Fintech giant Stripe’s valuation spikes to $65B in employee stock-sale deal

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Stripe logo displayed on a smartphone screen.

Image Credits: SOPA Images / Contributor / Getty Images

Payments infrastructure giant Stripe said today it has inked deals with investors to provide liquidity to current and former employees through a tender offer at a $65 billion valuation.

Notably, the valuation represents a 30% increase compared to what Stripe was valued at last March when it raised $6.5 billion in Series I funding at a $50 billion valuation. But it is also still lower than the $95 billion valuation achieved in March of 2021.

While Stripe declined to comment beyond a written statement, a source familiar with the internal happenings in the company told TechCrunch that Stripe and some of its investors agreed to purchase over $1 billion of current and former Stripe employees’ shares.

The company, which counts the likes of Alaska Airlines, Best Buy, Lotus Cars, Microsoft, Uber and Zara as customers, had noted at the time of its last raise that the proceeds would go to “provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards.” That, it added, would result in the retirement of Stripe shares that would offset the issuance of new shares to Series I investors.

A Stripe IPO has been long anticipated and was widely expected to happen in 2024. But with this deal, it appears that an initial public offering may not take place until next year.

In January, TC’s Rebecca Szkutak reported that — in anticipation of that IPO and according to secondary data tracker Caplight — there had been “an absolute flurry of buyers looking to get shares in the company in recent months.” On January 2, a secondary sale closed that valued Stripe shares at $21.06 apiece and valued the startup at $53.65 billion, according to Caplight data.

While Stripe did not name the investors participating in the latest deal, Sequoia Capital Managing Partner Roelof Botha was quoted in Stripe’s announcement and The Wall Street Journal cited Goldman Sachs’s growth equity fund as another backer.

The WSJ also reported that the transaction “is part of a commitment by the Collison brothers to provide liquidity annually to longtime and former employees.” Sources familiar with internal happenings at the company said that commitment is more to provide liquidity “regularly,” and not necessarily annually.

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2-year-old LatAm fintech Yuno reaches $150M valuation with backing from DST Global Partners, Tiger, a16z

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Digitally generated image of multicolored credit cards

Image Credits: Eugene Mymrin / Getty Images

A couple of years ago, payments orchestration was a foreign term to many large companies Juan Pablo Ortega would speak to. Today, the Yuno co-founder and CEO doesn’t have to do as much explaining.

“The perception has changed dramatically,” Ortega told TechCrunch. “Many large companies are now well aware of what payment orchestration is, and actually a few of them are starting to do requests for proposals just for orchestration.”

Those multinational companies typically use half a dozen payment providers, acquirers and banks to cover their needs worldwide, but Yuno says they only need one global payments orchestration provider. Payments orchestration is a way to integrate all of those payment providers and financial institutions into a single layer to replace the individual services tech global companies already use to facilitate each payment conversion.  The company launched its product in October 2022 to provide a wide array of payment methods — over 300, actually — with fraud-detection capabilities, one-click checkout and advanced smart routing technology.

TechCrunch covered the Colombian payments startup when it was newly formed and raised $10 million from some heavy-hitter investors, including Andreessen Horowitz. Today, Yuno has facilitated transactions in over 40 countries worldwide and is working with enterprise clients like McDonald’s, Rappi, Avianca and inDrive.

Yuno, payments orchestration, Latin America
Yuno’s payments dashboard. Image Credits: Yuno

The global payments orchestration market is forecasted to reach nearly $7 billion in value by 2032. In Latin America, in particular, merchants trying to cater to customers in other countries have to figure out how to collect different currencies and from customers who don’t have credit cards.

The potential opportunity has attracted companies all over the world that hope to grab a piece of that pie, like Gr4vy, Plug and Revio. Similar to Yuno grabbing capital from top investors, Simetrik, also based in Colombia, is developing a payments infrastructure and is now backed by Goldman Sachs.

Many of Yuno’s competitors focus on solving payment orchestration for small and medium businesses, and not many were building the infrastructure for large enterprises, Ortega says.

“We are one of the few orchestrators that actually have integrations around the world,” Ortega said. “Today we have more than 150 integrations that enable companies to access payment methods that require payment processors in all the different continents.”

