Top tech startup news for Thursday, April 27, 2023: Ansa, Dropbox, Energy Dome, iLearningEngines, Intel, and Replit
Good evening! Below are some of the top tech startup news stories for Thursday, April 27, 2023.
Intel posts biggest quarterly loss in company history as PC sales drop and chip wars intensify
Is the Intel era coming to an end? Intel reported its first-quarter results on Wednesday with a staggering 133 percent annual decline in the earnings per share, making it the biggest quarterly loss in company history. That’s not all. The company revenue also fell by nearly 36 percent to $11.7 billion.
According to Refinitiv, Intel’s projected earnings for the second quarter are lower than what analysts had estimated. The company expects a loss of 4 cents per share and revenue of $12 billion, falling short of the anticipated earnings of 1 cent per share on $11.75 billion in sales.
The Santa Clara, California-headquartered chipmaker also reported a net loss of $2.8 billion compared to a profit of $8.1 billion last year.
“We still have more work to do as we reestablish process, product, and cost leadership, but we continue to provide proof points each quarter,” Gelsinger said on an earnings call. “We are seeing increasing stability in the PC market with inventory corrections largely proceeding as we had expected,” Gelsinger said on the call, signaling the PC market may be reaching a bottom.
Intel’s Data Center and AI segment, specifically its server chip division, experienced a more significant decline, plummeting by 39% to $3.7 billion.
“Server and networking markets have yet to reach their bottoms as cloud and enterprise remain weak,” Gelsinger said.
Founded in 1968, Intel is best known for its microprocessors, which are widely used in personal computers, laptops, servers, and other computing devices. The company also produces a range of other hardware components, such as motherboard chipsets, network interface controllers, solid-state drives, and graphics processing units (GPUs).
Italian climate startup Energy Dome has secured €40 million (~$44M) in Series B funding, co-led by Eni Next, the venture capital arm of Italian energy company Eni, and Neva SGR, a venture capital firm owned by European banking group Intesa Sanpaolo.
Barclays’ Sustainable Impact Capital, CDP Venture Capital, Invitalia, Novum Capital Partners, and 360 Capital, all of whom are existing investors, also contributed to the funding round. Additionally, new investors such as Japan Energy Fund and Elemental Excelerator participated in the investment round. The company will use the new capital infusion to enter what the company calls “full commercial scaling mode on a global basis.”
“The use of proceeds of the round will serve to provide financial guarantees to customers as a demonstration that this team is ready to put their ‘skin in the game’ alongside their customers in deploying the CO2 Battery,” Energy Dome added. “The investment will also support Energy Dome’s business expansion in the U.S. in order to leverage at maximum from the opportunities deriving from the Inflation Reduction Act and the associated Investment Tax Credits available for utility-scale energy storage.”
Energy Dome specializes in utility-scale long-duration energy storage solutions. The company aims to tackle the challenges of energy storage faced by the renewable energy industry, such as the intermittency of energy supply from renewable sources. Its solution offers a flexible, reliable, and cost-effective way to store energy and provide a stable power supply.
Its “CO2 Battery” uses CO2 in a closed-loop cycle to store energy generated from renewable sources (such as solar). The company was founded in 2017 by a team of experts in renewable energy, electrical engineering, and industrial automation.
Ansa emerges from stealth with $5.4M in funding to help merchants create virtual wallets for customers
In the US, credit and debit cards make up 57 percent of consumer payments. But the true costs of processing payments to merchants remain hidden from the average consumer. Card fees, particularly for small transactions, can account for more than 12.5 percent of the transaction value.
Sophia Goldberg and JT Cho, the co-founders of Ansa, have experienced the difficulties faced by merchants while working for Adyen and Affirm, respectively. High payment processing costs are a challenge for merchants across various categories, including coffee shops, quick-service restaurants, transportation providers, vertical platforms, marketplaces, and creator platforms that support micro-transactions. That was why the two co-founders decided to launch Ansa aims to address these problems by helping merchants create virtual wallets for customers. Currently, only a few merchants, mainly retail giants like Starbucks, offer this functionality.
Now, Ansa is aiming to level the playing ground by enabling customers to load digital funds that can be used to conveniently pay for goods and services at their favorite businesses via its white-label closed-loop payments platform. By using virtual wallets, customers can earn rewards for their purchases, making the experience both convenient and beneficial.
Ansa just emerged from stealth on Wednesday with $5.4 million in funding led by Bain Capital Ventures, with participation from Box Group’s Nimi Katragadda, Wischoff Ventures’ Nichole Wischoff, Cambrian Ventures, The Fintech Fund, and Susa Ventures. Over 75 percent of the funding came from female investors and angels.
“Over the last few years, digital wallets have become an increasingly popular payment method. We’ve seen this adoption in other countries such as China through AliPay and WeChat Pay, and expect this trend to continue globally. In the US, Starbucks has been a leader in closed-loop mobile payments with its wallet. Overall payments in the US lag behind the world. We’re on a mission to help merchants embed payments in a way that fits their use cases best,” Goldberg said. Ansa is currently piloting with customers in the coffee and quick-serve industries although their platform can support many verticals.
Ansa’s solution enables merchants to swiftly and legally launch seamless, digitally-native customer balances to boost revenue and reduce payment costs. Customers who maintain a balance with a merchant are likely to make more frequent purchases with larger transaction amounts, and the saved costs can be allocated towards loyalty programs or marketing initiatives to solidify the customer relationship.
