Top tech startup news for Thursday, March 30, 2023: DataDome, Ledger, Virgin Orbit, and Unacademy
Good evening! Below are some of the top tech startup news stories for Thursday, March 30, 2023.
Virgin Orbit to cease operations and lay off nearly entire workforce after it fails to secure funding
Virgin Orbit announced it will shut down its operations and terminate nearly all its employees after the company was unable to secure funding. In an all-hands meeting on Thursday afternoon, CEO Dan Hart informed employees that Virgin Orbit will halt operations “for the foreseeable future” due to its inability to secure funding. As a result, the company will terminate almost all of its workforce.
“Unfortunately, we’ve not been able to secure the funding to provide a clear path for this company,” Hart said, according to audio of the 5 p.m. ET meeting obtained by CNBC. The announcement comes just a week after Virgin Orbit said it was close to raising $200 million from Matthew Brown to prepare for its next mission.
“We have no choice but to implement immediate, dramatic, and extremely painful changes,” Hart said, audibly choking up on the call. He added this would be “probably the hardest all-hands that we’ve ever done in my life.”
Hart stated that the company will retain only 100 positions, which is around 10% of the workforce. He also mentioned that the layoffs would impact all teams and departments. In a securities filing, Virgin Orbit reported that the layoffs would amount to 675 positions, which is approximately 85% of its workforce.
“This company, this team — all of you — mean a hell of a lot to me. And I have not, and will not, stop supporting you, whether you’re here on the journey or if you’re elsewhere,” Hart said.
Indian EdTech startup Unacademy is laying off 12% of its workforce, making it the latest in a series of tech companies that have implemented staff cuts amid mounting recession fears.
According to a report by Reuters, citing an internal mail from the company’s CEO, the company blamed the funding winter and pressure to turn profitable for making the hard decision. “Today… funding is scarce and running a profitable business is key,” CEO and co-founder Gaurav Munjal said in an email sent to all staff.
A spokesperson for Unacademy also declined to comment on the layoffs and did not disclose the number of staff impacted by the job cuts or the current headcount. However, Indian business news publication Moneycontrol reported that the SoftBank-backed startup had laid off about 380 employees, reducing its total employee count to under 3,000.
Meanwhile, Unacademy is not alone. Other Indian Edtech startups have also laid off thousands of employees over the past year as they struggle to raise new funding caused by the global economic slowdown. Meanwhile, at least 536 companies have let go of 157,088 tech workers, according to Layoffs.FYI, a site that’s tracked tech layoffs using data compiled from public reports.
Unacademy provides educational content such as video lectures and examinations. In November 2020, The Bangalore, India-based startup raised new funding at a $2 billion valuation led by Tiger Global to democratize education and make it more affordable and accessible.
DataDome announced today it has raised $42 million in Series C funding to “fund global commercial rollout and R&D efforts to ensure that our offering continues to raise the bar, and stays well ahead of bot developers and fraudsters.” The round was led by InfraVia Growth, with participation from existing investors Elephant, ISAI, and others.
Founded in 2015 by co-founder and CEO Benjamin Fabre and his long-time colleague, Fabien Grenier, DataDome protects enterprises from bots and online fraud. The DataDome team describes themselves as “bot hunters.” DataDome is the third startup the duo has co-founded together. And it’s also not the first time Fabre has included Barrier into his startup mix, this time, Barrier has joined the DataDome team as a partner and the Chief Sales Officer.
In a statement, DataDome CEO Fabre said: “Bots have become a common path to fraud. In 2022 alone, DataDome stopped, in real-time, over 250 billion online fraud attempts. Because of how our product is built and deployed, we have a unique lens into attack vectors and can see across silos to stop attacks in their tracks. This is why enterprises like Rakuten, Reddit, and AngelList trust us to protect their digital properties.”
“This cash infusion will fund global commercial rollout and R&D efforts to ensure that our offering continues to raise the bar, and stays well ahead of bot developers and fraudsters,” continued Fabre. “In InfraVia, we have an investor who trusts in and shares our vision and brings years of valuable experience helping companies scale globally. Threat actors don’t stand a chance.”
DataDome’s advanced machine learning solution analyzes an incredible 3 trillion data points every day, enabling it to adapt to new threats in real-time and effectively detect and mitigate attacks.