With founders hailing from Colombian unicorn Rappi, payments startup Yuno raises $10M from a16z and LatAm VCs

In the past year, Yuno caught the eye of leading investment company DST Global Partners, which put together a recent $25 million Series A injection into the company. DST was joined by Andreessen Horowitz, Tiger Global, Kaszek Ventures and Monashees. That new round of capital gives Yuno a valuation of $150 million, Ortega said.

The funding will be used to solidify Yuno’s presence in Asia, Europe and Africa and also to keep investing in building its payment infrastructure orchestration platform.

“We are going to keep building our sales, product and technology teams through much of the first quarter,” Ortega said. “In addition to Latin America, we also have offices in New York and Singapore, so having more presence in those markets will be key for this year.”

For LatAm payment orchestration startups, market fragmentation is a blessing in disguise

Baron boosts Swiggy valuation to $12.16B, above prior private market value

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A swiggy delivery boy can be seen in front of a food outlet

Image Credits: Indranil Aditya / NurPhoto / Getty Images

Baron Capital, an investor in Indian food delivery startup Swiggy, has increased the value of its stake in the Indian firm, implying a valuation of $12.16 billion, surpassing the $10.7 billion post-money valuation at which Swiggy secured funding in early 2022.

New York-based Baron Capital disclosed in new fillings (PDF) that it has marked up the value of its stake in Bengaluru-based Swiggy to $87.2 million, an increase from its original investment of $76.7 million in the food delivery platform.

The valuation uptick at the end of December is a noteworthy development for Swiggy and, more broadly, the Indian startup ecosystem. This is particularly significant given that Swiggy’s valuation had previously been marked down to a low of $5.5 billion.

Swiggy commands roughly 45% market share in the Indian food delivery sector and is “well positioned to benefit from structural growth in online food delivery in India,” Baron Capital wrote (PDF) in a separate filing.

It added: “We believe India’s food delivery industry is still in its infancy and will continue to scale over the next several years thanks to a growing middle class, rising disposable income, higher smartphone penetration and structural shifts in consumer preferences driven by a tech-savvy, younger population. The industry has also become a duopoly between Swiggy and Zomato, which bodes well for the future profitability and scale of the company.”

Swiggy reported last year that it had pared its expenses and its food delivery business had turned profitable, a feat it has maintained since. The startup plans to file for an IPO later this year.

Shares of Zomato, Swiggy’s chief rival, have surged in the past six months as the Gurgaon-headquartered firm improves its finances. Zomato had a market cap of about $17 billion.

Swiggy, which is also a key player in the instant-grocery delivery space in India, is increasingly broadening its offerings. Swiggy — which counts Prosus Ventures, Accel and SoftBank among its backers — is expanding into consumer electronics and other categories, targeting a larger share of the e-commerce market by offering 20-minute delivery for all purchases.

Walmart-backed Flipkart, which leads e-commerce in India, in the meantime, is planning to enter the instant-delivery space, TechCrunch reported Thursday.

Applied Intuition's ADAS sensor software

Applied Intuition lands $6B valuation for AI-powered autonomous vehicle software

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Applied Intuition's ADAS sensor software

Image Credits: Applied Intuition

Autonomous vehicle software company Applied Intuition has raised $250 million in a round that values the startup at $6 billion, as it pushes to bring more artificial intelligence to the automotive, defense, construction and agriculture sectors.

The eye-popping funding round is the latest example of investor fervor for AI. Applied Intuition appears to have nailed a particular sweet spot for VCs who are on the hunt for startups with AI products that cross into large industries with big budgets — defense being one hot area — with seemingly endless opportunities.

The Series E round was led by Lux Capital’s Bilal Zuberi, investor Elad Gil, and Porsche Investments Management, the sports car maker’s independent venture arm. Others joining the round were Andreessen Horowitz, Mary Meeker’s growth fund Bond, and even Formula 1 world champion Nico Rosberg. Lux Capital, Elad Gil, and Andreessen Horowitz all previously led funding rounds for Applied Intuition.

The fresh capital — all equity — will go toward funding “the most ambitious projects that we have, without flooding the company and breaking our culture,” co-founder and CEO Qasar Younis told TechCrunch in an interview.

Founded in 2017, Applied Intuition creates software that automakers and others use to develop autonomous vehicle solutions. Some of that work involves creating simulations that let customers test and re-test their perception and vehicle behavior systems, or helping them manage the reams of data involved in developing AVs.

“When they think like, ‘I have this software or AI problem,’ we generally want them to think about us,” Younis said. “Like we want to be that first call.”

