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Source: http://feeds2.feedburner.com/venturecapitalcafe

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<title>Weekly #FIRGUN Newsletter – October 25 2024</title>
<link>https://www.vccafe.com/2024/10/25/weekly-firgun-newsletter-october-25-2024/</link>
<comments>https://www.vccafe.com/2024/10/25/weekly-firgun-newsletter-october-25-2024/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Fri, 25 Oct 2024 10:28:44 +0000</pubDate>
<category><![CDATA[Firgun]]></category>
<category><![CDATA[bilton]]></category>
<category><![CDATA[Fauda]]></category>
<category><![CDATA[Israel]]></category>
<category><![CDATA[mave]]></category>
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<category><![CDATA[venturecapital]]></category>
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<description><![CDATA[The original version of this newsletter was published on Linkedin. The word “Firgun” (pronounced ‘feer-goon’) is an informal modern…]]></description>
<content:encoded><![CDATA[<p>The original version of this newsletter was <a href="https://www.linkedin.com/pulse/weekly-firgun-newsletter-eze-vidra-x08ae" data-type="link" data-id="https://www.linkedin.com/pulse/weekly-firgun-newsletter-eze-vidra-x08ae">published on Linkedin</a>. </p>
<p id="ember565">The word “Firgun” (pronounced ‘feer-goon’) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which describes genuine, unselfish delight or pride in the accomplishment of the other person. It’s the opposite of “schadenfreude”. Firgun is all about genuinely feeling and expressing happiness, pride, or admiration for someone else’s accomplishments, good fortune, or well-being. More about Firgun and why it matters on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a>: <a href="https://lnkd.in/dg2a86p">https://lnkd.in/dg2a86p</a></p>
<p id="ember566">It’s the Jewish holiday of Simchat Torah, at the same time last year (in the Jewish calendar) is when the October 7 attacks took place, taking the lives of 1,200 Israelis (may their memory be a blessing). Unfortunately, over a year later, Israel is now defending itself from threats across 7 fronts and there are still 101 Israelis held hostage in G**a. We must #BRINGTHEMHOME</p>
<p id="ember567">It’s been a slower news week in Israeli startups due to the holidays of Sukkot and Simchat Torah. Most kids are off school, but nevertheless, several founding rounds were announced over the first half of the week as well as two new funds.</p>
<p id="ember568">In the wider tech world, <a href="https://www.linkedin.com/company/anthropicresearch/">Anthropic</a> upgraded Claude 3.5 Sonnet, and introduced a new model, Claude 3.5 Haiku (which is performing better than GPT4-01). The company also introduced “<a href="https://www.anthropic.com/news/3-5-models-and-computer-use">computer use</a>“, where developers can direct Claude to use computers the way people do—by looking at a screen, moving a cursor, clicking, and typing text. <a href="https://www.linkedin.com/company/openai/">OpenAI</a> plans to release its next big AI model by December (codename: <a href="https://www.theverge.com/2024/10/24/24278999/openai-plans-orion-ai-model-release-december">Orion</a>). Also, two OpenAI researchers published a paper describing a new <a href="https://venturebeat.com/ai/openai-researchers-develop-new-model-that-speeds-up-media-generation-by-50x/">continuous-time consistency model (sCM)</a> that increases the speed at which multimedia including images, video, and audio can be generated by AI by 50 times compared to traditional diffusion models. <a href="https://www.linkedin.com/company/tms-consultancy-s/">TMSC</a> started making chips in Arizona, with yields higher than Taiwan. <a href="https://www.linkedin.com/company/general-catalyst/">General Catalyst</a> raised a new $8 billion venture fund, the largest amount by a US VC firm in more than two years. <a href="https://www.linkedin.com/company/google/">Google</a> released <a href="https://deepmind.google/technologies/synthid/?">SynthID Text</a>, which lets developers watermark and detect text generated by AI models. The company also launched <a href="https://deepmind.google/discover/blog/new-generative-ai-tools-open-the-doors-of-music-creation/">MusicFX DJ and also updated Music AI Sandbox</a>, a suite of experimental music tools which can streamline creation. <a href="https://www.linkedin.com/company/elevenlabsio/">ElevenLabs</a> introduced <a href="https://x.com/elevenlabsio/status/1849083718838657186">Voice Design</a>, the ability to generate a unique voice from a text prompt alone. The actual list is much longer:</p>
<ul class="wp-block-list">
<li><a href="https://www.linkedin.com/company/runwayml/">Runway</a> launched <a href="https://runwayml.com/research/introducing-act-one">Act-One</a></li>
<li><a href="https://www.linkedin.com/company/ideogram-ai/">Ideogram</a> released new <a href="https://about.ideogram.ai/canvas">Canvas photo editing</a></li>
<li><a href="https://www.linkedin.com/company/openai/">OpenAI</a> launched Voice mode in EU</li>
<li><a href="https://www.linkedin.com/company/perplexity-ai/">Perplexity</a> released <a href="https://www.linkedin.com/posts/perplexity-ai_introducing-reasoning-mode-pro-search-is-activity-7254567724029259777-pobs/">Reasoning Mode</a></li>
<li><a href="https://www.linkedin.com/company/genmoai/">Genmo</a> released New <a href="https://venturebeat.com/ai/video-ai-startup-genmo-launches-mochi-1-an-open-source-model-to-rival-runway-kling-and-others/">open source AI video Mochi 1</a></li>
</ul>
<p id="ember570">But that’s all I have time to cover this week!</p>
<h2 class="wp-block-heading" id="ember571"><span id="quote-of-the-week">QUOTE OF THE WEEK</span></h2>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” </p>
<cite>Bill Gates</cite></blockquote>
<h2 class="wp-block-heading" id="ember573"><span id="new-venture-rounds">NEW VENTURE ROUNDS</span></h2>
<ul class="wp-block-list">
<li>Congratulations <a href="https://www.linkedin.com/in/tomer-shussman-3958ba9b/">Tomer Shussman</a> and team <a href="https://www.linkedin.com/company/take-one-step/"><strong>OneStep</strong></a> on raising a $36M <span class="mywpglossary-term-def" data-title="series-b" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-b">series B</span> to advance your AI-driven care <span class="mywpglossary-term-def" data-title="platform" data-url="https://www.vccafe.com/startup-and-vc-glossary/#platform">platform</span>, powered by smartphone motion intelligence!</li>
<li>Well done <a href="https://www.linkedin.com/in/roey-dor-bab523142/">Roey Dor</a> and team <a href="https://www.linkedin.com/company/depositfree/"><strong>Obligo</strong></a> on securing a $35M <span class="mywpglossary-term-def" data-title="series-c" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-c">series C</span> to support renters and landlords with a security deposit alternative utilising bank-issued Letters of Credit!</li>
<li>Kudos <a href="https://www.linkedin.com/in/or-shoshani/">Or Shoshani</a> and team <a href="https://www.linkedin.com/company/streamsecurity/"><strong>Stream.Security</strong></a> on securing a $30M <span class="mywpglossary-term-def" data-title="series-b" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-b">series B</span> for your cloud detection and response <span class="mywpglossary-term-def" data-title="platform" data-url="https://www.vccafe.com/startup-and-vc-glossary/#platform">platform</span>!</li>
<li>Awesome news <a href="https://www.linkedin.com/in/omer-slavin/">Omer Slavin</a> and team <a href="https://www.linkedin.com/company/bilton/"><strong>BiltOn</strong></a> on your $15M <span class="mywpglossary-term-def" data-title="series-a" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-a">series A</span> for your construction operations and risk management <span class="mywpglossary-term-def" data-title="platform" data-url="https://www.vccafe.com/startup-and-vc-glossary/#platform">platform</span> that already serves 70% of the local market!</li>
<li>Way to go <a href="https://www.linkedin.com/in/razzohar/">Raz Zohar</a> and team <a href="https://www.linkedin.com/company/maveinc/"><strong>Mave</strong></a> on your $2 pre-seed for your AI Assistant for the Real Estate Industry!</li>
</ul>
<h2 class="wp-block-heading" id="ember580"><span id="new-funds">NEW FUNDS</span></h2>
<ul class="wp-block-list">
<li>Congratulations <a href="https://www.linkedin.com/in/giliraanan/">Gili Raanan</a> and team <a href="https://www.linkedin.com/company/cyberstarts/"><strong>Cyberstarts</strong></a> on the new (and fourth) $60M fund to invest in seed stage Israeli <span class="mywpglossary-term-def" data-title="cybersecurity" data-url="https://www.vccafe.com/startup-and-vc-glossary/#cybersecurity">cybersecurity</span> startups!</li>
<li>Well done <a href="https://www.linkedin.com/in/malinger/">Eyal Malinger</a> and <a href="https://www.linkedin.com/in/oren-peleg-142690118/">Oren Peleg</a> and team <a href="https://www.linkedin.com/company/resurgegrowth/"><strong>Resurge Growth Partners</strong></a> on the first closing of an investment vehicle focused on helping companies caught between the venture capital and <span class="mywpglossary-term-def" data-title="private-equity" data-url="https://www.vccafe.com/startup-and-vc-glossary/#private-equity">private <span class="mywpglossary-term-def" data-title="equity" data-url="https://www.vccafe.com/startup-and-vc-glossary/#equity">equity</span></span> worlds.</li>
</ul>
<h2 class="wp-block-heading" id="ember585"><span id="links-for-your-browser">LINKS FOR YOUR BROWSER</span></h2>
<p id="ember586">From <a href="https://www.linkedin.com/company/vc-cafe/"><strong>VC Cafe</strong></a>:</p>
<ol class="wp-block-list">
<li><a href="https://www.vccafe.com/2024/10/22/q3-2024-quarterly-emerging-sector-analysis/">Q3 2024 emerging tech sector analysis</a>: diving into generative AI, spatial computing, gaming, crypto and TMT</li>
<li><a href="https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/">What comes after LLMs for VC Investing</a> – as foundational models are starting to plateau, where will AI investments go next</li>
<li>ICMYI: <a href="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/">The booming Voice AI landscape: A VC Perspective</a></li>
</ol>
<p id="ember588"><strong>Israel:</strong></p>
<ol class="wp-block-list">
<li><a href="https://www.israel21c.org/israels-influential-place-in-the-creator-economy">Israel’s influential space in the creator economy</a> – <a href="https://www.linkedin.com/company/israel21c/">ISRAEL21c — Good News From Israel</a> including quotes by me and featuring several of our <a href="https://www.linkedin.com/company/remagine-ventures/">Remagine Ventures</a> <span class="mywpglossary-term-def" data-title="portfolio" data-url="https://www.vccafe.com/startup-and-vc-glossary/#portfolio">portfolio</span> companies</li>
<li>A week after everyone else, <a href="https://www.linkedin.com/company/linkedin/">LinkedIn</a> <a href="https://www.linkedin.com/pulse/linkedin-top-startups-2024-15-israeli-companies-rise-linkedin-news-3o2xf/">published the list of top Israeli companies in 2024, based on job growth, candidate interest, etc</a></li>
<li><a href="https://en.globes.co.il/en/article-israeli-businessman-offers-gazans-100000-reward-for-hostages-1001492092">Former CEO of Sodastream offers Gazans $100,000 for every live hostage released</a></li>
</ol>
<h2 class="wp-block-heading" id="ember590"><span id="media-of-the-week">MEDIA OF THE WEEK</span></h2>
