🕶️ AI thrives, others survive: the new VC landscape explained

Six bullets of updates

1. 🚨 OpenAI halts its Sora API plans due to capacity issues, as Google and AWS race ahead in the space.

2. 🌟 20VC brings on Julien Codorniou as general partner, expanding its seed-stage focus with a $400M fund boost.

3. 🇫🇷 Hexa, a Paris-based startup studio, unveils new AI and health-tech ventures while retaining a 30% stake in each.

4. ⚖️ Meta hit with a $263M EU fine for a 2018 data breach affecting 3 million users, underscoring data protection needs.

5.  🧑‍🤝‍🧑 Bridgy Fed connects social networks with over 60,000 users, driving an interconnected open web by 2025.

6. 🔍 AI search evolves as Otterly reaches 1,000 users, tackling the challenge of declining organic traffic.

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A tale of two valuations: how AI is stealing the VC spotlight

The venture capital landscape is increasingly divided between AI startups and everyone else, highlighting a "tale of two cities" in fundraising. While AI companies like ElevenLabs and Cohere are commanding sky-high valuations—reaching up to $5 billion pre-money for Series D deals—non-AI startups are struggling.

Data from Carta underscores this disparity, with Series B valuations ranging from $40 million for the bottom 10% to nearly $1 billion for the top 10%. Non-AI startups, even those with solid revenue growth, face significant challenges in securing follow-on funding, with only 9% of Series A companies raising Series B within two years, compared to 25% previously. According to Tribeca Venture Partners' Brian Hirsch, these companies often have strong fundamentals but lack the market's favor. Read more!

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Startup Events and Deadlines

1. Reflect, Connect, Recharge - Founder's 2024 Retrospect Workshop | Dec 21 | San Francisco

2. Startup Dinner Club: Flushing Food Tour 👟 | Dec 21 | NYC

3.  Entrepreneurs Roundtable Accelerator | Deadline: Jan 1 | New York

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These companies just raised money

1. 🌟 Databricks pulls off a $10B raise, hitting a $62B valuation—surpassing OpenAI's largest round of $6.6B.

2. 📈 Shares of MobiKwik surged 82% on their India market debut, valuing the fintech at $464M, well above its $250M target.

3. 🕒 Databricks CEO delays IPO until 2025+ despite the $10B raise, citing market volatility and election-year challenges.

4. 🌍 Google invests $90M in Cassava to bolster Africa’s digital infrastructure amid a cloud-spending boom.

5. 🌱 Terradot, a Brazilian-American climate tech startup, secures $58M Series A to scale carbon removal in tropical regions.

6. 💻 AVARA raises $31M to power Lens' decentralized social apps, enabling cheaper transactions using zkSync tech.

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FTC calls out bait-and-switch tactics

The FTC has introduced a new rule banning hidden “junk fees” in live events, hotels, and vacation rentals. This move targets “bait-and-switch” pricing tactics that bury fees like “resort” or “convenience” charges in advertised prices, making it harder for consumers to compare costs. While businesses can still charge these fees, they must now display them upfront, ensuring the total cost is clear from the start. The rule also mandates that total prices be more prominent than other pricing details and requires disclosure of additional fees, such as taxes, before payment.

FTC Chair Lina Khan emphasized the importance of transparent pricing, stating that consumers deserve to know exactly what they’ll pay without surprise charges. The rule, estimated to save consumers 53 million hours annually, is seen as a win for fairness and clarity. However, with a new administration taking office, its long-term future may be uncertain.

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How to write a Killer Elevator Pitch - 2025

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