That approach appears to be succeeding: The company claims to work with “18 of the top 20 automakers,” including General Motors (where Younis used to work before stints at Google and Y Combinator), Toyota and Volkswagen, as well as autonomous vehicle startups like Gatik, Motional and Kodiak. The company also has a contract with the Army and Defense Innovation Unit.

Peter Ludwig, co-founder and CTO, told TechCrunch he thinks it’s “dangerous for an automaker to not partner with us in some ways because of just the sheer complexity and the impact that some of the technology we’re working on.”

The new funding round comes at a time when development of autonomous vehicles is facing renewed scrutiny, with GM-owned Cruise mired in multiple investigations surrounding a pedestrian crash late last year, Waymo’s first-ever software recall (and a recent minor crash with a cyclist), layoffs and other changes to the scope of some of the most ambitious projects in the space.

The appetite for artificial intelligence, however, could not be more ascendant. Younis, in a statement, said that building more AI technology into its products will “exponentially accelerate the production of next-generation vehicles.”

That could mean a number of things, Younis told TechCrunch, like using AI to help generate more dynamic simulated environments for companies to test their autonomous vehicles in. “Simulators, they’re extremely complex,” he said. “We have teams and teams of PhDs that are just sweating over this stuff all day long.” Applied Intuition will be working with some of the buzzier technologies like large language models, Younis said, and “more speculative stuff that’s approaching more of the research domain.”

“If you had a world-class AI team pointed toward all the problems in automotive, there’s plenty of low-hanging fruit,” Younis said.

Sachin Bansal's fintech Navi seeks $2B valuation in its first major external fundraise

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Image Credits: MONEY SHARMA / AFP / Getty Images

Flipkart co-founder Sachin Bansal is in talks to raise capital for his new startup, Indian fintech Navi. Bansal is talking to investors to raise at a valuation of around $2 billion, three sources familiar with the matter told TechCrunch. One source said he is looking to raise between $200 million and $400 million.

Bansal has largely self-funded Navi up to now, and this would be the Bengaluru-headquartered startup’s first large outside fundraise since it was founded in 2018.

Talks have yet to materialize into a deal, so the terms, as well as Bansal’s appetite for outside funding, may change, the sources cautioned. A Navi spokesperson declined to comment.

Navi, which offers personal and home loans as well as health insurance to customers, has been through a few financial twists and turns. Navi originally wanted to raise $440 million in a public listing, according to paperwork it filed in 2022. With the IPO market in a slump, however, the startup abandoned those plans last year.

The funding deliberations point to a significant shift in the venture market in India and are an encouraging sign for fintech more globally. After a particularly rough 2023 in which overall startup funding fell 73% in the country, this could be a signal that growth-stage funding rounds are back on the table.

Abu Dhabi’s sovereign wealth fund ADIA is in talks to back Indian audio-storytelling platform Pocket FM, TechCrunch reported last month. Indian eyewear brand Lenskart, Temasek-backed consumer nutrition platform HealthKart, and bike-taxi aggregator Rapido are also in talks to raise new growth-stage rounds, Indian outlet Economic Times reported Thursday. Khazanah, Malaysia’s sovereign wealth fund, is among investors that Swiggy-backed Rapido has engaged with in recent weeks, one source familiar with the matter told TechCrunch. 

India’s startup ecosystem saw a steep decline in large funding rounds last year as global investors, including Tiger Global and SoftBank, reduced their investments, while domestic VC firms shifted their focus to early-stage companies, according to a recent Bain report.

The Reserve Bank of India’s regulatory actions in recent years have also impacted startups issuing cards and lending, further spooking many investors in the fintech sector.

Under Bansal, Flipkart was a trailblazer for startups in India, raising billions of dollars from a storied list of strategic and financial investors. He then left the startup in 2018 with a $1 billion windfall and opted for a bootstrapped approach for Navi, which he founded the same year.

Even if this might become Navi’s first external raise, that doesn’t mean Bansal has not been talking to interested parties. As TechCrunch previously reported, the fintech spoke to potential investors, including SoftBank, ahead of its IPO filing. Those discussions stalled after Navi’s application for a banking license was rejected by the country’s central bank, TechCrunch previously reported.

In recent quarters, Navi has narrowed its focus. It sold its microfinancing unit Chaitanya India for $178.5 million in August as part of a “strategic plan to focus on our digital-first businesses,” Bansal said at the time.