<p id="ember591">The most sought after Israeli startups according to Linkedin</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQGJXUuJAUy2uQ/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729849421064?e=1735171200&v=beta&t=NIEQSLORi2oHdufZm-ur27UnBP38B9cmOJSJeiWQOLA" alt=""/></figure>
<p id="ember594">Close to $100 billion has been invested in AI companies, with the majority of that money invested in US companies. In total, generative AI companies received $35 billion in 2024.AI companies have reached a combined value of $9 trillion. (<a href="https://docs.google.com/presentation/d/1GmZmoWOa2O92BPrncRcTKa15xvQGhq7g4I4hJSNlC0M/edit#slide=id.g2ffd7ef5b89_0_1">source</a>)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFjURMfM_oDGw/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729849661007?e=1735171200&v=beta&t=uiTNtjcYkFiZO-VLvlGyopdOWwSpvxaNyjhh9-7DnPM" alt=""/></figure>
<p id="ember596">The modern marketing data stack 2025 – How leading marketers are thriving in a world redefined by AI, privacy and data gravity (<a href="https://www.snowflake.com/en/the-modern-marketing-data-stack-report">source</a>)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHVSotsW4KTEQ/article-inline_image-shrink_1000_1488/article-inline_image-shrink_1000_1488/0/1729849789850?e=1735171200&v=beta&t=3FAB1lQIFymNGpokX7FEBNN8axTdhn9lTSkbZzfwa6s" alt=""/></figure>
<p id="ember600">Based on their revenue streams, Anthropic emerges as an infrastructure player, while OpenAI operates more like a consumer-facing company.</p>
<p id="ember601">Going to be interesting to see where each company is a few years from now.</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEzh0UFaA9SIQ/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729849826429?e=1735171200&v=beta&t=xSPfaJ9ndMOML9YGV6sFFQwta-eMi-iA6Ty9332QduE" alt=""/></figure>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFkgO5EqbKgCg/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729849853993?e=1735171200&v=beta&t=G8GdEXbJpPBMpzjDhtt2rHR1eO64y95TwivnW9TujBA" alt=""/></figure>
<p id="ember605">Creators now represent about 7% of the US workforce as there are 12 million full time influencers (<a href="https://www.complex.com/life/a/tracewilliamcowen/12-million-influencers-us">source</a>) The rebound in funding for creator startups was short lived. Funding for U.S. creator economy startups fell nearly 16% to $253.1 million in Q3 year over year. Global funding also dropped. (<a href="https://www.theinformation.com/articles/u-s-creator-startup-funding-drops-ending-two-quarter-rebound">source</a>). Related: <a href="https://www.israel21c.org/israels-influential-place-in-the-creator-economy">Israel’s special place in the creator economy</a></p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQErTlQ53AvJOw/article-inline_image-shrink_1000_1488/article-inline_image-shrink_1000_1488/0/1729849959254?e=1735171200&v=beta&t=3Pxkms8gLT796pOlXbva6disHLY4Vva2FWkJIO9mcKE" alt=""/></figure>
<p id="ember608">This is an AI generated video of Fauda – the lego version… credit to Timmy Turtle</p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe title="Fauda - the LEGO Version" width="1200" height="675" src="https://www.youtube.com/embed/zNAJUAOX6Gs?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p id="ember609">That’s all for this week. Thank you for tuning in.</p>
<p id="ember610">There’s a lot to celebrate in our “small” community! Keep on creating.</p>]]></content:encoded>
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<title>Q3 2024 Quarterly Emerging Sector Analysis</title>
<link>https://www.vccafe.com/2024/10/22/q3-2024-quarterly-emerging-sector-analysis/</link>
<comments>https://www.vccafe.com/2024/10/22/q3-2024-quarterly-emerging-sector-analysis/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Tue, 22 Oct 2024 12:20:04 +0000</pubDate>
<category><![CDATA[Crypto]]></category>
<category><![CDATA[gaming]]></category>
<category><![CDATA[Generative AI]]></category>
<category><![CDATA[Spatial Computing]]></category>
<category><![CDATA[Apple Vision Pro]]></category>
<category><![CDATA[Consumer]]></category>
<category><![CDATA[crypto]]></category>
<category><![CDATA[Deloitte]]></category>
<category><![CDATA[generative AI]]></category>
<category><![CDATA[Media]]></category>
<category><![CDATA[Meta]]></category>
<category><![CDATA[spatial computing]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=10897</guid>
<description><![CDATA[From GenAI to spatial computing: 5 Key Market Sectors Reshaping Tech in Q3 2024]]></description>
<content:encoded><![CDATA[<p>With Q3 2024 officially behind us, a number of sector specific reports have been published that are worth covering. This is not only helpful for startups and investors who are actively deploying in those sectors, but also to founders at the beginning of their journeys who are looking for ‘requests for startups’ or problem areas worth diving into. I chose to focus on 5 areas that are particularly relevant to us at Remagine Ventures. </p>
<h2 id="media-and-entertainment-includes-martech-and-adtech-by-luma-partners" class="wp-block-heading">Media and Entertainment (includes Martech and Adtech) by Luma Partners</h2>
<p>LUMA Partners released their <a href="https://lumapartners.com/presentations/q3-2024-market-report/" data-type="link" data-id="https://lumapartners.com/presentations/q3-2024-market-report/">Q3 2024 Market Report</a> for the Digital Media & Marketing sector. <a href="https://www.vccafe.com/2024/04/15/generative-ai-opportunity-or-the-end-of-media-as-we-know-it/" data-type="link" data-id="https://www.vccafe.com/2024/04/15/generative-ai-opportunity-or-the-end-of-media-as-we-know-it/">As previously mentioned on VC Cafe</a>, the media and entertainment space is experiencing a lot of disruption: the move from cable to streaming (and from streaming to Youtube), shorter attention spans driving consumers to short form vertical video (TikTok, Instagram Reels and Shorts) and big changes to how content is created (and the cost of creating content) thanks to generative AI. </p>
<p>Highlights from the report: </p>
<ul class="wp-block-list">
<li>M&A activity is up for the third consecutive quarter and 51% year over year – this includes several Israeli startups like Salesforce <span class="mywpglossary-term-def" data-title="acquisition" data-url="https://www.vccafe.com/startup-and-vc-glossary/#acquisition">acquisition</span> of Zoomin for $450M , and Playtika’s <span class="mywpglossary-term-def" data-title="acquisition" data-url="https://www.vccafe.com/startup-and-vc-glossary/#acquisition">acquisition</span> of Superplay for $700M in cash and up to $1.9 billion in earn out based on performance. </li>
<li>There is an increasing convergence of content generation, data & identity, and marketing <span class="mywpglossary-term-def" data-title="automation" data-url="https://www.vccafe.com/startup-and-vc-glossary/#automation">automation</span>, driven by AI. This will impact the world of media and entertainment in a profound way, across three areas:
<ul class="wp-block-list">
<li><strong>Content Generation</strong>: Generative AI is capable of creating diverse forms of content, including text, images, music, and video. This capability could revolutionise content production and distribution for media and entertainment companies. For example, our <span class="mywpglossary-term-def" data-title="portfolio" data-url="https://www.vccafe.com/startup-and-vc-glossary/#portfolio">portfolio</span> company <a href="https://www.hourone.ai">HourOne</a> can generate high quality videos of people speaking in a talk show, completely generated with AI. </li>
<li><strong>Data & Identity</strong>: AI excels at analysing user data to deliver personalised content recommendations, targeted advertising, and tailored user experiences. This could transform how media and entertainment platforms engage their audiences and generate revenue. </li>
<li><strong>Marketing <span class="mywpglossary-term-def" data-title="automation" data-url="https://www.vccafe.com/startup-and-vc-glossary/#automation">Automation</span></strong>: AI-powered tools can automate marketing tasks like content creation, social media management, and ad campaign optimisation. This <span class="mywpglossary-term-def" data-title="automation" data-url="https://www.vccafe.com/startup-and-vc-glossary/#automation">automation</span> could significantly impact how media and entertainment companies promote their content and reach their target audiences. For example, our <span class="mywpglossary-term-def" data-title="portfolio" data-url="https://www.vccafe.com/startup-and-vc-glossary/#portfolio">portfolio</span> company <a href="https://www.getmunch.com">Munch</a> automatically creates short form, vertical clips for social media from any long form video and understands what’s trending. </li>
</ul>
</li>
</ul>
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<h2 id="gaming-by-konvoy" class="wp-block-heading">Gaming by Konvoy</h2>
<p>The <a href="https://www.konvoy.vc/reports-pdf/konvoy-gaming-industry-report-q3-2024?xYanOv=Ia10qKYOarXZ8y1qtZWN3&slOger=subscribed" data-type="link" data-id="https://www.konvoy.vc/reports-pdf/konvoy-gaming-industry-report-q3-2024?xYanOv=Ia10qKYOarXZ8y1qtZWN3&slOger=subscribed"><strong>latest report by Konvoy</strong></a>, a gaming venture capital firm, analyses the state of the gaming industry in the third quarter of 2024. There’s been little growth in the gaming industry year over year – it is projected to reach a market size of $188 billion by the end of 2024 (a modest 3% growth) and is expected to grow to $223 billion by 202<a href="https://gam3s.gg/news/gaming-market-to-reach-223-billion/" target="_blank" rel="noreferrer noopener">9</a>.</p>
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<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="461" data-attachment-id="10902" data-permalink="https://www.vccafe.com/2024/10/22/q3-2024-quarterly-emerging-sector-analysis/63349d8d30cdd0398aa30c8b_q32022-konvoy-infographic/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?fit=2560%2C1151&ssl=1" data-orig-size="2560,1151" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="63349d8d30cdd0398aa30c8b_Q32022 Konvoy Infographic" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?fit=300%2C135&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?fit=1024%2C461&ssl=1" tabindex="0" role="button" data-id="10902" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic.webp?resize=1024%2C461&ssl=1" alt="" class="wp-image-10902" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=1024%2C461&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=300%2C135&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=768%2C345&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=1536%2C691&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=2048%2C921&ssl=1 2048w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=380%2C171&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=800%2C360&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=1160%2C522&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?resize=150%2C67&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?w=2560&ssl=1 2560w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/63349d8d30cdd0398aa30c8b_Q32022-Konvoy-Infographic-scaled.webp?w=2400&ssl=1 2400w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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</figure>
<p>Three key trends worth paying attention to in gaming in Q3 2024:</p>
