Top tech startup news for Wednesday, February 8, 2023: Affirm, CarIQ, Disney, Entropik, Google, and Fierce
Good evening! Below are some of the top tech startup news stories for today, Wednesday, February 8, 2023.
Disney to lay off 7,000 workers and slash $5.5 billion in costs as it unveils vast restructuring
Layoff announcements continue to dominate the headlines today. Earlier today, Buy Now, Pay Later giant Affirm and GoDaddy announced they were laying off 19% and 8% of their workforce respectively.
Now, media and entertainment giant Disney also announced today that it will cut 7,000 jobs from its workforce and plans to cut $5.5 billion in costs, including $3 billion in content savings, CEO Bob Iger said in a statement during the earnings call.
He also said that the company is planning to reorganize into three divisions: Entertainment which includes most of its streaming and media operations; ESPN which includes the TV network and the ESPN+ streaming service, and parks; and Parks, Experiences and Products unit.
“This reorganization will result in a more cost-effective, coordinated approach to our operations,” Iger told analysts on a conference call. “We are committed to running efficiently, especially in a challenging environment.”
In a quarterly earnings call today, Iger told investors that the company isn’t considering a spinoff of ESPN. He also added the company “will take a very hard look at the cost of everything we make across television and film.”
The $5.5 billion in costs will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts. The company added that about $1 billion in cost-cutting was already underway since the last quarter of 2020.
Climate startup The Degrees Initiative raises around $1M from Facebook co-founder Moskovitz, others to fund research into cooling the Earth with sunlight reflection
One of the leading proponents of SRM is The DEGREES Initiative, a nonprofit research organization dedicated to putting the Global South at the center of the SRM conversation. DEGREES stands for DEveloping country Governance REsearch and Evaluation for SRM.
The DEGREES Initiative today announced the expansion of its research into the impacts of solar radiation modification (SRM) in the Global South. The new projects—which cut across Africa, Asia, and South America—will more than double the number of research teams exploring how SRM could affect the Global South.
The new teams are based in Benin, Brazil, Cameroon, Chile, Ghana, India, Indonesia, Malaysia, Mali, Nigeria, Pakistan, South Africa (x2), Thailand, and Uganda. Over the next two years, they will explore how SRM could affect climate impacts in their regions.
Along with the research expansion, The DEGREES Initiative also received a new infusion of $900,000 to support its scientist in studying the effects of reflecting sunlight to cool the Earth and mitigate the impacts of global warming. The money comes from Open Philanthropy, a venture funded primarily by billionaire Dustin Moskovitz, a co-founder of Facebook.
“The climate-vulnerable countries of the Global South must be central to any efforts to understand solar radiation modification (SRM),” says Andy Parker, founder and CEO of the Degrees Initiative. “The more global south experts understand SRM and its implications, the better placed they will be to shape SRM governance arrangements, to stand up for their interests, and to resist any bad-faith attempts to persuade them to support or oppose SRM”.
On Tuesday, The Degrees Initiative and the United Nation’s World Academy of Sciences also announced they are distributing more than $900,000 to scientists across Africa, Asia, and South America to study solar radiation modification in a program called “The Degrees Modelling Fund.”
However, according to NASA, “Sunlight reflection is not a solution to climate change or global warming. It is a relatively fast and inexpensive way to temporarily cool the Earth. We know it works: In the 15 months following the eruption of Mount Pinatubo in the Philippines in 1991, the average global temperature was about 1 degree Fahrenheit lower.”
Google’s effort to challenge Microsoft ChatGPT-powered Bing search engine got off to a rocky start Wednesday after the tech giant offered inaccurate information in its ad. The highly-anticipated Google AI chatbot Bard delivered an inaccurate answer in its advertisement.
In a short GiF video of Bard in action that the company posted on Twitter, Google describes the chatbot as a “launchpad for curiosity” that would help simplify complex topics.
“Bard is an experimental conversational AI service, powered by LaMDA. Built using our large language models and drawing on information from the web, it’s a launchpad for curiosity and can help simplify complex topics,” Google tweeted.
The inaccurate information in the advertisement comes when Bard was given the prompt:
“What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?”
Bard later responded with a number of answers, including one that suggests the JWST was used to take the very first pictures of a planet outside the Earth’s solar system or exoplanets. This is inaccurate.
According to NASA, the first pictures of exoplanets were taken by the European Southern Observatory’s Very Large Telescope (VLT) in 2004, which the agency also confirmed. Reuters first spotted the error and Google has not responded to a request for comment.
Google launched Bard on Monday as part of its response to the widely successful OpenAI’s AI-powered ChatGPT chatbot.
Affirm lays off 19% of its workforce as higher interest rate ‘dampens consumer spending’ and slows down the Buy Now, Pay Later market
Affirm is laying off 19% of its workforce, effective immediately. The Buy Now, Pay Later (BNPL) giant is the latest fintech company caught in the multi-month-long series of tech layoffs that has claimed 97,996 tech employees so far this year.