In an interview published by the Indian outlet Moneycontrol on Tuesday, Bansal said he would revive plans for the IPO, but only in a “few months, once we are ready.”

Bansal has also not given up the idea of turning Navi into a bank. “For now, I would say we have parked them, until we see that it is a possibility again in the future,” he told the Indian outlet. “Then we will pick up again when there’s some green light from the regulator at the right time.”

pool in backyard of Guesty property

Guesty snaps up $130M at $900M valuation to help property managers list on Airbnb and beyond

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pool in backyard of Guesty property

Image Credits: Guesty (opens in a new window) under a license.

Travel and tourism are very much back on the map for consumers and the business world. Now, to underscore that surge, one of the startups building software in the space has closed a big round of funding. Guesty, a platform that lets accommodation managers manage their business online, including on platforms like Airbnb and Vrbo, has raised $130 million.

Sources confirmed to TechCrunch that the Series F values Guesty at around $900 million post-money.

The company, based out of New York with roots in Israel, says its revenue has increased 5x in the last three years, and it expects to turn profitable this year. The company did not specify actual revenue figures.

KKR is leading this round, with Apax Funds, Inovia, BDT & MSD Partners and Sixth Street also participating.

To put the funding into some context: Post-COVID, the global travel and tourism sector has been on a strong rebound, and is expected to generate record-high sales of $11.1 trillion in 2024, according to the World Tourism and Travel Council. That would be despite tourism in the U.S. and China still catching up to pre-pandemic levels.

For Guesty and its competitors, this upswing has played out in the form of a number of nine-figure funding rounds. Guesty last raised a Series E of $170 million that valued it at $690 million in August 2022. Guesty’s close competitor, Hostaway, raised $175 million last May, marking its first big funding round. Within a day of that news, GetYourGuide raised a monster $194 million at a $2 billion valuation.

Mews, which like Guesty builds SaaS but for hoteliers, raised $110 million at a $1.2 billion valuation in March. This trend is a strong reminder that investors are still willing to sign term sheets in the right circumstances.

“It’s definitely a tough market. In every round I’ve raised, I would always get 40 no’s for every yes,” Amiad Soto, Guesty’s CEO, told TechCrunch. Now, with Guesty “closing in on becoming profitable this year,” he joked that “I still got 40 no’s, but also a lot more yes’s.”

Soto, who co-founded Guesty with his brother Koby (who is no longer with the company), plans to deploy the funding across a few different areas.

First of all, the company wants to continue expanding its existing platform for current customers. That business today already covers “hundreds of thousands” of properties, and it will double down on the one-stop-shop concept that a lot of other B2B tech companies are pursuing today, Soto said. He declined several times to give me a more specific figure on the number of properties its platform covers.

The platform provides the basics of listing and booking management software, analytics, accounting tools, the ability to manage multiple properties and CRM features. More recently, it added enhanced payment services and capital advances (built in-house, not white-labeled from third parties, Soto said), damage protection services (dipping into the area of insurance), website building tools and price optimization services that all integrate with the dozens of interfaces where a property manager might list a room or home for travelers to book.

Second of all, the main focus to date for Guesty has been short-term lets — properties booked typically for less than a month — but the company now wants to expand into the medium-term space. This will open it up to more people who might be living temporarily in a location for a specific work assignment, for example.

Third of all, Soto said Guesty wants to consider more acquisitions. The market may not be looking favorable for all startups right now, but that is less a comment on the strength of startups (talent and innovations) than it is on the state of venture capital right now. There are a lot of very interesting companies out there that might be ready to entertain acquisition offers that provide less bullish valuations.

Stephen Shanley, partner and head of Europe Tech Growth at KKR; Lauriane Requena, a principal at KKR Tech Growth; and Dennis Kavelman, a partner at Inovia Capital, are all joining the board with this round. “Guesty is a best-in-class operator and one of the clear leaders in the property management sector,” Shanley said in a statement. “There has been a significant shift towards the short-term rental market, and this investment will support the company as it continues to meet that growing customer need.”

hand holding smartphone displaying sharechat

ShareChat's valuation drops below $2B after new funding round

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hand holding smartphone displaying sharechat

Image Credits: ShareChat

Social media startup ShareChat’s valuation has fallen to $2 billion from nearly $5 billion following a new funding round, a source familiar with the situation told TechCrunch, marking a steep decline for the nine-year-old Indian startup that boasts over 400 million users in the South Asian market.