<ul class="wp-block-list">
<li><strong>Funding</strong> – The total amount of private funding for the first three quarters of 2024 is higher than the entire 2023 total, largely due to Disney’s $1.5 billion investment in Epic Games. Private funding in the gaming sector reached $811 million in Q3 2024, marking a 15% increase from the previous quarter. Traditional content studios are facing compression in VC funding, as content alone doesn’t seem to be a strong fit for venture capital at this stage. 41 gaming M&A transactions occurred in Q3 2024. </li>
<li><strong>The impact of AI on gaming</strong> – AI-related companies attracted 22% of the total funding in Q3, equating to $113 million, up from 10% and $52 million in Q2. Two notable AI investments were <a href="https://www.volleygames.com/" data-type="link" data-id="https://www.volleygames.com/">Volley’s</a> <a href="https://venturebeat.com/games/volley-raises-55m-voice-enabled-ai-games/#:~:text=Volley%20has%20raised%20%2455%20million%20in%20a%20new%20round%20of,round%20with%20Microsoft's%20M12%20Ventures." data-type="link" data-id="https://venturebeat.com/games/volley-raises-55m-voice-enabled-ai-games/#:~:text=Volley%20has%20raised%20%2455%20million%20in%20a%20new%20round%20of,round%20with%20Microsoft's%20M12%20Ventures.">$55 million fundraise</a> and <a href="https://www.series.inc/" data-type="link" data-id="https://www.series.inc/">Series Entertainment’s</a> <a href="https://www.leadsontrees.com/news/series-entertainment-secures-28-million-in-funding-to-shape-the-future-of-game-development" data-type="link" data-id="https://www.leadsontrees.com/news/series-entertainment-secures-28-million-in-funding-to-shape-the-future-of-game-development">$28 million Series A</a> round. There’s significant investor interest in AI-powered gaming startups, particularly those focused on virtual characters and tools that streamline game development processes.</li>
<li><strong>Distribution is changing</strong> in a number of ways:
<ul class="wp-block-list">
<li>Discord’s launch of “Activities” in September offers developers another avenue for distribution and user engagement.</li>
<li>Epic sued Apple, Google and Samsung for the anti competitive behaviour and won. That means that 1) Epic now has its own <span class="mywpglossary-term-def" data-title="app-store" data-url="https://www.vccafe.com/startup-and-vc-glossary/#app-store">app store</span>, attracting developers by charging 12% compared to Apple’s 30%. The ruling could potentially allow developers to retain more revenue by bypassing Google’s fees and regulations.</li>
</ul>
</li>
</ul>
<h2 id="generative-ai-in-the-enterprise-by-deloitte" class="wp-block-heading">Generative AI in the Enterprise by Deloitte</h2>
<p><a href="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consulting/us-state-of-gen-ai-q3.pdf" data-type="link" data-id="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consulting/us-state-of-gen-ai-q3.pdf">The Q3 2024 report of Generative AI in the Enterprise by Deloitte</a> surveyed 2,770 senior leaders from organisations with active AI implementations. The big picture: enterprises are recognising the value of generative AI and are investing more heavily in development and deployment. However, several key challenges hinder wider adoption, including concerns around data management, risk mitigation, governance, and value measurement.</p>
<p>Key highlights from the report:</p>
<ul class="wp-block-list">
<li><strong><span class="mywpglossary-term-def" data-title="enterprise" data-url="https://www.vccafe.com/startup-and-vc-glossary/#enterprise">Enterprise</span> is interested in GenAI but leaning in with caution:</strong> 67% of surveyed organisations are increasing their generative AI investments due to observed value. However, 68% of organisations have moved only 30% or fewer of their generative AI experiments into production.</li>
<li><strong>The key benefits enterprises find in generative AI are improved efficiency, productivity, and cost reduction.</strong> But organisations are realising a broader range of benefits, including increased innovation, improved products and services, and enhanced customer relationships</li>
<li><strong>Risk, Regulation, and Governance as Top Barriers:</strong> Concerns around risk management, regulatory compliance, and governance are significant barriers to generative AI development and deployment. Organizations feel less prepared to address these challenges, with only 23% rating themselves as highly prepared for risk and governance aspects.</li>
</ul>
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<h2 id="crypto-by-andreessen-horowitz" class="wp-block-heading">Crypto by Andreessen Horowitz</h2>
<p>The <a href="https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/" data-type="link" data-id="https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/"><strong>a16z State of Crypto Report 2024</strong></a> highlights several key trends and developments in the cryptocurrency sector:</p>
<ul class="wp-block-list">
<li><strong>Record activity</strong> – even though we don’t hear about it as much in mainstream news, Crypto usage and activity have reached all-time highs, indicating growing mainstream adoption and increased utility of <span class="mywpglossary-term-def" data-title="blockchain" data-url="https://www.vccafe.com/startup-and-vc-glossary/#blockchain">blockchain</span> technologies. The report estimates there are 30 to 60 million monthly active crypto users worldwide, representing 5-10% of global crypto owners.</li>
<li><strong>Stablecoins and Defi </strong>are the most popular uses for crypto today. Case in point, Stablecoin transaction volumes surpassed Visa’s in Q2 2024, underscoring their utility and growing adoption. DeFi protocols currently hold over $169 billion, with staking and lending being popular subcategories.</li>
<li><strong>Improved <span class="mywpglossary-term-def" data-title="blockchain" data-url="https://www.vccafe.com/startup-and-vc-glossary/#blockchain">blockchain</span> infrastructure</strong> – <span class="mywpglossary-term-def" data-title="ethereum" data-url="https://www.vccafe.com/startup-and-vc-glossary/#ethereum">Ethereum</span>’s “Dencun” upgrade has led to a substantial decrease in transaction fees for L2 networks and lower transaction costs and increased capacity have spurred the growth of consumer apps like low-cost NFT collections, onchain games, social networks, and prediction markets.</li>
</ul>
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data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2.jpg?fit=300%2C169&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2.jpg?fit=1024%2C576&ssl=1" tabindex="0" role="button" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?strip=info&w=600&ssl=1 600w,https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?strip=info&w=900&ssl=1 900w,https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?strip=info&w=1200&ssl=1 1200w,https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?strip=info&w=1500&ssl=1 1500w,https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?strip=info&w=1800&ssl=1 1800w,https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?strip=info&w=2000&ssl=1 2000w" alt="" data-height="1406" data-id="10908" data-link="https://www.vccafe.com/?attachment_id=10908" data-url="https://www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg" data-width="2500" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-2-1024x576.jpg?ssl=1" data-amp-layout="responsive" aria-label="Open image 6 of 7 in full-screen"/></figure></div><div class="tiled-gallery__col" style="flex-basis:33.33333%"><figure class="tiled-gallery__item"><img decoding="async" data-attachment-id="10909" data-permalink="https://www.vccafe.com/2024/10/22/q3-2024-quarterly-emerging-sector-analysis/state-of-crypto-2024-master-1/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1.jpg?fit=2500%2C1406&ssl=1" data-orig-size="2500,1406" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="State-of-Crypto-2024-MASTER-1" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1.jpg?fit=300%2C169&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1.jpg?fit=1024%2C576&ssl=1" tabindex="0" role="button" data-attachment-id="10909" data-permalink="https://www.vccafe.com/2024/10/22/q3-2024-quarterly-emerging-sector-analysis/state-of-crypto-2024-master-1/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1.jpg?fit=2500%2C1406&ssl=1" data-orig-size="2500,1406" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="State-of-Crypto-2024-MASTER-1" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1.jpg?fit=300%2C169&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1.jpg?fit=1024%2C576&ssl=1" tabindex="0" role="button" srcset="https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?strip=info&w=600&ssl=1 600w,https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?strip=info&w=900&ssl=1 900w,https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?strip=info&w=1200&ssl=1 1200w,https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?strip=info&w=1500&ssl=1 1500w,https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?strip=info&w=1800&ssl=1 1800w,https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?strip=info&w=2000&ssl=1 2000w" alt="" data-height="1406" data-id="10909" data-link="https://www.vccafe.com/?attachment_id=10909" data-url="https://www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg" data-width="2500" src="https://i2.wp.com/www.vccafe.com/wp-content/uploads/2024/10/State-of-Crypto-2024-MASTER-1-1024x576.jpg?ssl=1" data-amp-layout="responsive" aria-label="Open image 7 of 7 in full-screen"/></figure></div></div></div></div></div>
<h2 id="spatial-computing-by-enders-analysis-and-precedence-research" class="wp-block-heading">Spatial Computing by Enders Analysis and Precedence Research</h2>
<p>According to the <a href="https://www.endersanalysis.com/reports/2024-spatial-computing-market-update" data-type="link" data-id="https://www.endersanalysis.com/reports/2024-spatial-computing-market-update">2024 spatial computing market update</a> by Enders Analysis, the spatial computing ecosystem is experiencing an upturn due to increased availability of head-mounted devices (HMDs) primarily by Apple and Meta, albeit with very different strategies. </p>
<p>Key highlights in the spatial computing space: </p>
<ul class="wp-block-list">
<li><strong>Market Size and Growth</strong>: The spatial computing market is expected to grow significantly, with projections suggesting it could reach USD 280.5 billion by 2028, growing at a Compound Annual <span class="mywpglossary-term-def" data-title="growth-rate" data-url="https://www.vccafe.com/startup-and-vc-glossary/#growth-rate">Growth Rate</span> (CAGR) of 23.4% from 2023. This indicates robust growth fuelled by technological advancements and increasing adoption across various industries.</li>
