Weekly Update #4

USD 458.03m in capital raised, Luminoso Technologies Q&A

Data from the Week 📊

Last week, I tracked 71 early-stage startup capital raises totalling USD 560.76m, down from USD 458.03m the week prior. The median amount raised fell toUSD 4.28m from USD 5m.

I’m presenting all of the early-stage deals tracked last week, which can be found here.

I’m also continuing to track the amount of time spent raising capital and social media presence. I’ll make use of those numbers in the weeks ahead.

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Highlighted Deal 📌

Dr. Catherine Havasi, co-founder of Luminoso Technologies, spoke to PD Reporter on the heels of the company’s USD 12.6m Series A1 round earlier this month.

How long did the company devote to raising the round? If you had to estimate, how many man-hours per week did the company devote to the process of raising capital?

For a series A startup, fund-raising is a constant activity; we’re always balancing the day-to-day work -- improving our technology, helping existing clients and finding new ones, and planning our expansion -- with the fund-raising work of board meetings, investor pitches, and partnership discussions. While the efforts wax and wane, there was never a week that’s gone by where I didn’t spend at least some time working on fund-raising.

I’ve often been talking with our clients and prospective clients on multiple levels. First of all, is there a business case for how our natural language technology can help them more effectively understand their customers’ needs, so they can save resources while improving the customer experience? Secondly, given the strategic importance of machine learning and AI-based technologies such as ours, does it make sense to take a deeper stake in our company?

How many investors had the company spoken with during the period of discussions?

We explored a lot of different options, some with investors that specifically liked our technology, some with companies in the same strategic space, some with new investors looking to broaden their portfolio in AI and machine learning. In the end, we found that our best option was the familiar, and decided to stay with some of our existing investors who understood our business well and the value we can bring to our global clients.

What’s been the total amount raised to date?

About $20 million.

How will you look to deploy the capital from the round?

It may seem trite when funding announcements like ours say we’ll “use the capital to accelerate customer demand and expand our team,” and yet that’s really what the story is: hire more, educate more, earn more. So many software companies create great technologies but never get the market visibility to find more revenue sources and be successful. We lose 100% of the deals that we’re not in, and the solution to that problem is to increase our reach and our ability to execute on the sales and marketing side, to compliment what we’ve already accomplished on the technology side.

Any other details that you care to share?

It’s so important to have investors who see the value of your technology and share your vision for what it can accomplish. The approach we use, with our “common sense” natural language technology, gives us a strong advantage in performance and deployment time versus more traditional approaches -- it's literally minutes, as opposed to months, of effort. From the evidence to date, they’re as confident as we are that we can win the bake-offs and really make a difference for some of the largest companies in the world, once we get in front of them.

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Interesting Reads 🤓

One of the major stories from last week in the wider world of tech was the self-driving Uber car that struck and killed a pedestrian in Tempe, Arizona. Uber halted its self-driving car test after the accident. What will be interesting to watch is how this accident and any subsequent public policy changes impacts the emerging startups in the self-driving vechile space. Embark Trucks, Pony.ai, lvl5, Ouster, and Ridecell are all early-stage startups in the space that would be impacted by a precipitous change in investor enthusiasm.

Earlier today, Coinbase announced that it would be adding support for ERC20 tokens. While the cryptocurrency space has been in a bear market since the beginning of the year, this announcement could provide some momentum to the early-stage projects in the Ethereum ecoystem. Two ERC20 tokens ticked up this afternoon after the announcement despite downward pressure on most of the market: 0x and Basic Attention Token.

Felix Salmon looks at how roboadvisors may be straying from their low-fee origins (Wired).

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If you’re building an exciting early-stage startup that’s raising venture capital and you would like your startup featured, please get in touch by emailing chris@pdreporter.com.

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