The Bengaluru-based startup, which operates a popular social network supporting a dozen Indian languages and a short-form video app, said on Monday that it had raised $49 million in a convertible round. It did not disclose the valuation at which the funds were raised, but strongly denied that its new valuation was below $2 billion, asserting there was “no valuation” attached to the round.

Existing investors, including Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures and HarbourVest, contributed to the new round, the startup said. Their debt will convert to equity at a valuation below $2 billion in the next round, according to a source with direct knowledge of the terms who requested anonymity to speak candidly. TechCrunch reported in December that ShareChat was facing a steep valuation cut.

ShareChat also counts Google, X, Snap, Tiger Global and Tencent among its backers. It has raised about $1.3 billion to date. The company was valued at $4.9 billion in a funding round it raised in mid-2022.

The markdown comes despite a remarkably positive year for ShareChat, which had aggressively cut expenses and doubled its revenue. “When the market turned, we had to temper [acquisitions and creator payments] and move towards more profitable growth,” Ankush Sachdeva, ShareChat’s co-founder and chief executive, told TechCrunch in an interview.

ShareChat has not spent money on user acquisition in the past year, Sachdeva said, crediting improvements to the startup’s content recommendation engine for driving user retention and engagement. The company has also invested heavily in AI talent, particularly for senior roles in its London-based team, and has doubled the ESOP grant for each employee in the firm as part of a special bonus grant.

In addition, Sachdeva said the company has been able to pare down its single largest expense — the cost of serving content. “When you fetch content on one of our apps, we do a lot of computation to find the 10 best content. To serve and consume that, there is another delivery cost. Optimizing this has helped us lower our burn,” he said.

ShareChat has reduced its monthly cash burn by 90% over the past two years while doubling revenue, attracting large FMCG firms and gaming companies as advertisers, the CEO said. The startup also remains committed to the short-video market in India, despite strong competition from YouTube and Instagram following the country’s ban on TikTok in 2020, he added.

“In terms of traffic, ours is lower than those of Instagram and YouTube, but we are the largest in terms of a stand-alone app,” said Sachdeva. He believes ShareChat’s focus on live-streaming as a destination for entertainment and creator-user connections will differentiate it from its U.S. rivals. In 2022, the startup acquired local rival MX TakaTak in a deal valued at over $700 million.

Wiz raises $1B at a $12B valuation to expand its cloud security platform through acquisitions

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Wiz Founders

Image Credits: Avishag Shaar-Yashuv / Wiz (opens in a new window) under a CC BY 2.0 (opens in a new window) license.

Wiz, the buzzy startup building an all-in-one cloud security platform, is on an acquisition march to expand its business quickly en route to an IPO.

Now, it has closed a major round of funding of $1 billion to help on that march.

The Series E — co-led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive — values Wiz at $12 billion, making it one of the most highly valued startups in cybersecurity today.

It’s a notable step up from the last time Wiz raised, in February 2023, when it closed a $300 million round at $10.3 billion post-money. When rumors of this latest fundraise circulated in the market in March, the amount was pegged at $800 million. The fact that the Series E is now at $1 billion speaks to how heated activity is around Wiz right now. “Iconic” was the word one investor, speaking to TechCrunch, used to describe the company.

(The company confirmed that the Series E also has a small secondary component. Sources close to the deal say it is around $30 million to $40 million, “a few dozens millions of dollars.”)

Assaf Rappaport, Wiz’s co-founder and CEO, said in an interview that Wiz plans to continue growing its platform organically with more talent hires and R&D investment. But with countless cybersecurity startups now in existence, the New York startup sees a prime opportunity to acquire to grow inorganically through acquisitions, bringing customers, talent and technology into the fold more quickly.

“We see two kinds of opportunities in the market right now,” he said. “There are ex-unicorns” — startups that have raised substantial money at valuations exceeding $1 billion, but may have failed to grow as expected and are now exploring other options beyond IPO — “and also exciting, younger startups, superstars with a great trajectory ahead of them. We have an opportunity now to combine forces with both of these.”

The large size of this round gives Wiz a lot of room to make acquisitions in cash, which means giving up less equity in Wiz itself — a nod to the company’s public listing intentions in the future.

