Startups Weekly: Musk raises $6B for AI and the fintech dominoes are falling

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Welcome to Startups Weekly — Haje‘s weekly recap of everything you can’t miss from the world of startups. Sign up here to get it in your inbox every Friday.
In a twist that shocks absolutely no one and thrills pyromaniacs who love seeing money burn, Elon Musk’s newest venture, xAI, has snagged a casual $6 billion in funding. Valor, a16z, and Sequoia are stacking the money on the xAI-shaped roulette table, with Musk spinning the wheel.
Ivan ponders whether Musk’s latest market stab will finally bring us an AI so advanced, our puny human brains will be even more obsolete than they already are thanks to his other wild projects.
I think it’s completely bonkers. These investors seem to overflow with cash and are fresh out of skepticism. I can only imagine the pitch: “Picture an AI so powerful, it makes HAL 9000 look like a Roomba.” And, naturally, they threw money at it. Because, well … Honestly, I can’t see the logic.
What makes this particularly nuts is that the $6 billion bonanza is just the latest chapter in Musk’s epic saga of “how to get the world to fund my sci-fi fantasies.” The more stories that come out about Musk, the more you’d think people would start to hesitate before investing. But apparently, this is why I’m a newsletter writer and podcast host (we talked about this on Equity today as well) and not a VC. I’d think twice before betting on the guy who gave us self-driving cars that fail to spot fire trucks and spacecraft that sometimes land but also sometimes explode in a fiery spectacle.
Today is your last day to save up to $800 on your Disrupt pass. Book your early-bird pass by 11:59 p.m. PT tonight!
Welcome to the Wild, Wild West of fintech! Remember that bright shiny star called Synapse? Yeah, it supernova’d. The banking-as-a-service startup was a segment that seemed to be careening toward the stratosphere, and Synapse itself was backed by a16z — but that didn’t help any. The company collapsed faster than my New Year’s resolutions. With 10 million consumers now left in the lurch and many fintechs scrambling to pick up the pieces, it’s a full-blown catastrophe out there. It’s like “Game of Thrones” but with more spreadsheets and fewer dragons. If you thought your week was rough, spare a thought for those stuck trying to access their funds or save their jobs thanks to this mess. Buckle up — it will be a bumpy ride ahead for fintech!
Firefly, the cloud asset management startup that’s all about simplifying your digital chaos with “infrastructure as code,” has snagged $23 million in funding. This comes after an unimaginable tragedy — co-founder CTO Joseph “Sefi” Genis was killed by Hamas at a music festival. Despite this, Firefly’s team chose resilience over retreat and continued to grow their revenue fourfold in 2023. So basically, Firefly is now untangling cloud complexities and navigating through real-world turmoil like absolute champs.
Dreaming of tech IPO bonanzas in 2024? Well, wake up and smell the elevated interest rates! Despite Reddit, Astera Labs, Ibotta, and Rubrik managing to squeeze through the IPO door earlier this year, it looks like most startups are still stuck at home in their PJs. Plaid’s CEO declared they’re staying private for now, and Figma and Stripe are busy with tender offers like they’re hosting a bake sale instead of prepping for an IPO. Databricks raised $500 million but isn’t feeling the public market vibes either; maybe next year they’ll feel more extroverted. And Canva? They might take so long to go public that we’ll be designing newsletters directly from our brain implants by then. Stay tuned as TechCrunch continues to track which startups will brave the stock market runway or stay hidden behind their venture capital curtains!
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