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Are We Surviving the Dustbowl Economy?

In the past few weeks, the "new dustbowl economy" has emerged, reflecting the bleak reality of seed-stage startups struggling to secure funding, stifling their growth potential. Seed funding, crucial for nurturing early-stage companies, has experienced a significant decline, as reported by Carta, with a 25% decrease across multiple sectors from 2022 to 2024. This lack of capital is forcing many startups to operate on a shoestring budget, hindering their ability to attract top talent, scale operations, or effectively compete in their respective markets.

The seed funding drought is a symptom of a larger issue – a tech recession marked by mass layoffs within the tech industry. Intel's recent decision to cut 15,000 jobs exemplifies the challenges companies face due to rising interest rates, inflation, and economic uncertainty. These factors create a ripple effect throughout the industry, impacting both established players and emerging startups.

Amidst this landscape, entrepreneurs must adapt and explore innovative strategies to sustain their businesses. Pivoting business models, seeking alternative funding sources, or maintaining lean operations are potential approaches to weather the storm. Although the current environment poses considerable challenges, it also fosters opportunities for resilient startups to thrive through creativity and adaptability.

As we look toward the post-election period, there is a glimmer of hope that interest rate drops will stimulate the liquidity needed to regain market traction. Also, there are signs that energy is building up for the next investment season, as investors start to re-evaluate opportunities and entrepreneurs remain driven to create and innovate.

During this challenging period, we aim to facilitate meaningful connections for talented founders, ensuring they have the resources and support necessary to flourish when new opportunities arise. By helping them navigate the current difficulties, we can foster a new wave of innovation and resilience in the startup ecosystem, paving the way for future growth.

For Investors: 

Discover a variety of venture opportunities in promising startups, experienced venture funds, and a broad-scope approach to accessing the upside of AI innovation with Ignite’s fund-of-funds. Fill out this quick form to share your preferences, and we'll connect you with ideal opportunities.

Bay Area Startups Collectively Secured Over $1.8B

Deal numbers didn't change much this week, but total investment did, from last week's $640M up to $1.8B to 36 startups. Several megadeals drove that, with Groq's $640M Series B at the top of the list. 

The AI sector took the largest chunk - 40% - of investment dollars this week, with more than 85% of that going to Groq, for its AI chips to challenge Nvidia. And also on that front, Cerebras Systems, another Nvidia challenger, filed confidentially for an IPO that could come out as early as October, while Nvidia itself announced that design flaws in their next-generation Blackwell chips would set back delivery to Q1 2025. Megadeals in the security and aviation sectors placed them second and third in total investments for the week. 

Early Stage:

• Charge Robotics raised a $17M Series A to build robots that automate the most labor-intensive parts of solar construction. 

• Aurascape raised a $12.8M Seed to reimagine cybersecurity for the AI age.

• Napkin AI raised a $10M Seed to transform written content into customizable visuals that can be used across Google Docs, Slides, Canva, Slack, Word, PowerPoint, Email, Text, and more.

• Curio Research raised a $5.7M Seed for their gaming studio building foundation infrastructure serving composable onchain crypto games, starting with our own social strategy title.

• Climatize raised $1.8M Pre-Seed for their platform that makes it easy for you to invest in renewable energy projects.

Growth Stage:

• Groq raised a $640M Series D for their ultra-fast, ultra-low latency AI inference at scale using turnkey generalized software and a deterministic Tensor Streaming architecture.

• Abnormal Security raised a $250M Series D for their AI-native security platform, leveraging machine learning to stop sophisticated inbound attacks and detect compromised accounts.

• FLYR raised a $225M Series D for their technology that unlocks the freedom to innovate for the travel industry.

• Mechanical Orchard raised a $50M Series B to modernize and run crucial business applications used by some of the largest companies around the world.

• Anjuna raised $25M Series B for Anjuna Seaglass, the first Universal Confidential Computing Platform, capable of running applications in any cloud with complete data security and privacy. 

Deal Watch Brought to You By, Dawn DeBruyn @LinkSV

Connecting people, capital & companies in Silicon Valley.

