OpenAI board member Bret Taylor has a new AI startup

Welcome to our Wednesday show, in which we talk through the week’s leading startup and venture capital news. Today we have an absolute pile of material, so let’s get to work: Bret Taylor’s new startup is turning heads: Known for his work at Facebook, Salesforce and OpenAI, Taylor’s new startup Sierra is building conversational AI agents. It has raised a mountain of capital to date, which it might need given that it’s not alone in its niche. FlowFi’s counter-cultural decision: FlowFi is building software to help startups keep their books more intelligently. But it’s not going to try and replace human inputs into financial work. Instead, it’s pairing its software with a labor marketplace so that startups can blend human and computer intelligence. If this means more GAAP accounting for startups, we’re here for it. Bold and Antithesis snag new capital: Bold raised $50 million for its Latin American fintech business, in good news for the sector and region that once went together like peanut butter and honey. Meanwhile Antithesis raised $47 million for its software testing service. Homebrew up, Foundry out: Homebrew is putting together an interesting new $50 million fund, while Foundry has announced that after its current, $500 million fund, it’s out of the game. We also talked mushrooms — it’s PG-13, I promise — and Earlybird Health’s latest fund. 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, where we unpack the numbers and the nuance behind the headlines. Today is February 14th, 2024. Happy Valentine's Day. I hope you're going to eat some chocolate and chill on the couch because you deserve it. But this is Alex and this is our Wednesday show where we dig into the critical startup and venture capital stories from the week thus far. On the pod today, an absolute killer list of stuff. I can't wait to talk about this. We're going to start with Bret Taylor's new startup, Sierra. Why FlowFi wants to combine people and tech. Then we have venture capital rounds from Bold and Antithesis. And we'll close our startup coverage by asking why everyone wants me to eat more mushrooms.

• 0:52Speaker 00

  Then in the venture corner, we have news from Homebrew, Foundry, and the latest from Europe. Let's go.

• 1:01Speaker 00

  So to kick off our startup coverage today, I want to talk about someone who may be best known for his work in big tech. That's Bret Taylor. He's the former Google Maps dude. He founded FriendFeed and then became Facebook CTO. Then he founded Quip and then became Salesforce's co-CEO. And he's a former board member over at Twitter and currently sits on the board of OpenAI. And he's building a new company called Sierra. So what is Sierra up to? Well, it's building conversational AI agents, essentially bits of artificial intelligence that do stuff for end users like ask questions or update their account. And the AI agent space is busy, but Sierra has already raised $110 million and put a product out in the market.

• 1:46Speaker 00

  So it seems that with lots of capital, early customers, and probably even some early revenue, Sierra is making a play that's well backed to dominate a growing software niche. But it's doing the work in more of a hands-on way than I expected. It's creating software tools for its customers instead of just offering them a big bag of things to put together on their own. The joke here is that if you want to raise money today... Build an AI startup. But if you really want to raise money today, well, build an AI startup while also sitting on the board of OpenAI. Fortune reports that Sierra is using both closed, aka OpenAI, and open source AI models that it chains together to avoid hallucinations and help its AI agents actually

• 2:30Speaker 00

  execute tasks for its customers. Chained LLMs, that could be a trend.

• 2:36Speaker 00

  Moving along, FlowFi. I think this is an absolutely fascinating startup. So it just raised $9 million from Bloomberg Capital, but the way that it's going after its market, startup financial management, really has me sitting up. So today, there's a big push to use AI to do as much of what humans can do as possible as quickly as possible. The logic here is pretty simple. Computer agents are far cheaper than human laborers, so swapping out the latter for the former just makes sense from a business perspective. However, FlowFi is building a software suite for startup finances, but is pairing it with a marketplace of real humans who help its customers with their books.

• 3:17Speaker 00

  So it's building software plus humans instead of software with more AI. And frankly, in this case, I get it. You don't want your CFO to be a bot. You want someone who is grizzled, experienced, and can give you that well-known CFO stare when you make a silly mistake or spend too much money on your business trip dinners. So the company offers accounting help, a CFO-like service, and tax prep assistance, just with software and humans at the helm. Very cool, but let's see how it scales. And there was so, so, so much more this week. I've had to condense a couple of things, but I want to get to more companies. So let's start with Bold. It just raised $50 million and it's working on payments in Latin America.

