Equity: Bret Taylor has a brand new AI startup

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This is a transcription of the latest episode of Equity, TechCrunch’s podcast focused on venture capital. New episodes of Equity air every Monday, Wednesday and Friday.

Listen above or read below to follow our Wednesday show, where we discuss the week’s biggest startup and venture capital news stories.

Transcription

0:10

Hello and welcome to Equity, the TechCrunch podcast where we unpack the numbers and the nuances behind the headlines. It’s February 14, 2024. Happy Valentine’s Day, I hope you eat chocolate and relax on the couch because you deserve it.

This is our Wednesday show, where we dig deep into the critical startup and venture capital stories of the week so far. On the pod today we have an absolute list of killer things. I can’t wait to talk about it.

We’ll start with Bret Taylor’s new startup Sierra and why FlowFi wants to combine people and technology. Next, we have the venture capital rounds of Fold and Antithesis. And we’ll end our startup coverage by asking why everyone wants me to eat more mushrooms. In the adventure corner we have news from Homebrew, Foundry and the latest news from Europe. Let’s go!

1:00 p.m.

To kick off our startup coverage, today I want to talk about someone who is perhaps best known for his work in Big Tech. It’s Bret Taylor. He’s the former Google Maps guy, he founded FriendFeed and then became the CTO of Facebook. He then founded Quip and then became co-CEO of Salesforce. And he is a former board member of Twitter and currently serves on the board of directors of OpenAI. And he’s building a new company called Sierra.

So what does Sierra do? Well, it’s building conversational AI agents, essentially pieces of artificial intelligence that do things for end users, like ask questions or update their account. The AI ​​agent space is busy, but Sierra has already raised $110 million and brought a product to market. So it seems that with plenty of capital, early customers, and probably even some early revenue, this is a well-backed play to dominate a growing software niche.

But it does the job more conveniently than I expected. It is create software tools for its clients instead of just giving them a big bag of stuff to put together themselves.

The joke here is that if you want to raise money today, start an AI startup. But if you Really If you want to raise money today, well, create an AI startup that also sits on the OpenAI board. Fortune reports that Sierra uses both closed – aka OpenAI – and open source AI models that it strings together to prevent hallucinations and help its AI agents actually perform tasks for its customers. Chained LLMs could become a trend.

2:36

Moving along [to] FlowFi. I think it’s an absolutely fascinating startup. It’s just raised $9 million from Blumberg Capital. But the way he tackles his market, the financial management of startups, really makes me think.

So there is a strong trend today to use AI to do as much as possible of what humans can do, as often and as quickly as possible. The logic here is quite simple. Computer agents are much cheaper than human workers. Replacing the latter with the former just makes good business sense. However, FlowFi is building a software suite for startup finances that it pairs with a marketplace of real humans who help its clients with their books. So it’s about creating more human software instead of software with more AI.

And frankly, in this case, I understand. You don’t want your CFO to be a robot. You want someone who is grizzled, experienced, and can give you the familiar CFO look when you make a stupid mistake or spend too much money on your business travel dinners. The company therefore offers accounting assistance, a CFO type service and assistance with the preparation of tax returns, only with software. And humans in charge. Very cool. But let’s see how this evolves.

3:47

And there was so, so, so much more this week. I had to condense a few things, but I want to cover more companies. So let’s start with Bold. He just raised $50 million, and works on payments in Latin America. So this is a big round in a region that was once absolutely crazy about fintech, and given the pushback of companies that we’ve seen in Latin America, and in fintech in general, it’s cool to see Bold raise funds for this project, located where it is. Bold is a welcome ray of light compared to many other Latin American fintechs hoping to raise more capital on their own. And if you remember, on last Friday’s show, we talked a lot about how Latin American startups are more effective according to several key indicators than those of other regions. So maybe venture capitalists here see this and put their checkbooks to work where it could have the most impact.

4:35 p.m.

