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Alex Wilhelm 0:10
Hello, and welcome back to Equity, the TechCrunch podcast where we uncover the nuances behind the figures and headlines. This is Alex. Good morning. Today is 21st February 2024. Welcome to our Wednesday show where we look back at the important startup and venture capital stories of the week so far. Now, if you were with us yesterday, you might have been asking, ‘Hey, it’s the holiday week. Has so much really happened that another show would be needed?’ And the answer is, yes, a lot has happened and we’re going to talk about it.
Today on the show we have AI in language learning, a neat startup that wants to automate due diligence, Reddit IPO news and then two new venture funds for your notebook. let’s go!
0:54
First up for the startup category, we have a company called Loora. That’s Lure A. Why is this in news? Well, the company announced today that it has closed a $12 million Series A. Lura, named after the Arabic word for language, offers learners multiple AI generated conversation topics and scenarios across sports, technology, business, Think about fashion, books, TV, that kind of thing. The round was led by QP Ventures, bringing the company’s total capital raised that we know of to approximately $21.25 million.
The thesis behind companies like Lura is that they think AI can do at scale what language teachers can’t. Lura itself relies on conversational AI to teach students, and has created an iOS app that allows people to talk to an AI chatbot that then gives them feedback on their English understanding. According to Roy Mor, one of the company’s co-founders, the idea for Lura came from his own frustration with learning languages. And he believes that language learning apps today are for beginners or casual learners and those who want a better or slightly more expensive human teacher. So they want to split the difference and create a device that is cheap and available.
Okay, I really understand. And I think that’s really cool. At the same time. I wonder if we will all learn to speak from digital robots? Will we be as good at talking to each other? I don’t know. I mean, it’s great. But humans communicate, because that’s how language originated. On the other hand, human teachers are expensive. And if you want better language skills, there’s a way to use AI to help more people learn more quickly, at lower cost. I can’t really complain about it. I mean, sure, I’m as disappointed as anyone that Duolingo recently cut back on its contractor force and replaced some of those people with AI translators. But I also think that when you evaluate the near-term costs and the long-term benefits, the trade-off here is very clear. And I think products like Lura are indicative of what we should expect from other companies in the future, too.
2:59
The next startup on my list is, I believe we talked about it when it was at YC. But now we have more. And this company is Delhi. It is a platform that surprisingly attempts to automate key investment due diligence and portfolio management steps for private equity and venture firms using AI. It put together a $3.6 million funding round from Allianz Strategic Investments, Rebel Fund, Singularity Capital and others.
Now, there are obvious risks in using AI to do a job that is designed to filter out potentially negative information that some people want to hide. But there are risks to humans doing this, too. View historical records. Human due diligence sometimes misses important things in big deals. But I suspect that many jobs in the world of hard work are rote, and not that creative. So it generally makes good sense to use AI or machine intelligence. And Delhi is not the only dog barking at this particular tree. Gartner estimates that more than three-quarters of VC and early-stage investor executive reviews will be informed by AI and data analytics by 2025. Expect to see more about it soon.
Dilly claims to have created some pretty neat techniques to help his business stand out from other endeavors. And I would say avoid commoditization. Dilly co-founder Stephanie Song told TechCrunch that her company has, and I quote, “built custom indexing and retrieval pipelines for specific documents to provide high-quality context to their models.” why does that matter? Well, it means that Daily can extract data from unstructured documents, which is great and removes tasks for humans. The proof will be in the revenue pudding, but I appreciate what Dilly is doing and the little joke in its name.
4:47
At the top I promised you Reddit IPO news and I’m here to deliver it. The Wall Street Journal reports that Reddit intends to reserve a portion of the shares in its upcoming IPO for the 75,000 most active users. OK, here are a few things. First of all, the fact that a story like this is coming out is a sign that Reddit is actually making progress towards going public, no BS, this time, it probably will. I would say 80% chance. Basically, it’s a smoke and fire situation. If we are seeing stories emerging about the Reddit IPO process, it means that the IPO process is indeed moving forward.
Second, we have seen little innovation in the IPO process. After the SPAC meltdown, you might think that innovation in the act of going public is a bad idea. But tech companies often have that their counterparts outside the industry have dedicated users that work well for non-traditional IPO investors. So let’s let Reddit run this experiment before deciding on it. It may be that the main users of a service are better initial public shareholders than institutions. Conventional wisdom says no, no, they aren’t. But then again, who cares what the conventional wisdom says? We’re expecting the Reddit S-1 in March, which is just around the corner. And no, I’m not jumping in my chair to demand that March get here sooner.
6:11
Before we talk venture capital news, I have one more note for you on startups. And this is a company called Bioptimus. It’s like mixing Bio and Optimus with one ‘o’. And TechCrunch writes that he wants to apply what we’ve collectively learned about AI models over the past few years, with a particular focus on biology. The company recently raised $35 million, and it was spun out from a company called Ovkin. But it wants to create foundational AI models for biology. Let me just say it feels amazing. What a wonderful place this is to apply new technology to better understand how we live and how we can live better. I dig it.
6:51
Before I send you off to your workday, I have two venture capital stories for you. The first is about food technology. And now we’ve seen a slowing of venture capital flows into food tech investment along with the overall venture capital industry. But Bluestein Ventures isn’t letting that fact slow it down. The Chicago-based early-stage venture capital firm closed on a $45 million capital commitment for its Fund Three. So you know I like it because it’s early stages. This is Chicago and I love food. Now established in 2014, Bluestein Ventures is truly a family affair. It is co-managed by Andrew Bluestein and is the first pair of funds to run the Bluestein Family Office. What is noteworthy about this third fund is that it also includes external capital.
7:38
And to close us down, Partek has closed its second Africa fund called Partek. Africa’s vehicle is worth 280 million euros or just over $300 million. And this news comes just a year after reaching its first close TechCrunch reports that by its size Partech Africa is the largest venture capital fund dedicated to African startups. And they’ve actually raised more money than they originally expected. It had set a target of 230 million euros, so it ended up with only 50 million euros, and it’s good that it raised more money, because Africa needs capital. Venture capital activity has seen a significant decline since the startup boom of the 2021 era. The good news is that Project Africa intends to support more than 20 companies with initial investments ranging from $1 million to $15 million.
And that’s our show for this very lovely Wednesday morning. If you need even more from our friends here at Equity. Well we are the equity pod on X and Threads and even have a TechCrunch bot on TikTok. My name is Alex, I’m Alex on X, we have two sister shows Chain Reaction and Found, listen to them. We’re back on Friday. Then I will talk to you. goodbye.
8:52
Equity is hosted by myself, Alex Wilhelm, and TechCrunch senior reporter Mary Ann Azevedo. We are produced by Theresa Loconsolo with editing by Kel. Bryce Durbin is our illustrator and a big thank you to the Audience Development team and Henry Pickwet, who manages TechCrunch Audio products. Thank you very much for listening, we’ll talk to you next time.
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