<li><strong>Market leaders:</strong> Apple is rumoured to release the <a href="https://appleinsider.com/articles/24/10/13/cheaper-apple-vision-headset-rumored-to-cost-2000-arriving-in-2026" data-type="link" data-id="https://appleinsider.com/articles/24/10/13/cheaper-apple-vision-headset-rumored-to-cost-2000-arriving-in-2026">Apple Vision Pro 2 in 2026</a>, costing 30% less than its predecessor. Apple has chosen a design for the <span class="mywpglossary-term-def" data-title="vision" data-url="https://www.vccafe.com/startup-and-vc-glossary/#vision">Vision</span> Pro that lacks controllers, making it primarily reliant on passive entertainment. In contrast, Meta is deeply engaged in gaming and 3D experiences, showcasing the potential for the HMD category. Meta has the most affordable and popular VR headset, the Meta Quest (including the new <a href="https://about.fb.com/news/2024/09/meta-quest-3s-our-most-affordable-mixed-reality-headset/" data-type="link" data-id="https://about.fb.com/news/2024/09/meta-quest-3s-our-most-affordable-mixed-reality-headset/">3S model</a>) and is working on <a href="https://about.fb.com/news/2024/09/introducing-orion-our-first-true-augmented-reality-glasses/" data-type="link" data-id="https://about.fb.com/news/2024/09/introducing-orion-our-first-true-augmented-reality-glasses/">project Orion</a>, revolutionary new AR glasses. </li>
<li><strong>New Entrants:</strong> More companies coming into the space: media and entertainment companies are learning in on AR/VR/XR content and experiences, although gaming expected to remain the dominant <span class="mywpglossary-term-def" data-title="use-case" data-url="https://www.vccafe.com/startup-and-vc-glossary/#use-case">use case</span> until the end of the decade. A potential killer app for VR and smart glasses might turn to be live sports. <br /></li>
</ul>
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<hr class="wp-block-separator has-alpha-channel-opacity"/>
<p>You get the picture: there’s a ton of innovation happening across media, gaming, AI, crypto, and spatial computing. The convergence of these sectors, particularly through AI integration, creates unprecedented opportunities for ambitious founders. </p>
<p>At Remagine Ventures, we’re particularly excited about backing early-stage founders building at these intersections. If you’re working on something innovative in these spaces at the pre-seed stage, we’d love to hear from you and explore how we can support your journey.</p>]]></content:encoded>
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<slash:comments>0</slash:comments>
<post-id xmlns="com-wordpress:feed-additions:1">10897</post-id> <enclosure length="53131382" type="application/pdf" url="https://www2.deloitte.com/content/dam/Deloitte/us/Documents/consulting/us-state-of-gen-ai-q3.pdf"/><itunes:explicit>no</itunes:explicit><itunes:subtitle>From GenAI to spatial computing: 5 Key Market Sectors Reshaping Tech in Q3 2024</itunes:subtitle><itunes:summary>From GenAI to spatial computing: 5 Key Market Sectors Reshaping Tech in Q3 2024</itunes:summary><itunes:keywords>Crypto, gaming, Generative AI, Spatial Computing, Apple Vision Pro, Consumer, crypto, Deloitte, generative AI, Media, Meta, spatial computing</itunes:keywords></item>
<item>
<title>What comes after LLMs for VC Investments</title>
<link>https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/</link>
<comments>https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Sun, 20 Oct 2024 18:23:47 +0000</pubDate>
<category><![CDATA[Foundation Models]]></category>
<category><![CDATA[Generative AI]]></category>
<category><![CDATA[LLMs]]></category>
<category><![CDATA[AI agents]]></category>
<category><![CDATA[Anthropic]]></category>
<category><![CDATA[generative AI]]></category>
<category><![CDATA[OpenAI]]></category>
<category><![CDATA[SLMs]]></category>
<category><![CDATA[Vertical AI]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=10911</guid>
<description><![CDATA[The next wave of AI won’t be driven by LLMs. Here’s what investors should focus on instead]]></description>
<content:encoded><![CDATA[<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>As competition heats up, plowing money into foundation model startups is fraught with risk. Building foundation models from scratch requires enormous resources in the form of computing power and human talent — both of which remain scarce.<br /></p>
<cite><a href="https://www.spglobal.com/marketintelligence/contributors/2709860/iuri-struta">Iuri Struta</a>, S&P Global (<a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/genai-investors-target-app-makers-in-2024-as-foundation-model-focus-fades-81163387" data-type="link" data-id="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/genai-investors-target-app-makers-in-2024-as-foundation-model-focus-fades-81163387">source</a>)</cite></blockquote>
<p>I was listening to <a href="https://www.linkedin.com/in/ACoAAABG49gBNBi5s39s22VMbEQ8us2e-1POd5c"></a><a href="https://www.linkedin.com/in/brettaylor/">Bret Taylor</a>, the founder and CEO of Sierra, former co-CEO of Salesforce, ex CTO of Facebook and current chairman of OpenAI <a href="https://podcasts.apple.com/gb/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465?i=1000671512853" data-type="link" data-id="https://podcasts.apple.com/gb/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465?i=1000671512853">on the 20VC podcast</a>. He talked about where we are in the timeline of generative AI and it made me realise that we’re making an interesting shift now.<br /><br />While most VC money (in terms of $ amount) went to foundational models (think <a href="https://www.linkedin.com/company/openai/">OpenAI</a>, <a href="https://www.linkedin.com/company/anthropicresearch/">Anthropic</a> and <span class="mywpglossary-term-def" data-title="open-source" data-url="https://www.vccafe.com/startup-and-vc-glossary/#open-source">open source</span> including <a href="https://www.linkedin.com/company/mistralai/">Mistral AI</a>, <a href="https://www.linkedin.com/company/meta/">Meta</a> and to an extent <a href="https://www.linkedin.com/company/nvidia/">NVIDIA</a>), the LLMs are reaching a <span class="mywpglossary-term-def" data-title="bit" data-url="https://www.vccafe.com/startup-and-vc-glossary/#bit">bit</span> of a saturation (until the next major breakthrough) and they are ‘good enough’ to <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> applications on.</p>
<p>In 2023 foundation models raised $28.67 billion across 9 top pure-play companies. Application companies on the other hand, those that <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> on top of existing models instead of training their own, attracted over twice as much funding in Q1 2024 vs Q1 2023.</p>
<div class="wp-block-image">
<figure class="aligncenter size-full"><img data-recalc-dims="1" loading="lazy" decoding="async" width="660" height="474" data-attachment-id="10914" data-permalink="https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/gen-app-applications-vs-models/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?fit=660%2C474&ssl=1" data-orig-size="660,474" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Gen app applications vs models" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?fit=300%2C215&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?fit=660%2C474&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?resize=660%2C474&ssl=1" alt="" class="wp-image-10914" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?w=660&ssl=1 660w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?resize=300%2C215&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?resize=380%2C273&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Gen-app-applications-vs-models.png?resize=150%2C108&ssl=1 150w" sizes="(max-width: 660px) 100vw, 660px" /></figure></div>
<p>However, we’re starting to see that foundational models are starting to plateau. LLMs, while revolutionary, are flawed in significant ways. The issues are well known: they hallucinate, they largely lack reasoning skills, they require obscene amounts of training data and computational power, making them costly to scale. A recent <a href="https://machinelearning.apple.com/research/gsm-symbolic" data-type="link" data-id="https://machinelearning.apple.com/research/gsm-symbolic">research paper by Apple</a> on the limitations of LLMs suggests that brute force is not going to solve these problems either. </p>
<p>Venture capital fund Accel noted this tension between the major and minor league in AI in their <a href="https://www.slideshare.net/slideshow/accel-2024-euroscape-ai-eating-software-1b24/272439657" data-type="link" data-id="https://www.slideshare.net/slideshow/accel-2024-euroscape-ai-eating-software-1b24/272439657">Euroscape 2024 report</a>. Basically, to be able to compete in what Accel called the ‘AI Majors’ league, companies need to be able to raise at least $100 million, almost at inception. Case in point, Mira Murati, OpenAI’s co-founder and former CTO who recently left the company, is <a href="https://www.reuters.com/technology/artificial-intelligence/former-openai-technology-chief-mira-murati-raise-capital-new-ai-startup-sources-2024-10-18/" data-type="link" data-id="https://www.reuters.com/technology/artificial-intelligence/former-openai-technology-chief-mira-murati-raise-capital-new-ai-startup-sources-2024-10-18/">rumoured to be raising $100M</a> for her new startup which “will train proprietary models to <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> AI products”. Even the AI challengers, require deep pockets to get started unless they have a real competitive edge. </p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="573" data-attachment-id="10915" data-permalink="https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/whatsapp-image-2024-10-20-at-13-58-16/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?fit=1600%2C896&ssl=1" data-orig-size="1600,896" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="WhatsApp Image 2024-10-20 at 13.58.16" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?fit=300%2C168&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?fit=1024%2C573&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=1024%2C573&ssl=1" alt="" class="wp-image-10915" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=1024%2C573&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=300%2C168&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=768%2C430&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=1536%2C860&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=380%2C213&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=800%2C448&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=1160%2C650&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?resize=150%2C84&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/WhatsApp-Image-2024-10-20-at-13.58.16.jpeg?w=1600&ssl=1 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">From the 2024 Accel Euroscape: AI Eating Software (<a href="https://www.slideshare.net/slideshow/accel-2024-euroscape-ai-eating-software-1b24/272439657" data-type="link" data-id="https://www.slideshare.net/slideshow/accel-2024-euroscape-ai-eating-software-1b24/272439657">source</a>)</figcaption></figure>
<p>As <a href="https://www.linkedin.com/feed/update/urn:li:activity:7253369543262162944/" data-type="link" data-id="https://www.linkedin.com/feed/update/urn:li:activity:7253369543262162944/">Gil Dibner of Angular Ventures</a> put it, to succeed in this market as a startup, companies that raise inception capital (and their <span class="mywpglossary-term-def" data-title="early-stage" data-url="https://www.vccafe.com/startup-and-vc-glossary/#early-stage">early stage</span> investors like my firm, <a href="https://www.remagineventures.com">Remagine Ventures</a>) will need one or more of these competitive advantages to win:</p>
<ul class="wp-block-list">
<li>A genuine technical edge (rare but not impossible)</li>
<li>Deep domain expertise.</li>
<li>Durable distribution advantages.</li>
<li>Hyper complex products/roadmaps</li>
