Legal tech, VC brawls and saying no to big offers
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This week we are talking about Wiz’s bold decision, VC’s public feud, legal tech’s new capital and a16z’s close call. Let’s go!
Most interesting startup stories from the week
Wiz says no to Google: Walking away from the search giant’s $23 billion takeover proposal wasn’t an easy decision for the fast-growing, four-year-old cybersecurity startup that was valued in May at $12 billion. “Saying no to such humbling offers is tough, but with our exceptional team, I feel confident in making that choice,” Wiz’s CEO Assaf Rappaport wrote in a letter to his staff. The company is now aiming to reach a milestone of $1 billion in ARR by 2025, and an IPO, though Rappaport didn’t provide a timeframe for potential listing. Read more
Cohere beats back generative AI rivals: Cohere, a Canadian startup that builds language models for specific businesses rather than consumer applications, has raised $500 million at a $5.5 billion valuation. At the end of March, the company was generating $35 million in annualized revenue, up from around $13 million at the end of 2023, according to Bloomberg. Cohere may be growing fast, and investors are clearly willing to pay up for that growth — valuation stands at 157 times ARR, to be exact. Read more
VCs see opportunity after CrowdStrike outage: In 2024, one buggy software update should probably not be allowed to take down so many of the globe’s most important computer systems. But some VCs say that a crop of new startups could be the way to prevent such a thing from ever happening again. Read more
Reigniting decade-old drama: VC David Sacks and Rippling founder Parker Conrad had a public spat on X with many among the Silicon Valley elite taking sides. Accusations flew and sides were chosen. VCs are generally trying to be founder friendly, but such public feuds could be damaging to the industry’s reputation. Read more
Most interesting fundraises this week
Until recently, startups weren’t especially successful selling tech to the legal profession. But times may be changing. We saw two legal tech deals this week.
Legal growth and profitability: Clio, a Canadian software company that helps law practices run more efficiently with its cloud-based tech, was founded 16 years ago. It seems like the company is finally reaching its stride. This week it raised a $900 million Series F at a $3 billion valuation, nearly doubling the value it achieved in 2021. The profitable company has also increased its ARR to $200 million, up from $100 million two years ago. Clio’s growth has increased thanks to its embedded payments and AI offerings. Read more
Harvey’s case: The two-year-old legal AI co-pilot Harvey has nabbed a $100 million Series C led by GV at a $1.5 billion valuation, up from $715 million in December of last year. While investors are betting big on Harvey’s future, lawyers may be reluctant to use it widely, given “language models’ proclivity to spout toxicity and made-up facts,” writes TechCrunch’s Kyle Wiggers. Read more
Staying on top of things: Vanta, a company that helps businesses stay secure and compliant, just raised a $150 million Series C at a $2.45 billion valuation. Six-year-old Vanta started by helping small businesses get certified but now wants to be the go-to security partner for big companies too. Read more
Preventing tricky prompts: Lakera, a Swiss startup that protects generative AI applications from malicious prompts and other threats, has raised a $20 million Series A. The company’s software safeguards against prompts that could force language models to divulge private information. Read more
Most interesting VC and fund news this week
a16z’s close call: A security researcher exposed a major flaw in a16z’s website that could have leaked sensitive company data. The bug gave access to emails and passwords, the researcher discovered. Luckily for the prominent VC firm, the flaw was patched quickly and no data breach occurred. Read more
VCs are still pouring capital into AI: New data from Crunchbase shows that generative AI startups are on pace to shatter their last year’s already impressive $21.8 billion funding haul. Read more
Last but not least
From his high school bathroom, 17-year-old Eric Zhu has launched Aviato, a platform that analyzes private market data and aims to compete with heavyweights in private market intelligence: PitchBook and Crunchbase. Read more
