It’s 2021 for AI while the rest of the startup market is stuck in 2024

Here's the rundown: The Q4 2023 earnings cycle will kick off this week with names like Intel and Visa reporting results. The largest tech companies will start to report next week. Crypto is not enjoying a post-ETF boom for reasons that are yet to be nailed down. Then again, when have crypto price movements ever made complete sense? ElevenLabs is the newest AI unicorn. With $80 million in fresh capital, the synthetic voice startup now has oodles of cash to try and run its market. Canva is big! Who knew? Elsewhere, Crunchbase News reports that cybersecurity fundraising fell again last year. Given the number of breaches in the market, that feels off, yeah? Developers and Apple Vision Pro are not seeing eye to eye. Perhaps Apple should work to rectify its developer relationships? And in closing, it turns out you can slow down TikTok. That's all for this morning, and we'll be back on Wednesday. Talk soon! For episode transcripts and more, head to Equity’s Simplecast website. Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews founders and more! Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products. Learn more about your ad choices. Visit megaphone.fm/adchoices

• 0:10Speaker 00

  Hello and welcome back to Equity, the TechCrunch podcast about the business of startups, where we unpack the numbers and the nuance behind the headlines. This is Alex. Good morning. Today is January 22, 2024. And on this Monday show, to get you ready for the week, we have the start of earnings season, crypto's fading ETF party, a new AI unicorn, Canvas upcoming massive secondary share sale, and falling cybersecurity fundraising amongst more. It's a packed show this morning. Let's go.

• 0:44Speaker 00

  Starting off as we always do on Monday mornings with a look at the world of money, and that means stocks. In Asia, shares are mixed today, though lower in China after the People's Bank of China held rates steady. Some folks want that bank to lower rates to stir economic activity, but lower rates would put even more pressure on the Chinese currency. Over in the EU, stocks are mostly higher today, and in the US, they are set to rise at the open, according to pre-market trading. On the earnings front this week, a couple of big names. Tuesday will bring us numbers from Netflix and Verizon. Wednesday, we'll hear from Tesla and IBM, and then Thursday

• 1:25Speaker 00

  brings us Visa, Intel, Nokia, and AppFolio. An apology, I misspoke last week. It's actually next week, when big tech earnings are really going to kick off, and we'll get a big taste of what the last quarter was like. Next up crypto, and let me say, man, the ETF party is a bust so far. I thought it very possible that after the Bitcoin spot ETFs were approved, we would see a nice rally in its value, and then a rally in sympathy from other tokens. Thus far, nope. Bitcoin is off 2% in the last day and 4% in the last week. Ether is off 4% in the last day and 6.5% in the last week, and Solana's token is off a little bit more than that.

• 2:10Speaker 00

  Today, you can almost get one whole Bitcoin for a flat $40,000, which I am sure fans of the cryptocurrency are not exactly stoked about. There is a reason, of course, why old Wall Street maxims like "Buy the rumors, sell the news" have endured for as long as they have. They often apply crypto or more traditional asset classes alike. We, of course, are still waiting for the Circle S1 filing and whatever happens in the current Coinbase versus SEC brouhaha.

• 2:42Speaker 00

  Next up, big news that matters. And today, I think the biggest news out is that 11 Labs, a startup that is developing AI-powered tools to create and edit synthetic voices, announced that it closed an $80 million Series B. Now, entries in Horowitz helped lead this round, but prior investors, including Sequoia Capital, Smash Capital, SV Angel, Broadlight Capital, and Credo Ventures also took part. The company has now raised just over $100 million, and thanks to the Series B, is now worth more than a billion, up from around $100 million last year. 11 Labs was founded in 2022. In case you were curious how fast the world of AI is moving,

• 3:25Speaker 00

  today it's 2021 in AI, while the rest of the startup market is stuck in 2024. A pity. Kyle Wiggers writes for TechCrunch that today 11 Labs is best known for its browser-based speech generation app that can create lifelike voices with adjustable toggles for intonation, emotion, cadence, and other key vocal characteristics. The startup is also working towards building a marketplace for voices, which is pretty important, I think, because it has the technology to use existing speech to train new models, which is very cool and also a little bit worrisome, given the potential for abuse and my concern that voice actors could wind up out of a job.

• 4:08Speaker 00

  I always find it very ironic that I, a person who has been told to speak more slowly and learn how to pronounce words, does so much podcasting. My only bit of safety when it comes to AI speech is that I write the show with my friend Theresa. But maybe in the future, that could also be done by AI. Hell, maybe equity one day could be entirely done by computers. At least for now, I get to keep doing the show. So 11 Labs, congrats on the Series B. Just don't put me out of a job.