Fueling Innovation:

SID Venture Partners is Ukraine’s first high-technology venture capital firm established by IT experts, for IT enthusiasts. The firm focuses on early-stage technology startups, providing essential funding to shape the future. SID Venture Partners stands out with a team of 13 Ukrainian IT Tech Executives serving as General Partners, including 4 acting CEOs, 2 CTOs, 2 CBDOs, and 1 CFO/Legal expert.

Why SID Venture Partners?

Industry Expertise

SID Venture Partners is industry-agnostic, with a preference for deep tech, B2B, blockchain, fintech, and automotive sectors. The firm’s unique focus on early-stage tech companies (pre-seed, seed) allows it to make impactful investments in startups founded by Ukrainian and CEE innovators.

Global Reach & Resources

With an average ticket size of $300K, SID Venture Partners leverages a worldwide network of 200+ service business customers across 11 countries. This network provides strong opportunities for portfolio companies to raise capital and scale their businesses globally.

Personalized Investment Approach

Each investment at SID Venture Partners is led personally by one of the General Partners, ensuring full-cycle involvement. Additionally, the firm’s Limited Partners, who are industry experts, provide counsel on key decisions, adding another layer of strategic insight.

Who They Are

SID Venture Partners operates across 10 countries and employs 2,000 people, serving top-tier customers like Volvo, IKEA, Verizon, and Scania. The firm ranks in the top 15 IT companies in Ukraine and holds a top 3 HR brand position in the country. Their expertise includes 250+ blockchain experts and a track record of successful exits, such as a blockchain product company in 2021.

Contact SID Venture Partners:

• General Inquiries: [email protected]

• Investor Updates: [email protected]

• Visit SID Venture Partners :SID Venture Partners

• Follow SID Venture Partners: LinkedIn: SID Venture Partners

Around The Valley

Whats Next?

What Summer Vacation?! August is 🔥 in Silicon Valley

August is shaping up to be our most action-packed month yet. We're kicking off with three Ignite events in early August, setting the stage for what's to come. The excitement peaks on August 15th with two major partner events capturing the tech community's attention

What’s in store for next week:

1. Aug13 | Taco Tuesday!! Founders & Funders is back in Los Gatos. Come early for the 🌮, stay for the 🍻. Also, put on your best shirts, there will be 🎥 happening.

2. Aug14 | Let’s Talk Agentic Flows: Mariane Bekker and the Founders Creative community is leading a talk on all about AI Agents

3. Aug15 | Soiree in the South Bay: The Startup Grind Summer Soiree is the must-attend event for the in-crowd. With limited capacity and the startup and investor sections already at full occupancy, they are now exclusively welcoming select Series A+ startups.

4. Aug15 | Step_SF is ready for 🚀 Our friends at StepSF are hosting a cutting-edge gathering in the iconic North Beach district, attracting a dynamic mix of international and Silicon Valley players.

These events promise to be goldmines for networking and offer invaluable insights into the current startup climate. Don't miss out – August is poised to be a defining month in the tech world!

Join us for an unforgettable day exploring the backbone of the AI era at the must-attend AI event of the season. The AI INFRA SUMMIT brings together AI developers, tech pioneers, and visionary leaders to drive collaboration and innovation.

Experience thought-provoking keynotes from industry giants AMD and Supermicro, and connect with over 500 like-minded professionals shaping the future of AI. Don't miss this transformative event featuring a day of insights from 10 AM - 5 PM, followed by a networking afterparty from 5 PM - 9 PM!

Want to be part of AI INFRA SUMMIT?

• Sponsorship opportunities are still available – review our Sponsors Prospectus and contact us to secure your spot.

• Become a community partner and contribute to the buzz – email us at [email protected] to get involved

Podcast We’re Listening To:

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Our mission is to provide you with an insider's view of Silicon Valley's undercurrents – insights often overlooked by mainstream sources. While many newsletters offer broad market overviews, we focus on delivering a unique, in-depth understanding of the local ecosystem. We share behind-the-scenes conversations, introduce key players we meet at events, and offer exclusive insights.

Your feedback is crucial in helping us refine our content and maintain the newsletter's value for you and your fellow readers. We welcome your suggestions on how we can improve our offering. [email protected] 

Logan Lemery
Head of Content // Team Ignite

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