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Startups Weekly: Trouble in Electric Vehicle Land and Peloton Circles on End

Welcome to Startups Weekly — Come ona weekly overview of everything you can’t miss from the world of startups. sign up here to receive in your inbox every Friday.

Look, I know this is our weekly startup newsletter, and as the most valuable company in the world, Apple is kind of the ultimate «not a startup,» but judging by the traffic on the site, you’re all such rabid fans that it seems rude not to do a quick preview: Apple held a short 40-minute event this week where it showed off the new iPad Airnew iPad professionals (with fancy new composite display technology), new Magic keyboardAnd the new Pencil Probrand new M4 chipsand many more. Oh, and they finally «admitted» that iPads are more like small laptops than large iPhones, so the company moved the camera to the edge of the landscape — where he should have been all along, honestly.

ooh! And I have some fun personal news: I’m joining TechCrunch Equity podcast as co-host, alongside the incredibly beautiful (and incredibly terrifying) Mary Ann Azevedo. You know, just in case you want my wacky humor in your ears, not your eye sockets.

The most interesting startup stories of the week

Get ready for a wild ride as we delve into the saga of Newchip, the accelerator that promised startups a golden ticket to success but instead led them straight to bankruptcy court. Lacey Hunter thought she’d hit the jackpot with her AI humanitarian aid startup TechAid when she joined Newchip’s program. Spoiler alert: it’s not. Instead of accelerating to stardom, Newchip filed for bankruptcy and auctioned off the warrants of more than 1,000 startups as part of an equity sale. And poor Hunter? She had no choice but to shut down TechAid in the middle of this hot mess.

In a spicy turn of events, Microsoft just hit CTRL + Z on US police departments using its Azure OpenAI service for facial recognition. This update to their terms and conditions was as subtle as a rhinoceros in a china shop. In short: if you have a badge, a handlebar mustache and a pair of aviator mirrors, then no AI face to face games for you!

  • The Rabbit R1 isn’t really meant to be good (yet): The Rabbit r1 is an AI gadget that apparently came out of the oven faster than a batch of underbaked cookies. Packed with more interesting features than app integration, this little carrot snack makes you wonder if it could have been just another app on your phone. But for now, that’s kind of the pointDevin claims.
  • I have 99 problems, but technique is not one of them: Rappers Kendrick Lamar and Drake have taken their feud to new heights – or shall we say, depths? It’s all fun and games until Tupac is deeply faked into your lane.
  • On his bike: In today’s episode of “How to Tank a $50 Billion Company,” Peloton, the once-shining star of home fitness, continues its to trudge on the sad lane of misfortune. They are laying off 15% of their workforce (that’s about 400 people for those allergic to percentages), proving that math is indeed a cruel mistress.
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Peloton Bike Lifestyle 04
Peloton’s valuation is plummeting.
Image credits: The peloton

Problems in transport trenches

Henrik Fisker’s EV startup, Fisker Inc., is having a bit of a midlife crisis. After launching two prototypes last August – the Pear and the Alaska – it reportedly froze the engineering firm that helped develop them. The company, Bertrandt AG, filed a $13 million lawsuit seeking Fisker stopped the payments and retained their intellectual property like some abandoned lover who refuses to return your favorite shirt. It doesn’t appear to be a one-off: It’s more like an episode of «Judge Judy» with more than 30 lawsuits alleging lemon law violations, unpaid wages claims from former employees and vendors suing over unpaid bills. Although Fisker’s vice president of communications insists that Bertrandt’s lawsuit is «without merit,» this pile of legal problems suggests there may be more cracks in the company than Humpty Dumpty after his unfortunate incident with the wall.