Next up is a company called Antithesis. He just raised $47 million for its automated software testing service. I chose this one because I think it’s pretty cool. The reason is that everyone agrees that software is the future of the world. But in reality, creating written code that is safe, secure and stable is not an easy task. You can kind of compare it to writing and editing: you need both to have a good final product. So Antithesis builds a set of tools to help make the code very efficient, if I can put it that way. It’s clear that there is a lot of competition, especially in the startup world. But I don’t think you can get that much capital in today’s market if your numbers aren’t great. Antithesis, to be monitored.

5:20 p.m.

And then to close out our startup coverage, why does everyone want me to eat mushrooms? In fact, it’s getting a little weird. This time it’s a startup called Spacegoods – quite a word. They are a London-based wellness brand that wants to use mushrooms and nootropics to create a range of powder blends. TechCrunch claims its product will improve my energy, relaxation and mood. To which I can only say that it is safe. Other startups are using mushrooms to make faux leather, protein-rich foods and energy drinks. Apparently mushrooms can do anything. And that means the people who wrote “The Expanse” were right. I guess we should all be on the lookout for bottles of mushroom whiskey, which must be on the way.

6:04 a.m.

Moving from startups to venture capital, our first venture capital story of the morning is this Homebrew targets $50 million for new fund . . . according to a filing with the SEC. And that filing is actually a bit surprising because Homebrew said nearly two years ago that it was pursuing an evergreen, more stadium-agnostic model that would be financed solely by partners Satya Patel and Hunter Walk. So what do we think of the news? I have some ideas. This could be perhaps an opportunity fund, or perhaps a very suitable vehicle for larger follow-on investments in prior deals.

If Homebrew can self-fund, its previous funds have worked very well. So people might want to co-invest a little with him, even though his main funds will now come internally. Regardless, can you imagine the LP meetings of a fund backed entirely by its own general partners? It would sound like “Hello and hello. How did we do so well this quarter? Okay, the meeting is adjourned.

7:13 a.m.

But if Homebrew reloads, Foundry Group walks away. Foundry is an 18-year-old venture capital firm with nearly $3.5 billion in assets under management. And he has has quietly decided to close its doors and no longer raise funds. The move surprised TechCrunch because the company announced a $500 million fund last year.

Over the years, Foundry has invested in more than 200 companies and 50 venture capital firms. And that’s according to co-founder and partner Seth Levine. As for the names you know, Foundry has backed companies like Fitbit and Zynga. But in an article, Levine wrote that, and I quote, “while venture capital firms rarely make such decisions, that is precisely what we planned to do when we launched the foundry in 2006. Since our creation, we intentionally decided not to build a legacy or generational business.

In a way, this seems rather refreshing. Do something for a while, make a lot of money, then move on. This seems oddly neat, especially because of what we’ve seen at other venture capital firms. A major generational change or transfer of responsibility can get complicated. But don’t worry, Foundry still has money to invest in its latest fund. It’s just not going to spark another one.

8:30 a.m.

And to close us out, our own Anna Heim reports that Germany-based Earlybird Health has organize the final closing of its second fund, which will be worth 173 million euros, or approximately $185 million. It’s actually more than twice the size of Earlybird’s first health-focused fund, very creatively named Health One and worth around €85 million at its own final close. So even though the two funds are similar in terms of thesis and stage, the larger, newer fund will allow Earlybird to write larger checks. Who doesn’t love a little more ownership? And as Earlybird intends to invest primarily in Europe, including the UK, its new fund could be good news for the region’s health tech startups, many of which are strapped for cash after the very public fall of telehealth company Babylon.

9:23 a.m.

And that’s our show for this delicious Wednesday morning. Kisses to you. We hope you are well.

We’ll have more for you on Friday, but in the meantime, we’re equitypods on X and Threads and we’re TechCrunchPods on TikTok.

In the meantime, I highly recommend checking out our two sister shows. It is Chain reaction on the pace of crypto and Find talking to the founders about how they built what they did. All right. It’s Alex, I’ll talk to you soon. Bye.

Equity is hosted by myself, Alex Wilhelm, and TechCrunch senior reporter Mary Ann Azevedo. We are produced by Theresa Loconsolo and edited by Kell. Bryce Durbin is our illustrator and many thanks to the audience development team and Henry Pickavet, who manages TechCrunch audio products. Thank you very much for listening and we’ll talk to you next time.

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