<li>Super painful sales cycles</li>
<li>Willingness to out-hustle literally everyone on a shoestring</li>
</ul>
<p>So, in the current point in time, there’s no real reason for most companies today to train a new model unless they’re truly going for AGI. They can fine tune, calibrate and train custom models as described in the bottom part of the Menlo Ventures “<a href="https://menlovc.com/perspective/the-modern-ai-stack-design-principles-for-the-future-of-enterprise-ai-architectures/" data-type="link" data-id="https://menlovc.com/perspective/the-modern-ai-stack-design-principles-for-the-future-of-enterprise-ai-architectures/"><strong>Modern AI tech stack</strong></a>” image below, but there’s no need to add another foundational model (unless you have very deep pockets like SSI Inc.).<br /></p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="504" data-attachment-id="10913" data-permalink="https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/ai_maturity_curve_has_changed-cropped-scaled/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?fit=2560%2C1259&ssl=1" data-orig-size="2560,1259" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="ai_maturity_curve_has_changed-cropped-scaled" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?fit=300%2C148&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?fit=1024%2C504&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=1024%2C504&ssl=1" alt="" class="wp-image-10913" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=1024%2C504&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=300%2C148&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=768%2C378&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=1536%2C755&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=2048%2C1007&ssl=1 2048w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=380%2C187&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=800%2C393&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=1160%2C570&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?resize=150%2C74&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?w=2560&ssl=1 2560w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/ai_maturity_curve_has_changed-cropped-scaled-1.webp?w=2400&ssl=1 2400w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="576" data-attachment-id="10912" data-permalink="https://www.vccafe.com/2024/10/20/what-comes-after-llms-for-vc-investments/modern_ai_stack-market_map-020724-scaled/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?fit=2560%2C1440&ssl=1" data-orig-size="2560,1440" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="modern_ai_stack-market_map-020724-scaled" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?fit=300%2C169&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?fit=1024%2C576&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=1024%2C576&ssl=1" alt="" class="wp-image-10912" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=1024%2C576&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=300%2C169&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=768%2C432&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=1536%2C864&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=2048%2C1152&ssl=1 2048w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=380%2C214&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=800%2C450&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=1160%2C653&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?resize=150%2C84&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?w=2560&ssl=1 2560w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/modern_ai_stack-market_map-020724-scaled-1.webp?w=2400&ssl=1 2400w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption"><strong>The Modern AI Stack – </strong>Menlo Ventures (<a href="https://menlovc.com/perspective/the-modern-ai-stack-design-principles-for-the-future-of-enterprise-ai-architectures/" data-type="link" data-id="https://menlovc.com/perspective/the-modern-ai-stack-design-principles-for-the-future-of-enterprise-ai-architectures/">source</a>)</figcaption></figure>
<h2 id="if-not-llms-where-will-the-value-accrue-in-generative-ai" class="wp-block-heading">If not LLMs, where will the value accrue in Generative AI?</h2>
<p>But the challenges in LLMs don’t remotely mean that AI is dead. So where should VC investors place their bets? <a href="https://fortune.com/2024/10/18/next-wave-ai-llms-investor-focus-tech" data-type="link" data-id="https://fortune.com/2024/10/18/next-wave-ai-llms-investor-focus-tech">A recent article by Vivek Wadhwa published in Fortune</a> suggests 4 key areas:</p>
<ul class="wp-block-list">
<li><strong>Neurosymbolic AI:</strong> Combining neural networks with symbolic AI to enable true understanding and reasoning. Such progress could help AI systems better handle multi-step reasoning and systematic problem analysis (a space being tackled by autonomous AI agents).</li>
<li><strong>Efficient AI models:</strong> Smaller, more scalable models that are less resource-intensive. Rather than ‘one model to rule them all’, the next wave of AI innovation may focus on making models smarter, more efficient, and problem or vertical specific. Vertical AI and fine tuning of <span class="mywpglossary-term-def" data-title="vision" data-url="https://www.vccafe.com/startup-and-vc-glossary/#vision">vision</span> models for a specific task is a step in that direction. </li>
<li><strong>Context-aware AI:</strong> Improving AI’s ability to maintain context in conversations for more meaningful interactions. Current language models often struggle to maintain consistency across longer conversations – similar to talking with someone who has short-term memory issues. </li>
<li><strong>Ethical and Explainable AI:</strong> Addressing bias, misinformation, and potential misuse to ensure responsible AI development. Embedding ethical considerations directly into AI systems can help deliver more responsible, nuanced recommendations – particularly crucial when AI assists with life-impacting decisions in fields like healthcare, legal sentencing, or educational assessment</li>
</ul>
<p>The current pace of innovation has been relentless and investment has promptly followed. A lot of it has been driven by FOMO, as Sequoia pointed out in their “<a href="https://www.sequoiacap.com/article/ais-600b-question/" data-type="link" data-id="https://www.sequoiacap.com/article/ais-600b-question/">AI’s $600 billion question”</a> But the cracks are starting to show, and we’re starting to see how applications, and the above trends are extending the promise of AI beyond LLMs.</p>]]></content:encoded>
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<title>Weekly #FIRGUN Newsletter – October 18 2024</title>
<link>https://www.vccafe.com/2024/10/18/weekly-firgun-newsletter-october-18-2024/</link>
<comments>https://www.vccafe.com/2024/10/18/weekly-firgun-newsletter-october-18-2024/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Fri, 18 Oct 2024 13:27:34 +0000</pubDate>
<category><![CDATA[Firgun]]></category>
<category><![CDATA[Cyera]]></category>
<category><![CDATA[Early AI]]></category>
<category><![CDATA[Inshur]]></category>
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<category><![CDATA[Kan]]></category>
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<category><![CDATA[Leumitech]]></category>
<category><![CDATA[Lidwave]]></category>
<category><![CDATA[M&A]]></category>
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<description><![CDATA[The original version of this post was published on Linkedin. ]]></description>
<content:encoded><![CDATA[<p id="ember521">It’s <strong>#Firgun</strong> time.</p>
<p id="ember522">The word “Firgun” (pronounced ‘feer-goon’) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which describes genuine, unselfish delight or pride in the accomplishment of the other person. It’s the opposite of “schadenfreude”. Firgun is all about genuinely feeling and expressing happiness, pride, or admiration for someone else’s accomplishments, good fortune, or well-being. More about Firgun and why it matters on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a>: <a href="https://lnkd.in/dg2a86p">https://lnkd.in/dg2a86p</a></p>
<p id="ember523">Yahya Sinwar, a key figure behind the deadliest terror attack on Israel, is dead. His death could mark a significant shift in the ongoing war. Sinwar orchestrated the massacre of over 1,200 Israelis on October 7th and while his death brings some closure, the 101 hostages remain a priority. We must continue to do everything we can to #BRINGTHEMHOME.</p>
<p id="ember524">During the first 9 months of 2024 Israeli startups raised $7.4 billion in 330 deals. The number of new Israeli unicorns is growing again after decreasing since 2021. In Q1–Q3/2024, six new Israeli unicorns were created, compared to only 4 in the whole of 2023. M&A in the first 9 months of 2024 reached $12.9 billion(!). It’s crazy to think that all of this happened during a war, may it soon finish.</p>
<p id="ember525">This week in tech, Elon Musk’s <a href="https://www.linkedin.com/company/spacex/">SpaceX</a> accomplished a historic feat, catching a 19-story tall rocket booster (aka Super Heavy booster), in mid-air with Mechazilla chopsticks (see video below). It is a big <span class="mywpglossary-term-def" data-title="milestone" data-url="https://www.vccafe.com/startup-and-vc-glossary/#milestone">milestone</span> of the way to Mars. <a href="https://www.linkedin.com/company/nvidia/">NVIDIA</a> launched <a href="https://build.nvidia.com/nvidia/llama-3_1-nemotron-70b-instruct">a new open source 70B model</a> that beats GPT-4o and Claude 3.5 Sonnet and a <a href="https://blogs.nvidia.com/blog/ai-decoded-flux-one/">new visual model</a> that is 15x faster than flux. <a href="https://www.linkedin.com/company/adobe/">Adobe</a> launched its <a href="https://news.adobe.com/news/2024/10/101424-adobe-launches-firefly-video-model" data-type="link" data-id="https://news.adobe.com/news/2024/10/101424-adobe-launches-firefly-video-model">Firefly AI video model</a>, <a href="https://www.linkedin.com/company/google/">Google</a> <a href="https://blog.google/technology/ai/notebooklm-update-october-2024/">launched new features</a> for its increasingly popular NotebookLM. <a href="https://www.linkedin.com/company/perplexity-ai/">Perplexity</a> now lets users <a href="https://www.perplexity.ai/hub/blog/introducing-internal-knowledge-search-and-spaces?fob=Xyg4NxPuzPPEYtZ6">search their internal files</a> alongside web content.</p>
<p id="ember526">Happy Sukkot to everyone who is celebrating. According to Judaism, it is a commandment to rejoice in this holiday, so let’s try!</p>
<h2 class="wp-block-heading" id="ember527"><span id="quote-of-the-week">QUOTE OF THE WEEK</span></h2>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>“Change is the law of life. And those who look only to the past or present are certain to miss the future.” – </p>
<cite>John F. Kennedy</cite></blockquote>
<h2 class="wp-block-heading" id="ember529"><span id="new-funding-rounds">NEW FUNDING ROUNDS</span></h2>
<ul class="wp-block-list">
<li>Congratulations <a href="https://www.linkedin.com/in/zohar-einy/">Zohar Einy</a> and team <a href="https://www.linkedin.com/company/getport/">Port IO</a> on your $35M <span class="mywpglossary-term-def" data-title="series-b" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-b">series B</span> to transform the developer experience with a portal that brings the entire team together.</li>