Cloud storage provider Dropbox becomes the latest tech company to let go of its employees. The San Francisco, California-based Dropbox announced today its plans to reduce its global workforce by 16% as part of the cut-cutting measures caused by slowing cloud growth. The cut will impact about 500 of the 3,118 full-time employees.
The news comes two years after the company laid off 11% of its global workforce, which affected 315 people. In addition to the layoff, the company also let go of its Chief Operating Officer Olivia Nottebohm a month later.
However, the company also revealed its intentions to hire new talent to develop its AI offerings, Reuters reported. Similar to other major players in the technology industry such as Microsoft and Meta Platforms (formerly known as Facebook), Dropbox is now competing for a portion of the rapidly expanding market by introducing new products and services.
DropBox CEO Drew Houston said in a statement that the company’s primary cloud business growth is slowing due to the economic downturn posing challenges for customers. As a result, some of the company’s profitable investments are no longer sustainable.
“We’ve been bringing in great talent in these areas over the last couple years and we’ll need even more,” Houston said in a memo to staff. “The AI era of computing has finally arrived … The opportunity in front of us is greater than ever, but so is our need to act with urgency to seize it.”
As of the end of 2022, Dropbox had 3,118 full-time employees, with 2,583 located in the United States. The company reported that it had repositioned some employees from one team to another to concentrate on AI projects, but it required more expertise with a different mix of skill sets, particularly in AI and early-stage product development.
Founded in 2007 by Arash Ferdowsi and Drew Houston, Dropbox simplifies the way people work together. 500 million registered users around the world use Dropbox to work the way they want, on any device, wherever they go. With 150,000 businesses on Dropbox Business, we’re transforming everyday workflows and entire industries. Dropbox received initial funding from seed accelerator Y Combinator.
Today, Bethesda, Maryland-based iLearningEngines announced it has agreed to public via a merger with blank check company Arrowroot Acquisition Corp in a deal that values the combined company at $1.4 billion.
As part of the deal, iLearningEngines will receive $143 million in gross proceeds, some of which will be allocated toward future acquisitions, Reuters was the first to report the deal earlier on Thursday.
The deal comes at a time when the business potential of artificial intelligence software has piqued the eye of the world’s greatest investors, as the popularity of futuristic chatbots such as ChatGPT has risen in recent months. According to PitchBook, artificial intelligence, and machine learning startups have funded over $12.1 billion this year.
In 2021, Arrowroot Acquisition Corp completed its initial public offering, raising $290 million to fund potential mergers with companies in the enterprise software sector. Following the completion of the deal, the merged entity will be rebranded as iLearningEngines, Inc, and will be listed on Nasdaq under the ticker symbol “AILE.”
Sometimes called a blank-check company, SPAC is a shell company that has no operations but plans to go public with the intention of acquiring or merging with a company utilizing the proceeds of the SPAC’s initial public offering (IPO). SPAC activity has slowed down since the second half of 2022 due to inflation and a slowdown in the overall economy. However, some analysts expect a resurgence in the second half of the year as inflation cools down.
The deal comes at a time when the business potential for AI software continues to draw significant interest from some of the world’s largest investors, which was triggered by the popularity of OpenAI ChatGPT. PitchBook reports that global artificial intelligence and machine learning startups have raised approximately $12.1 billion this year.
GitHub Copilot competitor Replit raises $100 million in funding as investors bet big on generative AI
The sudden success of OpenAI ChatGPT has led to a surge in the flow of investment into generative artificial intelligence (AI) as investors pour billions of dollars into promising AI startups. The latest is Replit, a San Francisco-based generative AI startup that is starting a browser-based coding revolution with its collaborative integrated development environment (IDE).
Back in February, we wrote about Replit after it launched its web-based IDE, a ChatGPT-like bot for coders similar to the GitHub Copilot competitor. Replit got its name from Read-Eval-Print-Loop (REPL), an interactive programming environment where user inputs are read and evaluated, and then the results are returned to the user. Immediately after the launch, Replit quickly caught the attention of prominent investors in Silicon Valley.
Fast forward two months later, Replit announced this week it has raised about $100 million ($97.4 million) at a $1.16 billion post-money valuation, making the company a new member of our unicorn startup club. The Series B extension round was led by Andreessen Horowitz, with participation from Khosla Ventures, Coatue, SV Angel, Y Combinator, Bloomberg Beta, Naval Ravikant, ARK Ventures, and Hamilton Helmer.
“We are relentless in our mission to empower a billion software developers,” Replit founder and CEO Amjad Masad said in a statement, adding that the new funds — which bring Replit’s total raised to over $200 million — will be put toward further developing the core product experience, expanding Replit’s cloud services and “driving innovation” in AI.
“AI has already brought that future closer,” Masad continued. “We look forward to expanding our offerings for professional developers.”
Replit is aiming to do coding what Figma did to the design world by using AI to write code via a browser. The startup recently launched Ghostwriter Chat, the first-of-its-kind technology.
Replit startup has trained an AI bot, like ChatGPT, which can assist in writing computer code through conversational interaction. Starting Wednesday, Replit said software developers will now have access to powerful new technology, Semafor reported.