• 4:38Speaker 00

  Next up, Canva is big. According to Bloomberg Graphic Design Software Company, Canva generated, quote, "more than $2 billion in annualized revenue in 2023," end quote. And the financial news comes on the heels of reporting that the company is planning a $1.5 billion secondary share sale at a $26 billion valuation. That's the same price set during a secondary trade back in August of 2023. Previously, Canva was valued at $40 billion, but that was back in 2021, when it raised $200 million at a $39.8 billion pre-money valuation. Most valuations have come down since 2021, and going from 40 to

• 5:22Speaker 00

  26 just isn't that bad. Canva is, of course, a company ripe for an IPO with those numbers. However, by clearing its decks with secondary sales, it's likely able to delay its IPO even further by relieving internal pressure for a real exit. For former employees, this is fine news. For you and I, it's a massive letdown. Give us the freaking F1 filing, Canva. We demand it.

• 5:51Speaker 00

  My former alma mater, Crunchbase News, reports that cybersecurity startups raised just one-third of their 2021-era haul last year. Chris Matinko writes that, quote, "Cybersecurity startups raised $8.2 billion in 692 venture capital deals last year, which was down from $16.3 billion across 941 deals in 2022, and $23 billion raised back in 2021." Now, cybersecurity is a bit of a puzzler. I wrote the other week that it seems very odd that during a time of what appears to be increasing breach frequency and the digital world becoming ever more important, we're seeing VCs pull back from the sector. So,

• 6:36Speaker 00

  one way you can think about this is that perhaps venture interest simply got ahead of the amount of capital that startups working on cybersecurity can actually ingest. yearly and that we are now back to a more stable and therefore healthy level of investment. If you want to be a bit of a jerk about it, you could say that, well, maybe startups simply aren't generating enough cool ideas and ways to tackle digital security to warrant the capital that they once raised. Regardless, I expect that we will see more cybersecurity unicorns in the coming years. It's just too important, the sector, to not generate at least some big winners.

• 7:16Speaker 00

  From the "that's a surprise" category, developers may not be super stoked about the Apple Vision Pro. That's the tech scuttle but you need to know this morning. Essentially, after Netflix decided to not support the face computer, yet at least, other well-known companies like Spotify and YouTube are also holding back from making apps. Mark Gurman argues that it might be due to Apple's currently fractious relationship with developers, which is a pretty reasonable call. Recall that Apple is fighting both tooth and nail to preserve a roughly 30% cut of developer revenue generated on iOS. Developers think that that is too rich a tax on their work, while Apple thinks that if you are

• 7:59Speaker 00

  using its platform and accessing its users, you had best pay up or go build for Android or, gasp, Linux. Here's an idea: what if we went back to being a web-first species instead of an app-first species? When the iPhone first came out, Apple hailed it as bringing, and I quote, "desktop-class email, web browsing, searching, and maps to a mobile package." That was a great idea. I think apps kind of suck. But I think that so long as they are more lucrative for Apple than the web, the company is going to hold fast to its biases. Still, developers flipping the new platform, the proverbial bird, really is an indictment for Apple, which used to be able to marshal

• 8:42Speaker 00

  the entire developer world to support its new platforms at the drop of a dime. And if you want more on the Vision Pro, its chances of success, and more, I have an interview brewing with a founder and former venture capitalist that I think you're going to love, so stay tuned for that in the coming weeks.

• 9:02Speaker 00

  Other things to know. TikTok's growth is slowing. TechCrunch reports, perhaps dinged by consumer reaction to the platform's e-commerce push. Turns out, short-form video is cool. Short-form videos that try to sell you things, perhaps less cool. Elsewhere, Lamborghini is working with some battery tech source from MIT that could be a super cool for the supercar company. And in the EU, consumers are going to be able to unlink their various meta-accounts. God, bring that to the US, please.

• 9:35Speaker 00

  And before we wrap, a quick reminder that we had Aileen Lee from Cowboy Ventures on the show last week, talking through her latest unicorn data dive. It was a lot of fun. It was a great time. I learned a lot. Hardly recommend that if you haven't heard it yet. And on the show this week, we will have Janay Tiere from Crunchbase, talking all about the end of 2023 from a venture capital perspective, and what's ahead this year. All right, now, if you want even more equity in the meantime, before we come back on Wednesday, we're EquityPod on both X and Threads. You can follow me, my name is Alex, over on X. We have two sister shows here at Equity, Chain Reaction, focused on all things crypto, and Found, which of course deals with founder stories.

• 10:19Speaker 00

  We'll talk to you soon. Hugs, bye. Equity is hosted by myself, editor-in-chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azvedo. We are produced by Teresa Locan Solo, with editing by Kel. Bryce Durbin is our illustrator, and a big thank you to the audience development team, and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.