The fundraise is coming at a time when Wiz is already rolling up smaller companies. It was only a month ago that it acquired Gem Security — which Rappaport described today as falling into the latter “exciting, younger” category — for $350 million. Just weeks later, Wiz signed a letter of intent to buy Lacework, the startup once valued at $8.3 billion, for just $168 million. (That would make it an “ex-unicorn” in Rappaport’s terminology.) The latter deal went cold, we now understand, during due diligence, a reminder that simply having an interest and the money to buy are not enough to get deals over the line.

The firm has a long list of companies from which to pick. By one estimate there are 62 cybersecurity startups with last-raised valuations of over $1 billion right now. The list includes Aqua and Orca — which are not related to each other but do partner together — as well as Netskope, Snyk, Arctic Wolf, Axonius and many more. The smaller ones number in the hundreds. All these compete against much larger players in the market that include Palo Alto Networks, Crowd Strike and more.

Wiz was founded only four years ago by Rappaport and his co-founders Ami Luttwak, Yinon Costica and Roy Reznik (all previously at Microsoft, with startup building experience and exit success in their past). The company claims to have signed contracts with some 40% of the Fortune 100, with some of its biggest customers including BMW, Colgate-Palmolive, strategic investor Salesforce and Mars.

Together that business now amounts to $350 million ARR. That’s still a far cry from the $1 billion ARR it’s aiming to have by the end of 2025. However, that aim is one more reason the company is looking to grow by acquisition.

Wiz’s traction in the market is in part because of the area that it’s targeting, and in part because of its approach.

Enterprises have made significant investments into cloud services to speed up how they work and to make their IT more flexible, but that shift has come with a significantly changed security profile for those organizations: Network and data architectures are more complicated, and attack surfaces are larger, creating opportunities for malicious hackers to find ways to breach those systems.

Wiz has stood out in a crowded market by taking an all-in-one platform approach. Ingesting data from AWS, Azure, Google Cloud and other cloud environments, Wiz scans applications, data and network processes for security risk factors and provides a range of detailed views to its users to understand where those risks exist, and also how to fix them. Its platform currently covers some 13 areas, from code security, container environment security and supply chain security, and around that it integrates and partners with a number of other startups to build out it ecosystem (and malleability for customers).

Philip Clark, who is leading the investment for Thrive Capital, described AI as part of “the next wave of security problems,” and Wiz has also been expanding its activity there, specifically with AI security posture management.

“It’s meeting customers where their needs are,” Sarah Wang, a general partner at a16z, told TechCrunch. “There is nothing that competes directly with Wiz in the area of cloud security.”

In the meantime, more opportunities abound. When I talked to Rappaport on Monday for this story, he’d just landed in San Francisco to attend the RSA security conference, where there will be nearly 600 companies exhibiting: a ripe opportunity to do some shopping.

The funding — which also saw participation from Greylock and Wellington Management, as well as previous backers Cyberstarts, Greenoaks, Howard Schultz, Index Ventures, Salesforce Ventures and Sequoia Capital — brings the total raised by Wiz to $1.9 billion.

That long list of big-name backers, added to the list Rappaport said it rejected, underscores the investor interest in the company at the moment.

“Wiz is nothing short of a rocket ship,” another investor, Arsham Memarzadeh of Lightspeed, said in a statement.

Sources: Mistral AI raising at a $6B valuation, SoftBank 'not in' but DST is

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Mistral team photo

Image Credits: mistral.ai

Paris-based Mistral AI, a startup working on open source large language models — the building block for generative AI services — has been raising money at a $6 billion valuation, three times its valuation in December, to compete more keenly against the likes of OpenAI and Anthropic, TechCrunch has learned from multiple sources. We understand from close sources that DST, along with General Catalyst and Lightspeed Venture Partners, are all looking to be a part of this round.

DST — a heavyweight investor led by Yuri Milner that has been a notable backer of some of the biggest names in technology, including Facebook, Twitter, Snapchat, Spotify, WhatsApp, Alibaba and ByteDance — is a new name that has not been previously reported; GC and LSVP are both previous backers and their names were reported earlier today also by WSJ. The round is set to be around, but less than, $600 million, sources told TechCrunch.

We can also confirm that one firm that has been mentioned a number of times — SoftBank — is not in the deal at the moment.

“SoftBank is not in the frame,” a person close to SoftBank told TechCrunch. That also lines up with what our sources have been telling us since March, when this round first opened up, although it seems that not everyone is on the same page: Multiple reports had linked SoftBank to a Mistral investment since then.