In his letter to shareholders Wednesday, Affirm Founder and CEO Max Levchin called the decision “the single most difficult one” of all the cuts the company chose to make, and said the layoffs would be effective today.
In a separate memo to employees earlier today, which he later shared publicly, Levchin said that the company “consciously hired ahead of the revenue required to support the size of the team,” with revenue growth justifying the strategy during the early part of the pandemic.
“Everything changed in mid-2022,” Levchin said, pointing to Federal Reserve policy that he said has “dampened consumer spending and increased Affirm’s cost of borrowing dramatically.”
“The root cause of where we are today is that I acted too slowly as these macroeconomic changes unfolded,” Levchin wrote. Levchin also told the shareholders that the company expects to keep the headcount “essentially flat for the foreseeable future.”
“In FQ2′23, we redirected the substantial majority of our R&D efforts towards margin-improving projects, repeat consumer engagement, and Debit+ and plan to continue executing this focused roadmap for several quarters,” Levchin said.
Affirm was founded in 2012 by Jeffrey Kaditz, Max Levchin, and Nathan Gettings. The San Francisco fintech company offers installment loans to consumers at the point of sale. It later went public in January of this year. Its stocks pop 98% on its IPO debut.
Emotion AI startup Entropik raises $25M in funding for its AI-powered integrated market research platform
Market research is critical to the success of any new service or product launch. Market research enables companies of all sizes to discover the target market and get opinions and other feedback directly from potential consumers about their interest in the product or service. However, just like every industry, the market research process has not changed in a long time. As such, the industry is ripe for disruption. That’s exactly what Entropik is aiming to do.
Entropik enables research, marketing, and product teams to move towards a more continuous, collaborative, agile, and scalable way to capture user feedback research by democratizing research and insights data across the organization.
The idea behind Entropik started while founder Ranjan Kumar was pursuing his Bachelor of Tech degree at the India Institute of Technology in 2004-08 as part of a student project. Fast forward a few years later, Ranjan has turned his project into an emotion AI startup.
To further support its explosive growth, Entropik announced today it has raised $25 million in Series B funding led by Bessemer Venture Partners and SIG Venture Capital. The round also saw participation from Trifecta Capital, Alteria Capital, and long-time existing investor Bharat Innovation Fund.
Entropik will also use the fresh funding to continue to disrupt consumer research for global brands and build world-class products out of India, enabling research, marketing, and product teams to move towards a more collaborative, agile, and scalable way to conduct research. They will also focus on expanding their footprint across the US, Europe, and Asian markets.
Fintech startup Fierce launches out of stealth with $10M in funding to help users earn high-yield returns on their financial assets
Today’s financial market is filled with a plethora of solutions. But knowing what to invest in and navigating through various investment opportunities can feel disjointed and overwhelming for the average person. That’s why one fintech startup is on a mission to help users and level the playing the investing playing fields for everyone.
Enter Fierce, a fintech startup on a mission to empower users to take charge of their finances with confidence — regardless of where they are on their financial journey — by reducing the friction most people face in the current landscape of fractured spot solutions.
Fierce has just emerged from stealth with the launch of an all-in-one finance “super app” that the company said to offer users industry-leading yield on cash, yields on stocks, wealth, and portfolio tracking returns for its users. The App is currently available on iOS, with Android coming soon. In conjunction with the launch, Fierce also announced a $10 million Seed funding.
The funding round included the participation of leading institutional investors including Pendrell, AP Capital, Wheelhouse Digital Studios, Space Whale Capital, and several notable angel investors. Fierce intends to use the funds to grow its team, acquire more customers, and further its goal of bringing the benefits of the app to as many people as possible.
For companies with hundreds and thousands of vehicles, managing fleet expenses and payments can become a hassle and burdensome. This is in addition to the complex spending rules fleet managers have to deal with. The situation is not any better with merchants, which sometimes face later payment and spending disputes.
Having faced this problem firsthand, a team of seasoned professionals with experience in automotive software and hardware technology, payments, SaaS data systems, and big data analytics, have decided to address these challenges by developing a technology that eliminates the need for credit cards and enhances current Fleet Management solutions.
Enter CarIQ, a San Francisco-based tech startup that has created a new form of machine identity verification allowing vehicles to connect directly with banks and service providers and make purchases without the use of a physical credit card. Car IQ’s payment network enables vehicles to connect to fuel stations and replaces incumbent fuel cards, and greatly reduces tedious back office reconciliation time. Car IQ’s technology brings innovation to the $600 billion connected vehicle payment market that has been ripe for disruption for far too long.
As a result of increasing demand from customers and merchants for its services, Car IQ announced on Tuesday it has raised $15 million in addition to its Series B funding. The oversubscribed round was led by Forte Ventures with participation from existing investors including State Farm Ventures®, TELUS Ventures, and Avanta Ventures (the corporate venture arm of CSAA Insurance Group).