October 31, 2024

Billion-dollar babies

Hi there,

Here is this week's Hot or Not.

Hot: AI unicorns

AI unicorn births (private companies reaching $1B+ valuations) more than doubled QoQ to reach 13 in Q3'24.

This means AI accounted for 54% of all unicorns born across the venture landscape in Q3.

More than half of the AI unicorns born in Q3'24 are genAI startups, and they are working across a variety of areas, including:

AI for 3D environments (World Labs)
Code generation (Codeium)
Legal workflow automation (Harvey)

Among the new genAI unicorns, Safe Superintelligence — co-founded by OpenAI co-founder Ilya Sutskever — landed the most sizable valuation ($5B).

Learn more about the newest AI unicorns in our State of AI Q3'24 Report.

Not: Salesforce's e-commerce business vs. Shopify's

Shopify is eyeing bigger companies — and nabbing them from Salesforce.

It says brands like Toys R Us and the mattress co Casper have made the move thanks to its lower prices for its e-commerce services.

Bloomberg mapped how Shopify's business passed Salesforce's marketing and commerce business in 2021:

Source: Bloomberg

Shopify, which built itself by going after small businesses, is betting that large retailers can drive growth and move it beyond the post-pandemic e-commerce plateau. Meanwhile, Salesforce's marketing and commerce segment has been its slowest-growing business unit.

The CRM leader is focusing its attention on Data Cloud — its fastest-growing product — as part of its AI monetization strategy.

Hot: GenAI in AVs

Generative AI is accelerating the timeline for autonomous driving.

The AV sector is in the spotlight after Alphabet's robotaxi unit Waymo's blockbuster $5.6B round earlier this week.

On the tech front, we're watching how startups, big tech, and mobility incumbents are leveraging LLMs and other genAI advancements to:

Reduce self-driving cars' training costs using synthetic environments (i.e., virtual training)
Improve safety and transparency for self-driving cars (e.g., Waymo is using language models to better predict the motion of road agents like pedestrians)
Facilitate passenger-car interactions and personalization (think giving your car more nuanced/complex commands)

CB Insights customers can get all the details in the full brief.

Not: CVC-backed deal activity

Global CVC-backed funding dropped 5% QoQ to $15.7B in Q3'24.

But the drop isn't overly significant — Q3'24 still marks the second-highest CVC-backed funding tally since Q3'22.

CVC-backed deals, on the other hand, declined 10% QoQ to 773 deals — the lowest total since 2018.

Amid the deal downturn, our data shows that CVCs are concentrating their bets on fintech, with the sector drawing more CVC-backed deals than digital health and retail tech in Q3'24.

Dive deeper into CVC activity in our State of CVC Q3'24 Report.

The +1

Doing lines. The graph is terrible, but the legend looks pretty useful, right?

I love you.

Anand

@asanwal

Co-Founder & Exec Chair

P.S. The clock is tickin' on applications for the Digital Health 50 — our annual list of the most promising digital health startups in the world. Apply before the deadline on November 7.