These Startups Raised $1B+ This Month
AI is Not Just OpenAI! Discussing fresh funding among AI startups
Sometimes, when we discuss grandiose events, we lose sight of the other essential news. This is especially true in the AI industry: people talk a lot about OpenAI, Microsoft, and Google but rarely pay attention to the equally important developers.
That’s unfair.
So, let's fix that. Today, I propose to take a look back at the past month and discuss which AI startups have caught investors’ attention (they collectively raised over $1B!) and why that happened.
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AI Isn't Just OpenAI
Yes, even though I will talk about underdogs today, we can't do without the nice guy in the picture above. Because the month with big investments for AI startups kicked off with news about OpenAI. Let me briefly explain why this is important.
ChatGPT Developer raised $6.6B and received a $157B valuation earlier this month. As a result, OpenAI became one of the top three startups with the biggest venture capital. Now, it’s in the same lineup as Elon Musk's SpaceX and ByteDance (TikTok's parent company). This event was also important for Microsoft: according to Bloomberg, the amount invested in OpenAI from this corporation approached $14B.
Nvidia also took part in the round. However, Apple was not among the investors, although some insiders say it was actively negotiating its participation.
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So, what does that tell us? Quite a lot:
VCs are ready to make long-term investments. Even the prominent skeptics who think AI is a “bubble” recognize it's pretty solid. Despite OpenAI going through staff turmoil, its current valuation is about 40 times earnings, and breakeven won't be possible until 2029; the industry remains a popular source of investment. And the thing is, it gives hope to other startups as well.
By the way, if you want to understand why it's not just OpenAI that's attracting attention but all the projects of its descendants, we've got one post for you. We recently broke down how OpenAI's Mafia is growing this year:
And here are the ones that are already benefiting from it.
Poolside | $500M For AI Coding Assistant
The first company on our list is Poolside.
Poolside is an AI startup focused on developing coding assistants. Founded in early 2023 by Jason Warner (former CTO of GitHub) and Eiso Kant (co-founder of several dev-focused startups), the company recently raised $500M in Series B funding. This brings its total valuation to $3B. Investors’ list included Nvidia, eBay, and many others.
Poolside creates models that improve software development processes. The company's flagship model, Malibu, uses an approach called Reinforcement Learning from Code Execution Feedback. It allows companies to customize their models based on their specific methods and data, ensuring that sensitive information remains secure.
The startup will use the raised capital to purchase 10,000 Nvidia GPUs to train models, expand go-to-market efforts, and boost R&D initiatives.
Poolside has attracted investment amid booming growth in the coding tools market.
These include:
GitHub's Copilot grew to more than 1.8M paid subscribers.
Other AI coding startups such as Magic (raised $320M) and Codeium (raised $150M) have also recently received large investments.
Polaris Market Research predicted that the AI coding tools market could reach $27B by 2032.
Apparently, this is one of the most promising areas of AI.
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