Over the years, the DataDome team has tackled a significant technical challenge in detecting bots. The detection of bots is not as easy as most people might think, given that a large percentage of website traffic is automated and some bot traffic can be very harmful, testing millions of log-in credentials and jeopardizing companies with account takeover risks.
According to Fabre and Barrier, this account takeover activity has an 8% success rate, as many web users rely on the same credentials across multiple sites. Additionally, Fabre and Barrier have identified three distinct categories of robots, all of which are prevalent in DataDome’s three verticals.
DataDome’s bot and online fraud solution assess the intent of a visit in real-time, every time, to detect and mitigate attacks on mobile apps, websites, and APIs with unparalleled accuracy and zero compromises. Such performance is made possible by the solution’s ability to adapt machine learning algorithms in real-time, at the edge. DataDome protects 300+ enterprises from account takeover, scraping, payment fraud, DDoS, credential stuffing, and more.
Ethics group says OpenAI GPT-4 “is biased, deceptive, and a risk to privacy and public safety,” asks FTC to stop new OpenAI GPT releases
On Tuesday, Elon Musk joined other technology leaders called for a pause on training AI exceeding GPT-4, citing “risks to society.” In an open letter signed by Musk and Apple co-founder Steve Wozniak, tech leaders are calling for a six-month pause to the development of systems more powerful than OpenAI’s newly launched GPT-4.
Just two days later, OpenAI now faces new criticism from the nonprofit research group Center for AI and Digital Policy (CAIDP). In a complaint filed with the Federal Trade Commission (FTC) on Thursday, the advocacy group accused OpenAI of violating Section 5 of the FTC Act, which prohibits unfair and deceptive business practices, and the agency’s guidance for AI products.
The group calls GPT-4 “biased, deceptive, and a risk to privacy and public safety.” The group says the large language model fails to meet the agency’s standards for AI to be “transparent, explainable, fair, and empirically sound while fostering accountability.”
In its complaint to FTC, CAIDP said OpenAI’s ChatGPT-4 fails to meet the FTC’s standard of being “transparent, explainable, fair and empirically sound while fostering accountability.”
“The FTC has a clear responsibility to investigate and prohibit unfair and deceptive trade practices. We believe that the FTC should look closely at OpenAI and GPT-4,” Marc Rotenberg, president of CAIDP and a veteran privacy advocate, said in a statement on the website.
Rotenberg was also one of the more than 1,000 tech leaders who signed Tuesday’s letter urging a pause in AI experiments.
The group urges the agency “to open an investigation into OpenAI, enjoin further commercial releases of GPT-4, and ensure the establishment of necessary guardrails to protect consumers, businesses, and the commercial marketplace.”
Crypto wallet startup Ledger raises an additional $108M in funding to secure your crypto and NFT assets
With the recent collapse of high-profile crypto exchanges like FTX, the race among crypto investors to secure critical digital assets is growing fiercer by the day. While some crypto exchanges have introduced measures such as “proof-of-reserves” to reassure jittery customers, crypto investors are leaving exchanges in droves, hoping to find a safe place to save their holdings.
The demand has set off a boom for makers of the so-called hardware wallets like the France-based wallet and custody startup Ledger, which helps investors store and secure important crypto and NFT assets.
To further meet the increasing demand from self-custodians, Ledger announced today it has raised $108 million as part of its Series C funding round in addition to the €356 million ($385 million today’s money) raised two years ago while maintaining the same valuation of €1.3 billion ($1.41 billion at today’s exchange rate).
The round was backed by new investors including True Global Ventures, Digital Finance Group, and VaynerFund. Existing investors include 10T, Cité Gestion Private Bank, Cap Horn, Morgan Creek, Cathay Innovation, Korelya Capital, and Molten Ventures also participated in the round.
In a statement, Ledger Chairman and CEO Pascal Gauthier said: “Today, Ledger announced our funding round. I’m grateful for our long-term investors’ continued support, and I welcome the new investors backing the current undeniable revolution of value and hardware. These funds will accelerate our mission to bring a new generation of secure consumer devices to hundreds of millions exploring critical digital assets and blockchain-enabled technology.”
The funding announcement comes just three months after Ledger debuted its new hardware crypto wallet to let crypto holders store their cryptocurrency offline. Called Ledger Stax, the credit card-sized crypto wallet was designed by Tony Fadell, a well-known Silicon Valley executive known as the father of the iPod.