• 3:59Speaker 00

  So this is a big fintech round in a region that was once absolutely bonkers for fintech. And given the venture pullback we've seen in Latin America and in fintech more generally, it's cool to see Bold raise money for this project where it currently is. Bold is a welcome ray of light then for a lot of other Latin American fintechs that are hoping to raise more capital themselves. And if you recall last Friday's show, we talked a lot about how Latin American startups are more efficient by several key metrics than those in other regions. So perhaps VCs here are seeing that and putting their checkbook to work where it might have the most impact. Next up is a company called Antithesis. It just raised $47 million for its automated software testing service.

• 4:43Speaker 00

  And I've picked this one because I think it's pretty cool. The reason is everyone agrees that software is the future of the world. But actually making written code that is safe and secure and stable is no easy task. You can kind of compare this to writing and editing. You need both to have a good final product. So Antithesis is building a bunch of tools to help make code run very good. If I can put it that way. Clearly, it does have a lot of competition, especially in the world of startups. But I don't think you snag this much capital in today's market if your numbers aren't top notch. So Antithesis, one to watch.

• 5:21Speaker 00

  And then to close out our startup coverage, why does everyone want me to eat mushrooms? It's actually getting kind of weird. This time it's a startup called Space Goods, all one word. It's a London based wellness brand that wants to use mushrooms and nootropics to create a line of powder blends. Techworm says that it claims will enhance my energy, relaxation and mood. To which I can just say, sure. While other startups are using mushrooms to make fake leather, protein focused foods and energy drinks. Apparently mushrooms can do everything. And that does mean that the folks who wrote the expanse were right. I guess we should all be on the lookout for bottles of mushroom whiskey, which must be on the way.

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  Moving from startups to venture capital, our first VC story of the morning is that Homebrew is targeting $50 million for a new fund. So venture capital firm Homebrew, you've probably heard of it. We've had some of the folks from there on the show in time, is putting together $50 million for a new fund, according to an SEC filing. And this filing actually comes as a bit of a surprise because Homebrew said nearly two years ago that it was pursuing a more stage agnostic and evergreen model that would be funded solely by its partners, Satya Patel and Hunter Walk. So what to make of this? I have a couple of ideas. It could be an opportunity fund perhaps, or maybe a very tail. Vehicle for larger follow on investments in prior deals.

• 6:49Speaker 00

  If Homebrew can self fund, its prior funds have done very well. So people might want to co invest with it a bit, even if its main funds will now be sourced internally. Anyways, can you imagine the LP meetings of a fund that is entirely backed by its own general partners? It would go like, hello and good morning. How did we do this quarter? Great. Okay, meeting adjourned. But if Homebrew is reloading, Foundry Group is walking away. Foundry is an 18 year old venture capital firm with nearly $3.5 billion in assets under management, and it has quietly decided to shut down and not raise any more funds.

• 7:30Speaker 00

  And this move took TechCrunch by surprise because the firm announced a $500 million fund last year. So over the years, Foundry has invested in more than 200 companies and 50 venture capital firms, and that's according to its co founder and partner Seth Levine. In terms of names that you know, Foundry has backed companies like Fitbit and Zynga. But in a post, Levine wrote that, and I quote, "While VC firms rarely make decisions like this, it's precisely what we planned to do when we started Foundry back in 2006. From our founding, we intentionally decided not to build a legacy or generational firm." In a way, this feels kind of refreshing. Do something for a while, make a lot of money, and then move on.

• 8:15Speaker 00

  It feels oddly clean, especially because we have seen at other venture capital firms, a major generational shift or handover can get messy. But don't worry, Foundry still has money to invest from its last fund. It's just not going to raise another. And to close us out, our own Anna Heim reports that Germany based Early Bird Health has put together the final close of its second fund, which is going to be worth 173 million euro or about 185 million US. This is actually more than twice the size of Early Bird's first healthcare focused fund, which it very creatively named Health One, and was worth about $85 million at its own. Final closing. So while both funds are similar in both thesis and stage,

• 9:00Speaker 00

  the larger newer fund will enable Early Bird to write larger checks. Who doesn't love a bit more ownership? And because Early Bird intends to invest mostly in Europe, including the UK, its new fund could be good news for health tech startups in the region, many of which are running low on cash after the very public fall of telehealth company Babylon.

• 9:23Speaker 00

  And that is our show for this delightful Wednesday morning. Hugs to you. We hope you're doing well. We'll have more for you on Friday. But in the meantime, we are Equity Pod over on X and Threads, and we are TechCrunch Pods over on TikTok. In the meantime, I firmly recommend you take a look at both of our sister shows. That's Chain Reaction on the crypto beat and Found, talking to founders about how they built what they did. All right, this is Alex. I'll talk to you soon. Bye.

• 9:51Speaker 00

  Equity is hosted by myself, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azvedo. We are produced by Teresa Loconsolo 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.