<li>Way to go <a href="https://www.linkedin.com/in/itamar-kunik/">Itamar Kunik</a> and team <a href="https://www.linkedin.com/company/monogoto/">Monogoto</a> on your $27M <span class="mywpglossary-term-def" data-title="series-a" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-a">series A</span> to offer software-defined connectivity services that simplify the connection process for organisations and developers!</li>
<li>Good stuff <a href="https://www.linkedin.com/in/dan-bratshpis/">Dan Bratshpis</a> and team <a href="https://www.linkedin.com/company/inshur/">INSHUR</a> on raising $19M in a new round of funding to make sure insurance coverage is fair and accessible for <span class="mywpglossary-term-def" data-title="on-demand" data-url="https://www.vccafe.com/startup-and-vc-glossary/#on-demand">on-demand</span> economy drivers!</li>
<li>Well done <a href="https://www.linkedin.com/in/yehuda-vidal/">Yehuda Vidal</a> and team <a href="https://www.linkedin.com/company/lidwaveil/">Lidwave</a> on your $10M seed round for your 4D coherent Lidar-on-chip technology that treats light as a wave, rather than using traditional photon counting!</li>
<li>Kudos <a href="https://www.linkedin.com/in/omridekalo/">Omri Dekalo</a> and team <a href="https://www.linkedin.com/company/ubeya/">Ubeya</a> on your $10M <span class="mywpglossary-term-def" data-title="series-a" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-a">series A</span> for your flexible workforce management marketplace for events!</li>
<li>Mazal tov <a href="https://www.linkedin.com/in/sharonyb/">Sharon Barr</a> and team <a href="https://www.linkedin.com/company/earlyai/">Early</a> on your $5M seed round for your Test AI agent, automatically generating working tests to help developers detect and fix bugs early in the development <span class="mywpglossary-term-def" data-title="cycle" data-url="https://www.vccafe.com/startup-and-vc-glossary/#cycle">cycle</span>!</li>
<li>Kol hakavod <a href="https://www.linkedin.com/in/talbo/">Tal Borenstein</a> and team <a href="https://www.linkedin.com/company/keepalerting/">Keep</a> on securing a $2.7M seed round for your open-source alert management & AIOps <span class="mywpglossary-term-def" data-title="platform" data-url="https://www.vccafe.com/startup-and-vc-glossary/#platform">Platform</span>!</li>
</ul>
<h2 class="wp-block-heading" id="ember538"><span id="exits">EXITS</span></h2>
<ul class="wp-block-list">
<li>Big congrats to <a href="https://www.linkedin.com/in/zohar-vittenberg-8a06091aa/">Zohar Vittenberg</a> and team Trail Security, developer of Data Loss Prevention tech, which was acquired by Israeli <span class="mywpglossary-term-def" data-title="unicorn" data-url="https://www.vccafe.com/startup-and-vc-glossary/#unicorn">unicorn</span> <a href="https://www.linkedin.com/company/cyera/">Cyera</a> for $162M BEFORE coming out of stealth!</li>
</ul>
<h2 class="wp-block-heading" id="ember541"><span id="links-for-your-browser">LINKS FOR YOUR BROWSER</span></h2>
<p id="ember542"><strong>Israel:</strong></p>
<ol class="wp-block-list">
<li><a href="https://docsend.com/view/f794p7ip2iwtjtm6">Israeli tech review Q3 2024</a> – report by <a href="https://www.linkedin.com/company/ivc-data-and-insights/">IVC Data and Insights</a></li>
<li><a href="https://www.710360.kan.org.il/en">? The digital memorial project of October 7th</a> – an impressive documentation, bringing the testimonies of Israelis that experienced that day. By <a href="https://www.linkedin.com/company/kan---israeli-publish-broadcasting-corporation/">KAN – Israeli Public Broadcasting Corporation</a></li>
<li><a href="http://spklr.io/6046vq5I">Israel economic retrospective</a> – report by <a href="https://www.linkedin.com/company/jefferies/">Jefferies</a></li>
</ol>
<p id="ember544"><strong>Global:</strong></p>
<ol class="wp-block-list">
<li><a href="https://docsend.com/view/kc6vga56adewfjhc">?? The booming Voice AI landscape – a VC perspective</a> – by me on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a></li>
<li><a href="https://news.crunchbase.com/venture/q3-2024-funding-recap-charts/">These 10 Charts Show Startup Funding Downturn Continues Despite AI’s Ascent</a> – by <a href="https://www.linkedin.com/company/crunchbase/">Crunchbase</a></li>
<li><a href="https://docsend.com/view/qhk4i25ccnnh8hcr">State of AI report 2024</a> – by <a href="https://www.linkedin.com/company/air-street-capital/">Air Street Capital</a></li>
</ol>
<h2 class="wp-block-heading" id="ember546"><span id="media-of-the-week">MEDIA OF THE WEEK</span></h2>
<p id="ember547">U.S. acquisitions dominated Israeli M&A deal-making in Q1-Q3/2024, with a total deal sum of $8.5 billion (across 41 deals). 16 mega-M&As (larger than $100m) were made by U.S. acquirers, compared to 10 deals in the entire 2023. <a href="https://docsend.com/view/mpbyih5uzvg5r5dd">Read the full report</a> by <a href="https://www.linkedin.com/company/leumitech/">LeumiTech</a> and IVC.</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFefD_a3OIpEg/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729246809959?e=1734566400&v=beta&t=3EQKZZnMQHtAliYFkyejt9KXvQk9BJz1DqV3UXhbjwE" alt=""/><figcaption class="wp-element-caption">M&A of Israeli startups in the first 3 quarters of 2024 reached $12.9 billion during the war</figcaption></figure>
<p id="ember550">Israel ranks 9th in the 2024 Global AI index by <a href="https://www.linkedin.com/company/tortoisemedia/">Tortoise Media</a> (<a href="https://www.tortoisemedia.com/intelligence/global-ai/">source</a>)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEc7iA5Fydx7w/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729245106379?e=1734566400&v=beta&t=kL0f6WVqewhxukMr4-0DdtAYdcY3_OyZnIVTgwrFtfs" alt=""/></figure>
<p id="ember552">Accel’s 2024 Euroscape – a list of the their top 100 AI and Cloud companies emerging from Europe and Israel. Great to see so many Israeli startups represented (<a href="https://www.slideshare.net/slideshow/accel-2024-euroscape-ai-eating-software-1b24/272439657">source</a>)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQGBwDZe7rosDg/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729245297317?e=1734566400&v=beta&t=7bt3ahGcCGjjSWkDO8SQwoZlUpaZVW9cECcU4aI0tp8" alt=""/><figcaption class="wp-element-caption">2024 Accel Euroscape</figcaption></figure>
<p id="ember554">An excerpt from the <a href="https://a16zcrypto.com/posts/article/state-of-crypto-report-2024/">State of Crypto report 2024</a> – by <a href="https://www.linkedin.com/company/a16z/">Andreessen Horowitz</a></p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFX8-sGt4gD1A/article-inline_image-shrink_1000_1488/article-inline_image-shrink_1000_1488/0/1729249644907?e=1734566400&v=beta&t=4D05FrYV8A7qItzQ48QbJ_UTydJOYjQfJTtaEQydwWA" alt=""/></figure>
<p id="ember556">Several companies are trying to help users capture their brain with AI. A16Z put a short list. (<a href="https://a16z.com/export-your-brain-with-ai/">source</a>) – Notably missing: Israeli startup <a href="https://www.linkedin.com/company/kai-ai-coach/">Kai.ai</a></p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQGG_gWaVnMi_g/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729249196745?e=1734566400&v=beta&t=TYijK85HQaEdI3-3njvRLKB5B6wAsJ8gxbgC1BQoinI" alt=""/></figure>
<p id="ember558">A nice infographic of AI sales tools by Capgemini.</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFj9d1HmgBjOg/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1729249361844?e=1734566400&v=beta&t=yboj89VkrRzaEs1K-WOo-J6x0XLoI3F4wdVgziroeG8" alt=""/></figure>
<p id="ember561">A historic moment in space exploration. The 400ft rocket blasted off at sunrise, completing its fight, and separated its first stage booster, which was caught back on the pad to applause from the team. Read more <a href="http://apne.ws/BBPUIPL" data-type="link" data-id="http://apne.ws/BBPUIPL">here</a></p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="WATCH: SpaceX catches Starship rocket booster back at the launch pad" width="1200" height="675" src="https://www.youtube.com/embed/nVNIoQUcFI4?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p id="ember562">Someone created the ultimate cheating machine by connecting ChatGPT to a <a href="https://www.linkedin.com/company/texas-instruments/">Texas Instruments</a> calculator</p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="I Made The Ultimate Cheating Device" width="1200" height="675" src="https://www.youtube.com/embed/Bicjxl4EcJg?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p id="ember563">The image below is satirical. But it’s sad that I need to tell you that.</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHi2hoypyfGjw/article-inline_image-shrink_1000_1488/article-inline_image-shrink_1000_1488/0/1729247756798?e=1734566400&v=beta&t=xblFEb3AedvL9MgmORH-R3ft8w8lCoWwCcMtPaPwqOE" alt=""/><figcaption class="wp-element-caption">The image above is satire (in case you were confused)</figcaption></figure>
<p id="ember566">That’s all for this week, thank you for reading.</p>
<p id="ember567">There’s a lot to celebrate in our “small” community! Keep on creating! </p>
<p>To sign up for the newsletter on Linkedin – <a href="https://www.linkedin.com/build-relation/newsletter-follow?entityUrn=6954740769651871744" data-type="link" data-id="https://www.linkedin.com/build-relation/newsletter-follow?entityUrn=6954740769651871744">follow this link</a>. </p>]]></content:encoded>
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<post-id xmlns="com-wordpress:feed-additions:1">10894</post-id> <enclosure length="2473811" type="application/pdf" url="http://spklr.io/6046vq5I"/><itunes:explicit>no</itunes:explicit><itunes:subtitle>The original version of this post was published on Linkedin.</itunes:subtitle><itunes:summary>The original version of this post was published on Linkedin.</itunes:summary><itunes:keywords>Firgun, Cyera, Early AI, Inshur, ivc, Kan, Keep, Leumitech, Lidwave, M&A, Monogoto, Port IO, Trail Security, Ubeya</itunes:keywords></item>
<item>
<title>The Booming Voice AI Landscape: A VC Perspective</title>
<link>https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/</link>
<comments>https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Wed, 16 Oct 2024 18:13:58 +0000</pubDate>
<category><![CDATA[AI Agents]]></category>
<category><![CDATA[Generative AI]]></category>
<category><![CDATA[Voice AI]]></category>
<category><![CDATA[AI agents]]></category>
<category><![CDATA[generative AI]]></category>
<category><![CDATA[synthetic media]]></category>
<category><![CDATA[text to speech]]></category>
<category><![CDATA[voice AI]]></category>
<category><![CDATA[voice cloning]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=10877</guid>
<description><![CDATA[Remember when talking to machines felt like science fiction? Those of you old enough to remember the ‘Google…]]></description>
<content:encoded><![CDATA[<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>Voice AI applications will unlock $10B of new software TAM over the next five years </p>
<cite>Bessemer Venture Partners</cite></blockquote>
</blockquote>
<p>Remember when talking to machines felt like science fiction? Those of you old enough to remember the ‘Google Duplex’ demo (which turned out to be fake) might recall the feeling of astonishment that tech can sound that natural. Well, that future is now knocking on our door. ChatGPT’s advanced voice mode and Eleven Labs are setting new benchmarks in conversational AI by enhancing voice quality and realism, NotebookLM’s natural voice podcast took the Internet by storm and new <span class="mywpglossary-term-def" data-title="open-source" data-url="https://www.vccafe.com/startup-and-vc-glossary/#open-source">open source</span> technologies are making high quality voice cloning easier than ever. </p>