  • Tesla’s flirtation with lidar: Oh, delicious irony! Elon Musk once called lidar sensors a «crutch» for self-driving cars, but Tesla is now Luminar’s biggest customer. The company spent so much on this supposedly unnecessary technology that it accounted for more than 10% of Luminar’s revenue in the first quarter of 2024. That’s $2 million worth of crutches! Luminar itself, however, struggles, and he just laid off 20% of his staff.
  • Rivian on the ropes: This is where I thought my financial skills were questionable, but despite a whopping $1.2 billion in revenue in the first quarter, they still managed to lose $1.45 billion! It looks like their cost-cutting measures need some more lubrication before they can start dreaming of profitability.
  • Hyundai opens a piggy bank: Meanwhile, Hyundai, eager to save us from the terror of its own driving skills, allocated almost a billion dollars for Motional. This «generous» investment will give Hyundai a majority stake and sustain this self-driving startup (pun intended). It’s like a Cinderella story, but instead of a pumpkin turning into a carriage, your money turns into autonomous vehicles.
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Rivian announced the R2 back in March, but the company is still losing money hand over fist.
Image credits: Kirsten Korosec

This week’s most interesting fundraisers

Iconiq Capital, the private office that has been guarding the cash piles of Mark Zuckerberg and Jack Dorsey since 2011, has just raised an incredible $5 billion through two funds for its seventh flagship fund. This hefty fundraising puts them in the spotlight, while other big players like Tiger Global tripped over their bootstraps with just $2.2 billion (their lowest since 2014, after drawing criticism that he was deploying his money too quickly).

  • A cloud creates rain: Alternative clouds are the new cool kids on the block, folks! CoreWeave exactly raised a whopping $1.1 billion and now it is estimated at 19 billion dollars. Why? Because GPUs (those expensive technological powerhouses) are the go-to thing for training AI models, but not everyone has deep enough pockets to buy their own.
  • Let’s look inside: Remember when Vinod Khosla, founder of Khosla Ventures, boldly declared that radiologists would be obsolete in five years thanks to artificial intelligence? Yes… about that. Turns out we’re not quite there yet (shocker!). Now, having probably realized that robots aren’t ready to play doctor just yet, Khosla invests $50 million in Rad AI — a startup whose goal is to make the lives of radiologists easier without trying to replace them with machines (yet).
  • Assess the roof: Itai Ben-Zaken is living proof that startup floundering is just a cha-cha move in the entrepreneurial dance: He’s back with Honeycomb Insurance, using artificial intelligence to turn aerial shots of rooftops into property inspections for landlords, raising $36 million for the company’s Series B.
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Drawing of a cloud on a blue background with arrows going in and out of the cloud to show the concept of synchronization.
A cloud causes rain.
Image credits: Khanchit Khirisutchalual / Getty Images

Other must-see stories from TechCrunch…

Each week there are always a few stories I want to share with you that somehow don’t fit into the categories above. It would be a shame if you missed them, so here’s a goodie bag for you:

  • All deepfakes, all the time: While we’re used to seeing Katy Perry dressed like an enchanted chia pet, she wasn’t even there this year — but you wouldn’t know it from the 10 million views she’s had a fake picture in a dress in moss received on social networks.
  • Newer saw the sun, which shone so brightly: So it seems Jack Dorsey spotted Bluesky faster than a Tinder date who just discovered you own a tarantula. Mr. «I’m too cool for social media platforms,» ​​he casually said in a chat on Xu he left the board of his favorite project, Bluesky. He didn’t even bother to give a reason or tweet some cryptic haiku about change and evolution — he just replied with a plain old no when asked if he was still on the board.
  • Apple’s new ad is disgusting: Apple’s latest ad broke our hearts because it literally crushed a bunch of creative tools and analog objects into the shape of an iPad. Oh, we get it, Apple! You say this skinny (who asked for that?) new iPad can replace all those things, but your vision of a future without physical instruments or paper books seems pretty dystopian, and we don’t like it.
  • Rap with a happy ending: In the last episode «Whale, Actually,» the scientists were eavesdropping on humpback whales with a little help from machine learning. It turns out that these mammoth mammals chat using their own secret language! With a series of clicks (called «codas,» if you’re feeling fancy), the whales seem to form words and sentences we’ve never understood before. How super cool.
  • LMGTFY: Stack Overflow decided to play nice with OpenAI. After initially starting ChatGPT out of fear of spam responses, they changed their minds (or did?). Now they are teaming up to improve AI’s response to programming-related tasks.

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