Mistral’s round is based on a lot of inbound interest, sources tell us, and it has been in the works since March or possibly earlier, mere months after Mistral closed a $415 million round at a $2 billion valuation.

Mistral, per PitchBook data, has some 36 current investors, with the list also including the likes of Andreessen Horowitz (which led that Series A in December), Redpoint, Headline, New Wave, Emerson Collective, French banking giants bpifrance and BNP Paribas, as well as a number of strategic backers including Databricks, Nvidia, Salesforce, Snowflake and most recently OpenAI’s biggest backer, Microsoft.

This latest fundraise has been the subject of a lot of speculation in the last few months (see here, here and here), but it’s been a moving target, with the investors, round size and valuation all changing. Some investors have looked and walked away, possibly due to the price.

“We love the company, and we love Arthur,” one prominent investor told me this week referring to Arthur Mensch, the CEO and co-founder. “We love how fast they’re moving, but we’re not talking.”

Mistral, unlike some of the other LLM builders like OpenAI and Anthropic, is focused on taking an open source approach to its work. It’s one of the youngest of the LLM players in the market, and notable also for being a major effort to come out of Europe (a “European champion,” as it’s sometimes called). Its French roots also tap into Paris as a notable hub for AI R&D, with Meta, Hugging Face, Photoroom, Nabla and many others building there.

What’s significant about Mistral AI raising at a $6 billion valuation (post money, sources have confirmed) is that the valuation has gone up from a $5 billion target in a matter of weeks.

Since Mistral launched its first LLM in September 2023, it has released two more. But it has not disclosed how many users it has nor what its revenues are looking like (it offers a range of prices to access its APIs, with pricing plans covering tokens for the three models it’s released to date, plus some customizations that Mistral has built).

All of this is to say that for now it’s not clear how closely investor interest is anchored to current business funnels versus hopeful projections for the future.

That points to a very heated market for the startup and for AI in general — despite the exit challenges that scaled-up, privately held technology companies are facing.

SoftBank side step

It is true that SoftBank is very keen to get into more AI deals, even if it’s not investing in Mistral (not now, anyway). On the back of a turnaround strong performance for the Vision Fund earlier this year, the firm is spinning up more AI activity. That has included slapping down hundreds of millions of dollars to lead a $1 billion funding round for Wayve earlier this week.

And sources close to Graphcore have confirmed to TechCrunch that SoftBank is indeed looking at possibly buying the troubled U.K. AI chip designer, too — confirming other reports from the last several months.

Graphcore’s backstory is one of AI clouds rather than silver linings and is emblematic of some of the problems that some later-stage startups are seeing right now. The chip design company spotted the opportunity for more efficient AI chips early on, and with some interesting IP in hand, it raised hundreds of millions of dollars over the years from investors like Sequoia, Microsoft, Dell Technologies and individuals like Greg Brockman and Ilya Sutskever of OpenAI, among many others.

But it’s in a market entirely dominated in sales and mindshare by a major player, Nvidia. Graphcore’s last fundraise, at a $2.8 billion valuation, was now more than three years ago, and it’s been inching closer to the end of its runway. That’s led to a lot of speculation about it selling for considerably less than that amount, potentially for as little as between $500 million and $600 million. We understand the startup has had better than expected revenues in the last several months, however, which has both extended its runway and possibly given it more options.

SoftBank would have also talked to Graphcore about investing, we understand from our source, so that might also be one outcome. “Stretching it” is how one investor described the rumors that SoftBank was anywhere close to a deal one way or the other.

But SoftBank does have a special place in its heart for chips. It still owns a giant chunk of Arm, and the firm has been working on a $100 billion fund just for AI chips alone. That spans more than just software: The company is indeed looking at getting involved with Graphcore, a U.K.-based AI chip designer.

Mistral declined to comment for this story. DST and General Catalyst have not responded to requests for comment. LightSpeed declined to comment on speculation. We’ll update as we learn more.

Restaurant365 orders in $175M at $1B+ valuation to supersize its food service software stack 

by with No Comment Tech

Friends having home party with vegan food

Image Credits: kyotokushige / Getty Images

The U.S. restaurant industry is expected to pass $1 trillion in sales for the first time this year, despite wider economic pressures on consumers. Now Restaurant365, a startup building tech to manage those businesses, has raised a hot $175 million to capitalize on that growth. 

