Riding The AI Hype Train

Stability AI Rides High on the AI Wave, UK Looks to Become the 'Science Hub' With New Funding, and Luke Cooper's Venture Firm Scales Back on Debut Fund.

Author

Adam from VC Brags
March 06, 2023

Welcome Shareholders,   

In this daily edition of the Brags Newsletter, we'll cover how a startup is capitalizing on the AI Hype train to raise money at a 4x premium, the UK government's grand ambitions to become the science and technology leader of the world, and a venture firm cuts its fundraising target by 80% for its debut firm. 

So sit back, grab a snack, and enjoy!

Startup of the Day

  • Stability AI, which is a major player in the hot AI industry, having achieved unicorn status in a late 2022 funding round, is now in talks with investors to raise more funds.

The parent firm of Stable Diffusion, an AI solution for generating digital images, aims to secure funds at a valuation of approximately $4 billion. Stable Diffusion and OpenAI's Dall-E 2 both offer digital-image solutions and compete in the same space. Stable Diffusion operates by having users type a description of an image they require, such as an astronaut riding a horse, and subsequently generates a realistic or abstract image.

The firm emphasizes that its open-source software is publicly accessible, distinguishing it from its rivals. The software has practical applications in areas ranging from video game design to advertising. VC investments in AI have been ramping up in recent months, with the likes of Microsoft making a $10 billion investment in OpenAI, which is the parent company of ChatGPT. Other tech giants like Google, Amazon, and Meta are also come-tiring to get out front in AI. 

Venture Today 👏

  • The UK government has revealed a £360 million initiative to boost Innovation, draw top talent to the country, and establish it as a science and technology leader by 2030.

The Science and Technology Framework allocates £250 million towards investments in AI, quantum computing, and biotech, with an additional £9 million reserved for the establishment of a quantum computing research center. Another £50 million has been set aside to assist universities and research institutes in enhancing their lab facilities. Additionally, the framework outlines proposals to establish a supercomputer facility dedicated to advancing cutting-edge technologies such as nuclear fusion and AI and also includes the creation of several hundred new Ph.D. positions for AI researchers.

Numerous other European governments have recently revealed comparable initiatives backed by considerably more funding. Germany, for example, established a €1 billion fund in February to invest in deep tech and climate tech firms, while French state bank Bpifrance pledged an additional €500 million to deep tech startups in January. Poland and the Czech Republic, despite having considerably smaller startup ecosystems than the UK, France, or Germany, have also launched funds to support innovative new firms.

Who's Raising?

  • The slowdown in the venture market, coupled with the realities of being a first-time fund leader, is catching up to Luke Cooper's Latimer Ventures, who have slashed their fundraising targets for their debut funds by 80%. 

Having achieved success as an entrepreneur, Cooper now enters the venture capital industry. His company Fixt received $6.5 million in funding before being acquired by the Fortune 500 firm Assurant. Latimer Ventures has raised $8 million to date and has secured $15 million in soft commitments. However, the firm has decided to revise its fundraising target due to the declining trend in the venture capital markets.

Cooper's Latimer Ventures is looking to invest in enterprise software companies at the Series A stage. Notable early investors in the fund include James Cole, former Deputy Secretary of Education, Mark Vaselkiv, former CIO of T. Rowe Price Group, Bracken Darrell, CEO of Logitech, and Dan Rizzo, who was the former CIO of Inovalon. Latimer Ventures made its debut investment in Pienso, a software company spun out of the Massachusetts Institute of Technology. Pienso utilizes language models to assist businesses in recognizing trends in customer calls and survey responses. 

Memes and Other Things

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