Like a house of cards, it all comes crumbling down.
Housekeeping
Welcome to the ninth edition of Venture Vantage. We’ll be exploring topics related to tech and the venture ecosystem.
Feedback from last week: “This was one of my favorites.”
Unfortunately, I’m tight on time this week so it’ll be a short edition. Back to regular scheduled programming next week.
As always, please hit me back with feedback and comments—I’m constantly seeking ways to make this newsletter a more valuable read.
Diving right in and keeping things brief:
News, Deals, and Pretty Things
Forward Medical crumbles
Context:
Forward was founded in 2017 by Adrian Aoun, with the mission of leveraging AI and emerging technologies to provide a “doctor in a box” solution to consumers. The goal was high-end, subscription-based primary care with a really amazing customer experience.
The company raised $400M, with a star-studded cap table that included Founders Fund, Khosla Ventures, SoftBank, Inovia, Mark Benioff, The Weeknd, and more.
The company is abruptly shutting down after doing less than $100M in revenue since its founding and failing to raise a Series F round.
The company’s website says the app will be discontinued as of yesterday, but that medical care will continue until December 13, 2024. We can expect their 200 employees to be laid off somewhere between today and mid-December.
Vantage:
Tech layoffs like this, as unfortunate as they are, can be a great way for young startups to snag experienced operators looking for work. In my opinion, the fact that they worked for a failed startup does not mean they are bad employees.
Once hitting a $1B valuation, this is proof that the “too big to fail” days are long gone.
Amazon’s One Medical probably proved to be a fierce competitor to Forward, showing that the big boys can indeed compete with the “nimble” startups.
The era of government efficiency
Context:
Gone are the days of terrible post office service, I hope. Trump has selected Elon Musk and Vivek Ramaswamy to lead the “temporary” Department of Government Efficiency (DOGE).
There’s little detail about what DOGE will do, but the assumption is that there will be oversight of bureaucratic government offices, with the ability to provide President Trump with recommendations on how to correct shortcomings and waste.
Creating a new government department requires Congressional approval, and we don’t know if DOGE will be subject to such approval, and if so, what the result will be.
Vantage:
There might be a conflict of interest for Musk to run the DOGE because of how much SpaceX, Tesla, and Starlink receive in subsidies from the US government.
Musk has spent over $100M to help Trump get his second term in office.
Both Musk and Ramaswamy are founders.
If the DOGE achieves its many goals, it could make government contracts and compliance easier for startups, especially in sectors like biotech, defense, and clean energy.
Federal funding may shift toward high-potential startups, giving emerging ventures more access to government resources.
Wonder bought Grubhub
Context:
Wonder acquired Grubhub, the food delivery platform, for $650 million, including $500 million in senior notes and $150 million in cash.
In 2020, Just Eat Takeaway bought Grubhub for $7.3 billion in 2020, marking a huge loss for them.
Vantage:
This could signal a major shift in the startup ecosystem. Big companies are restructuring or divesting underperforming units, often to leaner startups like Wonder that can operate with a fresh approach.
This could also start being the end of legacy players’ big acquisitions of startups just for the sake of trying to expand market share. We’re seeing more and more that it hasn’t been working recently.
Deals that caught my eye
Writer, the full-stack generative AI platform, secured a $200 million Series C, led by Iconiq Growth, Premji Invest, and Radical Ventures, valuing the AI platform at $1.9 billion, up from $500 million last year.
Zeplyn, a NYC-based AI assistant for financial advisors, announced a $3M seed funding. The round was led by Leo Capital, with participation from Converge.
Fort Health, a NYC-based in-network, virtual, pediatric mental health company, raised $5.5M in funiding. The round, which brought the total amount to $16M, was led by Twelve Below and Vanterra.
Particle, backed by Lightspeed with $15.3M ($4.4M seed + $10.9M Series A), is an AI newsreader startup founded in 2023 by ex-Twitter execs Sara Beykpour and Marcel Molina that helps readers better understand news through AI-powered features and deep-dive capabilities while supporting publishers.
Rapid Fire
Context: AMD, manufacturer of AI chips just laid off about 4% of its workforce, shedding over 1,000 employees. | Vantage: This could mean that producing AI chips is becoming increasingly streamlined and automated.
Context: The DOJ is looking into US users betting on Polymarket. US-based persons are not allowed to place bets since the platform is technically unregulated. Shayne Coplan, CEO of Polymarket, had his house raided and devices seized. | Vantage: This could mean trouble for Polymarket’s growth.
Context: The Schall Law Firm is looking into allegations against Hinge owner The Match Group. According to Schall’s press release, “The investigation focuses on whether the Company issued false and/or misleading statements and/or failed to disclose information pertinent to investors.” | Vantage: I’m not sure if this qualifies as smoke in the “where there is smoke, there’s fire” test, but it certainly could be an early signal that things are less that perfect at Match, possibly disqualifying them from acquiring new dating apps as they sort out legal troubles.
White Hot
No White Hot section this week. Too busy with the travels this week. It’ll be back next week.
Some cool stuff on my radar
No cool stuff on my radar this week, either. It’ll resume next week!
Continued Reads
This week’s continued read is from a book called Founder vs. Investor by Elizabeth Zalman and Jerry Neumann. A snippet:
“Never send a deck out over email…Why give someone the chance to say no? You, the founder, are a master storyteller. You can only control the narrative live.”
I don’t entirely agree with this, but there are some interesting takes in the book.
Thanks for taking time out of your Wednesday to read.
As always, you can find me on X and LinkedIn, and I’d love to hear from you via email. Whether it’s talking startups or just shooting the shit, I’m always happy to connect.