<p>Like many tech breakthroughs, it’s bringing unprecedented opportunities for startups. As a VC watching this space, I’m seeing a perfect storm brewing: massive investment, breakthrough technologies, and untapped markets ripe for disruption. But it’s also not free of challenges – from powerful incumbents to questions about the dark side of these technologies.</p>
<p>In this post I tried to collate the best thinking about Voice AI, standing on the shoulders of research published by Lightspeed, A16Z, Bessemer and others and bringing examples that I found compelling. If you get chance, watch some of the videos to get a sense on how far the technology got. Let’s dive in! </p>
<h2 id="the-state-of-play-voice-ai-in-2024" class="wp-block-heading">The State of Play: Voice AI in 2024</h2>
<p>In 2024, about a third of all venture capital funding has been going into AI companies. Most of that investment (dollar wise) has been going to companies building foundational AI models raised over $23 billion, with voice technology being a key beneficiary. This includes OpenAI’s latest round of $6.6 billion (largest VC round in history). But substantial investments are also being deployed into emerging startups, particularly into vertical applications. This trend is evident in the success of companies like <a href="https://www.deepl.com/en/translator" data-type="link" data-id="https://www.deepl.com/en/translator"><strong>DeepL</strong></a> (translation), <a href="https://www.speak.com/" data-type="link" data-id="https://www.speak.com/"><strong>Speak</strong></a> (language learning), and <a href="https://www.retellai.com/" data-type="link" data-id="https://www.retellai.com/"><strong>Retell AI</strong></a> (call centres). <a href="https://sierra.ai/" data-type="link" data-id="https://sierra.ai/"><strong>Sierra AI</strong></a>, founded by Bret Taylor (former co-CEO of Salesforce, CTO of Facebook and current chairman of OpenAI) is currently raising <a href="https://www.theinformation.com/articles/bret-taylors-ai-agent-startup-nears-deal-that-could-value-it-at-over-4-billion" data-type="link" data-id="https://www.theinformation.com/articles/bret-taylors-ai-agent-startup-nears-deal-that-could-value-it-at-over-4-billion">hundreds of millions</a> of dollars at $4 billion <span class="mywpglossary-term-def" data-title="valuation" data-url="https://www.vccafe.com/startup-and-vc-glossary/#valuation">valuation</span>, just a year or so from launch after unlocking AI voice agents for companies. </p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="579" data-attachment-id="10879" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/screenshot-2024-10-16-at-16-10-55/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?fit=1214%2C686&ssl=1" data-orig-size="1214,686" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Screenshot 2024-10-16 at 16.10.55" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?fit=300%2C170&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?fit=1024%2C579&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=1024%2C579&ssl=1" alt="" class="wp-image-10879" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=1024%2C579&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=300%2C170&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=768%2C434&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=380%2C215&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=800%2C452&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=1160%2C655&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?resize=150%2C85&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.10.55.png?w=1214&ssl=1 1214w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">For the second quarter in a row, AI was the top sector by venture dollars invested. And funding to AI companies has grown this year not just in terms of absolute dollars invested, but also proportion. (source: <a href="https://news.crunchbase.com/venture/q3-2024-funding-recap-charts/" data-type="link" data-id="https://news.crunchbase.com/venture/q3-2024-funding-recap-charts/">Crunchbase</a>)</figcaption></figure>
<p>But what’s more interesting is how the technology is being deployed. First, It’s worth taking a look at the most updated landscapes and then dive into the trends.</p>
<p>The latest landscape in the Voice AI space was published by <strong>Lightspeed</strong>. It provides a comprehensive overview of the current state of voice technology and how it developed over time. </p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="576" data-attachment-id="10880" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/voice-ai-market-map-4/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?fit=1920%2C1080&ssl=1" data-orig-size="1920,1080" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Voice-AI-market-map-4" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?fit=300%2C169&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?fit=1024%2C576&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=1024%2C576&ssl=1" alt="" class="wp-image-10880" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=1024%2C576&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=300%2C169&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=768%2C432&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=1536%2C864&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=380%2C214&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=800%2C450&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=1160%2C653&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?resize=150%2C84&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Voice-AI-market-map-4.webp?w=1920&ssl=1 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<p>Another deep dive on Voice AI was recently <a href="https://gamma.app/docs/a16z-Real-Time-Conversational-Voice-AI--m3v486p98gt7jol?mode=doc#card-v4b454b5rc8z4wv" data-type="link" data-id="https://gamma.app/docs/a16z-Real-Time-Conversational-Voice-AI--m3v486p98gt7jol?mode=doc#card-v4b454b5rc8z4wv">published by <strong>A16Z</strong></a>, with a particular focus on voice AI agents and the desire to automate/reinvent the phone call. It’s particularly interesting to think about voice AI in terms of the <span class="mywpglossary-term-def" data-title="tech-stack" data-url="https://www.vccafe.com/startup-and-vc-glossary/#tech-stack">tech stack</span> needed to <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> the voice engines, but note that the application layer (for both B2B and B2C apps) sits on top of the <span class="mywpglossary-term-def" data-title="tech-stack" data-url="https://www.vccafe.com/startup-and-vc-glossary/#tech-stack">tech stack</span> doesn’t require to <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> the full infrastructure. </p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="566" data-attachment-id="10882" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/screenshot-2024-10-16-at-16-44-29/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?fit=1744%2C964&ssl=1" data-orig-size="1744,964" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Screenshot 2024-10-16 at 16.44.29" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?fit=300%2C166&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?fit=1024%2C566&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=1024%2C566&ssl=1" alt="" class="wp-image-10882" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=1024%2C566&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=300%2C166&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=768%2C425&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=1536%2C849&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=380%2C210&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=800%2C442&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=1160%2C641&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?resize=150%2C83&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/Screenshot-2024-10-16-at-16.44.29.png?w=1744&ssl=1 1744w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">Voice AI <span class="mywpglossary-term-def" data-title="tech-stack" data-url="https://www.vccafe.com/startup-and-vc-glossary/#tech-stack">tech stack</span> – by A16Z</figcaption></figure>
<p>The landscape is still relatively small, but growing. On the B2B side, Business voice applications have progressed significantly, from rudimentary interactive voice response (IVR) systems in the 1970s to sophisticated conversational AI systems powered by LLMs. Large players entering the AI agent space are starting to acquire companies in this space (or <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> their own solutions). In the landscape below, Israeli startup <a href="https://www.reuters.com/markets/deals/salesforce-acquire-ai-voice-agent-firm-tenyx-joining-ai-talent-race-2024-09-03/" data-type="link" data-id="https://www.reuters.com/markets/deals/salesforce-acquire-ai-voice-agent-firm-tenyx-joining-ai-talent-race-2024-09-03/">Tenyx was recently acquired by Salesforce</a> for an undisclosed sum.</p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="757" data-attachment-id="10883" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/b2b-voice-agents-market-map/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?fit=1456%2C1077&ssl=1" data-orig-size="1456,1077" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="B2B Voice Agents – market map" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?fit=300%2C222&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?fit=1024%2C757&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=1024%2C757&ssl=1" alt="" class="wp-image-10883" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=1024%2C757&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=300%2C222&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=768%2C568&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=380%2C281&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=800%2C592&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=1160%2C858&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?resize=150%2C111&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2B-Voice-Agents-market-map.webp?w=1456&ssl=1 1456w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<p>On the B2C side, with advancements in real-time conversational AI, businesses can now deliver seamless, interactive voice experiences that feel increasingly natural and personalised. For example Speak and Praktika, which use voice AI for language learning, <a href="https://techcrunch.com/2024/05/22/praktika-raises-35-5m-to-use-ai-avatars-to-make-learning-languages-feel-more-natural/" data-type="link" data-id="https://techcrunch.com/2024/05/22/praktika-raises-35-5m-to-use-ai-avatars-to-make-learning-languages-feel-more-natural/">grew very quickly</a> to over $20M in revenue in the last 12 months. </p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="733" data-attachment-id="10884" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/b2c-agents-market-map-a16z/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?fit=1456%2C1042&ssl=1" data-orig-size="1456,1042" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="B2C agents – market map – A16Z" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?fit=300%2C215&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?fit=1024%2C733&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=1024%2C733&ssl=1" alt="" class="wp-image-10884" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=1024%2C733&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=300%2C215&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=768%2C550&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=380%2C272&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=800%2C573&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=1160%2C830&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?resize=150%2C107&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/B2C-agents-market-map-A16Z.webp?w=1456&ssl=1 1456w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<p><br /><br /><a href="https://www.bvp.com/atlas/state-of-the-cloud-2024" data-type="link" data-id="https://www.bvp.com/atlas/state-of-the-cloud-2024"><strong>Bessemer</strong> makes a bold prediction</a> that Voice AI applications will drive $10 billion in new software TAM over the next five years. While early Voice AI companies focused on Automatic Speech Recognition (ASR), a new generation is emerging with conversational voice solutions that handle repetitive tasks. These advancements enable professionals in sales, recruiting, customer support, and administrative roles to concentrate on more strategic, high-value activities.</p>
