Startups Weekly: Major Acquisitions, Funding Rounds, and Legal Battles in Tech

Scale AI has confirmed a significant investment from Meta, which has valued the data-labeling startup at $29 billion. The investment, reported to be around $14.3 billion for a 49% stake, underscores Meta's commitment to advancing its AI capabilities. Scale AI's expertise in generating and labeling high-quality data is crucial for training large language models, which are foundational to generative AI technologies. Alexandr Wang, Scale AI's co-founder and CEO, is stepping down from his role to join Meta and contribute to its superintelligence initiatives. Jason Droege, the current Chief Strategy Officer, will take over as interim CEO. Scale AI emphasized that despite the investment, it will maintain its independence, with Wang continuing to serve on its board of directors. The new funding will be allocated to returning capital to shareholders and fueling further growth, especially amid the intense competition for top-tier AI talent and resources. Industry Reactions and Company Profiles Industry insiders view Meta's investment in Scale AI as a strategic move to bolster its position in the rapidly evolving AI landscape. With major players like Google, OpenAI, and Anthropic making significant strides, Meta needs to enhance its AI infrastructure and talent pool to stay competitive. The acquisition of Wang, a prominent figure in the AI community, is particularly noteworthy, as it brings valuable leadership and technical expertise to Meta's AI division. Scale AI, founded in 2016, has been instrumental in providing data-labeling services to leading AI labs, ensuring the quality and reliability of datasets used to train AI models. The company's recent focus on hiring highly skilled professionals, including PhD researchers and senior software engineers, highlights its commitment to maintaining its leading edge in the field. Meta, originally known as Facebook, has been ramping up its AI investments to develop advanced models capable of generating content and enhancing user experiences across its platforms. The partnership with Scale AI aligns with Meta's broader strategy to integrate AI deeply into its products and services, driven by the vision of creating more interactive and personalized user experiences. Most Interesting Startup Stories from the Week AI Agents: Rubrik Acquires Predibase Rubrik, a data cybersecurity company, acquired AI fine-tuning startup Predibase to expedite the adoption of AI agents by its clients. Predibase, which raised $28 million in venture capital, aims to make AI more accessible and efficient. The deal size was not disclosed but is reported to be substantial. Sailing: NYK Line Acquires Kadmos NYK Line, a Japanese shipping company, bought German fintech startup Kadmos, which provides a salary payment platform for seafaring workers. The acquisition was made to expand NYK Line's fintech services, reflecting its ambition to modernize and streamline operations in the maritime industry. Red Herring? Suno's Timely Acquisition AI music startup Suno, embroiled in copyright disputes, announced the acquisition of WavTool, a browser-based AI digital audio workstation. However, the deal actually took place a few months ago and was disclosed amid ongoing legal challenges. This strategic move may be intended to bolster its position and attract positive attention while navigating these difficulties. Getty Drops Suit Against Stability AI Getty Images withdrew its primary lawsuit against Stability AI, the developer of Stable Diffusion, an AI image generator. While this is a significant development, Stability AI continues to face multiple lawsuits in both the U.S. and the U.K., highlighting the ongoing complexities and legal challenges in the AI sector. Wind Power: Airloom Energy's Wyoming Plant Despite recent setbacks, Airloom Energy, backed by Bill Gates, began construction on its first wind power plant in Wyoming. This move demonstrates the company's resilience and continued commitment to renewable energy solutions, emphasizing the ongoing investor confidence in clean tech startups. Most Interesting VC and Funding News This Week Harvey AI's Revaluation Harvey AI, an AI-driven legal tech startup, secured a $300 million Series E round co-led by Kleiner Perkins and Coatue, just four months after a $300 million Series D round with Sequoia, which valued the company at $3 billion. The new valuation places Harvey AI at $5 billion, showcasing rapid growth and strong investor interest in AI applications for the legal industry. Abridge's $300 Million Round Abridge, an AI startup automating medical notes, completed a $300 million Series E round led by a16z, reaching a valuation of $5.3 billion. This significant funding highlights the growing importance of AI in healthcare, where it can streamline administrative tasks and improve patient care. Kalshi and Polymarket Blockchain-based prediction market platform Kalshi secured $185 million in funding, achieving a $2 billion post-money valuation. Meanwhile, rival Polymarket is reportedly finalizing a $200 million round with a pre-money valuation of $1 billion. Both platforms are gaining traction as they offer new ways for users to make financial predictions and trades. Finom's Growth Funding Finom, a European challenger bank targeting small and medium-sized businesses (SMBs), raised $133 million in a Series C round, adding to $105 million in growth funding from General Catalyst’s Customer Value Fund. This influx of capital underscores the increasing popularity of fintech solutions among SMBs. Raphe mPhibr's All-Equity Round Indian drone startup Raphe mPhibr secured $100 million in an all-equity Series B round led by General Catalyst. The company serves various segments, including military and law enforcement, indicating the broad applications and growing demand for drone technology. Wispr Flow: Simplifying Dictation Wispr Flow, an AI-powered dictation app, finalized a $30 million Series A round, bringing its total funding to $56 million. The company also launched its iOS app, marking a significant step in expanding its reach and user base. Novoloop: Upcycling Waste Plastic Novoloop, a startup focused on upcycling waste plastic, secured a $21 million Series B to finalize the design and initiate construction on its first commercial-scale plant. This investment highlights the growing interest in sustainable solutions and circular economy initiatives. Eventual: Solving Data Processing Challenges Eventual, a startup addressing data-processing issues similar to those faced at Lyft, raised two rounds totaling $27.5 million within eight months. This rapid funding indicates a strong market need for innovative data solutions. Synthflow AI: Custom Voice AI Synthflow AI, a Berlin-based no-code platform for building customized voice AI agents, raised a $20 million Series A led by Accel. The company aims to make voice AI more accessible and tailored to enterprise needs, a trend that is gaining momentum. Better Auth: Simplifying User Authentication Better Auth, the third Ethiopian startup to graduate from Y Combinator, secured $5 million in seed funding. Its open-source framework simplifies user authentication for developers and has quickly gained popularity, reflecting a growing demand for secure and user-friendly authentication solutions. Lux Aeterna: Reusable Satellite Ambitions Space startup Lux Aeterna emerged from stealth mode with $4 million in pre-seed funding, planning to launch a reusable satellite by 2027. This ambitious project highlights the growing interest in space technology and sustainable satellite solutions. Last But Not Least Seasoned early-stage investor, entrepreneur, and author Brad Feld returned to public life after a two-year hiatus, releasing his ninth book, "Give First." TechCrunch interviewed Feld, delving into his new book and his broader perspectives on the startup ecosystem. His insights on mentorship, community building, and giving before expecting returns are expected to resonate with startup leaders and investors alike. Anna Heim, a freelance reporter and editorial consultant for TechCrunch, continues to cover a wide range of startup-related topics, from AI and fintech to global venture capital trends. Her expertise in moderating industry panels and conducting interviews at major tech events adds depth to her reporting, making her a respected voice in the startup community.