to overhiring and that the company intends to still hire and grow its headcount for the 2024 fiscal year.
Workday, which offers HR and other back-office apps for businesses, reported back in October a headcount of more than 17,500 employees, an increase of over 15% compared with January of that year. That means the layoffs should affect about 525 people.
In a memo to employees, co-CEOs Aneel Bhusri and Carl Eschenbach wrote that the latest job cuts were not the result of overhiring and that the “majority” will occur in Workday’s technology and product units.
“While our confidence in the fundamentals of our business and future growth prospects remains strong, we continue to operate in a global economic environment that is challenging for companies of all sizes,” the co-CEOs said in the message. Workday also said that employees who lost their jobs will receive three months of severance pay and an additional two weeks of pay for each year of employment, CNBC reported.
We covered Workday in 2018 after the California-based company acquired Adaptive Insights for $1.55 billion to accelerate business planning efforts. Workday currently has more than 250 customers, spanning mid-sized organizations to global Fortune 500 businesses.
Quantum computing startup Q-CTRL raises $27.4M in funding to power the future with its quantum sensing technology
Sydney-based quantum sensing startup Q-CTRL has raised $27.4 million in a Series B extension to double down its effort on the development of its quantum technology, concentrating on product engineering, sales, and marketing capacity. The startup will also use part of the new capital infusion to grow its team from 80 to approximately 120 this year across Berlin, Los Angeles, and Sydney Berlin offices.
Salesforce Ventures joined as a new investor in the latest round, with participation from previous investors and Alumni Ventures, ICM Allectus, Mindrock Capital, Bill Lightfoot (a former partner at General Dynamics), and John Eales (an Australian business leader and global rugby legend).
The Series B extension comes nearly 14 months after the startup raised its $25 million Series B in November 2021. The startup said it has made major discoveries and demonstrations of its technology after its last fundraising.
Unlike conventional computers that store information using bits represented by 0s or 1s, quantum computers use quantum bits, or qubits, to encode information as 0s, 1s, or both at the same time. Additionally, scientists say quantum computers could one day make some complex mathematical calculations millions of times faster than the fastest supercomputers today.
“Quantum Computers right now almost never give you the right answer,” said Q-CTRL CEO and Founder Michael Biercuk, adding that with a small quantum computer with about 16 quantum bits, or qubits, the chances of getting the right answer is one in a million. “We bump that up thousands of times to make it very useful.”
Finley raises $17M Series A to help companies manage debt capital as private credit reaches all-time high
Today, private credit is a $1.2 trillion industry and accounts for 90 percent of all corporate debt in the middle market. Over the past five years, banks have largely exited corporate lending. Private credit, or lending by non-bank parties, has stepped in to fill the void. However, the lack of centralization and standardization in private credit makes navigating the space opaque and time-consuming for startups and medium-sized businesses. That’s why Finley has stepped in to help companies streamline debt capital raise and management.
Explaining the challenges faced by small businesses, Finley co-founder and CEO Jeremy Tsui saw the challenges of manual debt capital management firsthand while working at Goldman Sachs, where he witnessed how relationships between borrowers and capital providers could be made more efficient with purpose-built reporting, transaction, and management software.
Finley is a YC- and Bain Capital Ventures-backed fintech and SaaS startup that helps companies streamline debt capital raise and management. Finley’s software also helps these companies understand and make the most of their corporate loans, particularly those issued by private credit lenders.
Today, Finley announced it has secured a $17 million Series A financing to expand its support for different types of debt capital and develop a new software offering for debt capital providers. The round was led by CRV, with participation from returning investors Bain Capital Ventures, Haystack, Y Combinator, and Nine Four Ventures, as well as specialty lender Upper90. In conjunction with the funding, Finley also announced that James Green, a general partner at CRV, will join its board of directors.
“The current market conditions and limited equity and debt funding makes it even more important for companies of all sizes to be more conscientious of where they’re getting their funding, and how they can make the most of the funding they already have,” says James Green, general partner at CRV. “This is where the Finley team is helping with a product that brings innovation to the CFO’s office and enables companies to unlock full access to their debt capital funding.”
Today, General Motors (GM) announced it plans to invest $650 million into the lithium production company, Lithium Americas. It was the largest-ever investment by an automaker to produce battery raw material.
As part of the investment, the automaker will get exclusive access to the first phase of lithium production and the right to first offer on the second phase of lithium products that will come out of the company’s Thacker Pass in Nevada.
According to a statement on Lithium Americas’ website, the investment will come in two tranches. Lithium Americas will receive $320 million first-tranche investment for common shares representing 9.999% of Lithium Americas before separation; and another $330 million second-tranche investment, contemplated to be invested in the Company’s U.S. business following the separation of its U.S. and Argentine businesses (the “Separation”).
“After the first tranche investment, GM will receive exclusive access to Phase 1 production through a binding supply agreement and a Right of First Offer (“ROFO”) on Phase 2 production,” Lithium Americas said.
Announcing the investment, GM Chair and CEO Mary Barra said, “Direct sourcing critical EV raw materials and components from suppliers in North America and free-trade-agreement countries helps make our supply chain more secure, helps us manage cell costs, and creates jobs.”
Securing sources of materials required to produce EV batteries is especially critical as the automaker looks to ramp up production of its EV trucks. In a letter to shareholders on Tuesday, Barra said that 2023 would be “a breakout year” for its Ultium Platform, which is the automaker’s battery platform for EVs.
PayPal announced Tuesday that it will be eliminating 7% of its workforce or 2,000 employees as tech layoffs mount. The payments giant becomes the latest in a list of fintech firms to be hit by the global economic slowdown.
PayPal President and CEO Dan Schulman said in a release posted on its website that the company is working to address the “challenging macroeconomic environment.” He added that the company has made progress in focusing resources on core priorities and rightsizing its cost structure, but that there is more work to be done
“Over the past year, we made significant progress in strengthening and reshaping our company to address the challenging macroeconomic environment while continuing to invest to meet our customers’ needs. While we have made substantial progress in right-sizing our cost structure and focused our resources on our core strategic priorities, we have more work to do. We must continue to change as our world, our customers, and our competitive landscape evolves,” Schulman said in a statement.
Anthropic is close to raising $300 million as investors pour billions into AI startups and ChatGPT rivals
Since the launch of ChatGPT in November of last year, artificial intelligence (AI) startups have seen a has seen resurgence in funding as investors and VC firms pour billion into the AI space hoping to find the next OpenAI. One of the startups is Anthropic, a generative artificial intelligence company that’s working to build reliable, interpretable, and steerable AI systems.
According to a report from the New York Times, Anthropic is said to be close to raising an additional $300 million in funding at around a $5 billion valuation. As demand for ChatGPT surged in the last two months, Anthropic wants to keep its power dry while investors’ appetite for investment in AI is at its peak. Anthropic was previously backed by disgraced FTX founder Sam Bankman-Fried.
In May 2021, the startup raised $124 million in funding from high-profile investors led by Skype co-founder Jaan Tallinn, with participation from former Google CEO Eric Schmidt, James McClave, Dustin Moskovitz, and the Center for Emerging Risk Research, among others.
Based in Silicon Valley, Anthropic was founded by OpenAI’s former VP of research Dario Amodei. Sensing that generative artificial intelligence is going to have a major impact on the world, Dario struck out with his sister Daniela to create “large-scale AI systems that are steerable, interpretable, and robust.”