The funding is being led by ICONIQ Growth, with KKR and L Catterton also participating, all existing backers of the company. Restaurant365 is not disclosing the valuation it received in the round, but Tony Smith, its co-founder and CEO, confirmed to TechCrunch that it is an up round.

“We’re excited that [the business] continues to grow and that we have very supportive investors behind us,” he said. For context, last year, when the startup raised $135 million, it disclosed that it had passed a $1 billion valuation. 

The startup is also not disclosing any new usage figures. Last year, we reported that its software was being used in 40,000 locations, and that is still the number it is sharing today. The company was reportedly set to generate revenue of $100 million in 2023, based on per-location pricing that starts from $469 per location per month.

Based out of Irvine, California, Restaurant365 provides restaurants an all-in-one platform to manage their accounting, inventory and workforce, along with an analytics suite to help understand trends within the business — essentially everything except point of sale transactions.

Smith said the plan is to use the new money to continue expanding the startup’s suite of products, as well as its customer base following the acquisition of ExpandShare, a training platform for restaurants, in April. “We are also earmarking some funds for future acquisitions,” he added.

Although Restaurant365 is used by both independent restaurants and larger chains, Smith said another big focus will be building tools catering to “major hospitality brands.”

Unlike a lot of people who try to solve problems in industries they’re familiar with, Restaurant365’s founders have little to do with the world of food service. “By the time I graduated college, I’d had 12 jobs, [only] one of which was at a pizza restaurant. So I wouldn’t say my restaurant experience was robust,” Smith said. 

Rather, he was a techie who saw an opportunity to address an obvious problem. “My first job out of college was in technology, and it was exciting to see the future that software could play in all types of businesses.” 

He, along with John Moody (chief strategist) and Morgan Harris (chief community officer), founded the startup in 2011 to address a pretty sore problem for restaurateurs: They operate on very thin margins (one reason why so many restaurants eventually die), and they have to use a patchwork of software to get things done. 

The co-founders may not have known much about restaurants early on, but they knew they had to graft that knowledge in to fix the problem. “We immediately surrounded ourselves with restaurant folks to fully understand the problems they were facing,” Smith said. He said that included some unlikely going-native market research.  

“We’d go to restaurants and wait until they closed at night to talk with the manager, who must have been a little concerned we were stalking them,” he said. “I remember asking for a clipboard so I could count inventory with them, and they probably thought we were crazy, joining in their job for free. [But] it was shocking to learn how complex running a restaurant is — from the need to reduce food waste, control costs and manage labor.”

It did seem like a strong match, though. “The problems restaurants struggled to solve aligned perfectly with our skills, and when we looked at what was available on the market, we knew we could create a more complete solution to help restaurants thrive,” he said. “Restaurant people are so hardworking, and it’s a privilege to work with them and help solve those problems.”

That said, Restaurant365’s market is quite crowded with everything from point solutions to all-in-one approaches. Bigger players include Toast, Lightspeed and Crunchtime (no relation to TechCrunch!). 

Smith claims his startup is the only one bundling the functions that it does. Indeed, many of the other companies targeting the food service industry start with solutions for point of sale or workforce management, rather than the mix that Restaurant365 provides.

“Our major differentiators are that we’re all-in-one and restaurant-specific,” he added.

Will Griffith, a founding partner at investor ICONIQ Growth, said that the startup’s attack was the more attractive for how it brought together essential functions in a usable way. 

“Restaurant365’s suite consolidates essential functions like accounting, inventory management, payroll, and employee scheduling into a unified system,” he said in an emailed statement. “Whether enterprise brands are reducing spending or investing, they always need a seamless flow of information to quickly identify areas in need of improvement, be it in staffing or supply management, to consistently and dramatically reduce costs and improve profitability.”

Still, there is a big opportunity to consolidate given the huge number of point-solution players in the market. 

“When we started the company, we met countless restaurants struggling to get by with multiple disconnected systems that drove inefficiency and limited visibility,” Smith said. “We launched as a consolidated product, and we’re grateful that operators and the market at large validated that strategy in both trusting us with their business, and in demanding technology providers create more complete offerings.

“While we’ve made a number of acquisitions, we also invest heavily in our product development and research teams, and will continue to do so. For us, the question isn’t whether to add more products organically or through acquisitions. The question is what will add the most value to our customers’ businesses. Then we go out and do it,” he added.