<figure class="wp-block-image size-large"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="576" data-attachment-id="10885" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/sotc2024_voiceai_market-map-of-multimodal-innovation-july-15-2024-min/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?fit=1600%2C900&ssl=1" data-orig-size="1600,900" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?fit=300%2C169&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?fit=1024%2C576&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=1024%2C576&ssl=1" alt="" class="wp-image-10885" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=1024%2C576&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=300%2C169&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=768%2C432&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=1536%2C864&ssl=1 1536w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=380%2C214&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=800%2C450&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=1160%2C653&ssl=1 1160w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?resize=150%2C84&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/SOTC2024_VoiceAI_Market-map-of-multimodal-innovation-July-15-2024-min.png?w=1600&ssl=1 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption class="wp-element-caption">State of the cloud 2024 by Bessemer</figcaption></figure>
<h2 id="emerging-trends-in-voice-ai" class="wp-block-heading">Emerging trends in Voice AI </h2>
<p><strong>Real time AI Audio Agents and live conversations</strong> – which coincided with the launch of its OpenAI’s <a href="https://www.cnbc.com/2024/09/24/how-to-use-chatgpt-advanced-voice-mode-from-openai.html" data-type="link" data-id="https://www.cnbc.com/2024/09/24/how-to-use-chatgpt-advanced-voice-mode-from-openai.html">Advanced Voice Mode</a>, enables users to have a real time voice conversation with the chatbot, and even get it to sing. I’ve yet to try it personally, but the demos I’ve seen online have been very impressive. Another example is the startup <a href="https://www.bland.ai/" data-type="link" data-id="https://www.bland.ai/"><strong>Bland AI</strong></a>, a startup that can handle sales and customer service </p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="Bland AI is a startup that can handle sales and customer support calls" width="1200" height="675" src="https://www.youtube.com/embed/r_Iy0xZ1CYY?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
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<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="OpenAI rolls out Advanced Voice Mode for ChatGPT | TechCrunch" width="1200" height="675" src="https://www.youtube.com/embed/-jVOl7pNoJM?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
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<p>Google’ is building a real-time voice assistant called <a href="https://www.theverge.com/2024/5/14/24156296/google-ai-gemini-astra-assistant-live-io" data-type="link" data-id="https://www.theverge.com/2024/5/14/24156296/google-ai-gemini-astra-assistant-live-io">Project Astra</a>, which aims to deliver real time multi modal user interaction by seeing the world and communicating with the user in natural language. Imagine if Siri and Alexa could do this? </p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="Project Astra: Our vision for the future of AI assistants" width="1200" height="675" src="https://www.youtube.com/embed/nXVvvRhiGjI?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
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<p><strong><span class="mywpglossary-term-def" data-title="multi-modal" data-url="https://www.vccafe.com/startup-and-vc-glossary/#multi-modal">Multi-Modal</span> Innovation</strong> The integration of voice with other AI capabilities is creating new possibilities. OpenAI’s voice mode isn’t just about speech – it’s about natural, contextual conversations. Google’s <a href="https://illuminate.google.com/home" data-type="link" data-id="https://illuminate.google.com/home">Illuminate</a> and <a href="https://notebooklm.google.com/" data-type="link" data-id="https://notebooklm.google.com/">NotebookLM</a> are great examples of taking content that is primarily text and making into human sounding podcast/voice conversation between two people.</p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="AI Podcast Hosts Discover They’re AI, Not Human - NotebookLM" width="1200" height="675" src="https://www.youtube.com/embed/AR4dRtzFvxM?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p><strong>Democratisation of Voice Tech Tools</strong>: <a href="https://elevenlabs.io/" data-type="link" data-id="https://elevenlabs.io/"><strong>ElevenLabs</strong></a>, the leader in the space, is pushing boundaries in voice synthesis, making AI characters sound increasingly human and available to any developer via API. The company is 2 years old and is reportedly doing <a href="https://techcrunch.com/2024/10/03/investors-are-scrambling-to-get-into-elevenlabs-which-may-soon-be-valued-at-3-billion/" data-type="link" data-id="https://techcrunch.com/2024/10/03/investors-are-scrambling-to-get-into-elevenlabs-which-may-soon-be-valued-at-3-billion/">$80M ARR per TechCrunch</a>. </p>
<p>Another example is<strong> <a href="https://cartesia.ai/" data-type="link" data-id="https://cartesia.ai/">Cartesia AI</a></strong>. It enables creating real-time, <span class="mywpglossary-term-def" data-title="multi-modal" data-url="https://www.vccafe.com/startup-and-vc-glossary/#multi-modal">multi-modal</span> AI systems that can <span class="mywpglossary-term-def" data-title="function" data-url="https://www.vccafe.com/startup-and-vc-glossary/#function">function</span> independently of cloud connectivity, thereby enhancing privacy and reducing <span class="mywpglossary-term-def" data-title="latency" data-url="https://www.vccafe.com/startup-and-vc-glossary/#latency">latency</span>.</p>
<p>What once required massive resources can now be accomplished with open-source tools and modest computing power. A case in point, Ethan Mollick recently shared a thread on how he cloned his voice using e2-f5-tts running locally (using Pinokio) with only 10 seconds of original voice recording. This democratisation is driving innovation at the edges. Think about the products and services people can come up with next.</p>
<figure class="wp-block-embed aligncenter is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><p lang="en" dir="ltr">You really, really should not trust audio clips anymore<br><br>Even a couple months ago, it used to take a commercial service to clone a voice. No more. Here is me creating a voice clone of myself using just a 10 second reference clip on my home computer<br><br>This is all real time, no cuts <a href="https://t.co/0OlBcMcYbm">pic.twitter.com/0OlBcMcYbm</a></p>— Ethan Mollick (@emollick) <a href="https://twitter.com/emollick/status/1845619684709679517?ref_src=twsrc%5Etfw">October 14, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>
<p>The ElevenLabs Reader App. Listen to any article, PDF, ePub, or any text on the go with the highest quality AI voices.</p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="ElevenLabs Reader" width="1200" height="675" src="https://www.youtube.com/embed/d-2ktTBv_KY?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p><strong>Vertical Applications Taking Off.</strong> A large portion of the funding and innovation in voice AI is concentrated on applications for specific industry verticals. </p>
<ul class="wp-block-list">
<li>Healthcare (remote patient monitoring, mental health support) like <a href="https://www.suki.ai/" data-type="link" data-id="https://www.suki.ai/"><strong>Suki</strong></a> which <a href="https://www.reuters.com/technology/artificial-intelligence/healthcare-startup-suki-raises-70-million-build-ai-assistants-hospitals-2024-10-10/" data-type="link" data-id="https://www.reuters.com/technology/artificial-intelligence/healthcare-startup-suki-raises-70-million-build-ai-assistants-hospitals-2024-10-10/">raised $70M</a> earlier this month</li>
<li>Education (language learning, personalised tutoring) like <a href="https://www.speak.com/" data-type="link" data-id="https://www.speak.com/"><strong>Speak</strong></a>, which raised a Series B-3 round in July at a $500 million <span class="mywpglossary-term-def" data-title="valuation" data-url="https://www.vccafe.com/startup-and-vc-glossary/#valuation">valuation</span></li>
<li>Customer Service (intelligent voice agents) like <a href="https://www.ada.cx/platform/voice/" data-type="link" data-id="https://www.ada.cx/platform/voice/"><strong>Ada</strong></a></li>
<li>Entertainment (gaming, interactive content) such as <a href="https://www.volleygames.com/" data-type="link" data-id="https://www.volleygames.com/"><strong>Volley</strong></a>, which creates AI voice games and recently raised<a href="https://venturebeat.com/games/volley-raises-55m-voice-enabled-ai-games/" data-type="link" data-id="https://venturebeat.com/games/volley-raises-55m-voice-enabled-ai-games/"> $55M series C</a> or <a href="https://www.respeecher.com/" data-type="link" data-id="https://www.respeecher.com/"><strong>Respeecher AI</strong></a> which can change voices for AI filmmaking or help you <span class="mywpglossary-term-def" data-title="license" data-url="https://www.vccafe.com/startup-and-vc-glossary/#license">license</span> celebrity voices. </li>
</ul>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="Respeecher AI Audio Test | Changing Voices with AI Tools" width="1200" height="675" src="https://www.youtube.com/embed/iUe7WTCwgo4?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<h2 id="opportunities-for-startups-focusing-on-niche-solutions" class="wp-block-heading">Opportunities for Startups: Focusing on Niche Solutions</h2>
<p>Despite the dominance of giants like OpenAI and Google, <strong>startups have ample room to innovate by focusing on niches.</strong> Here’s where startups can find room to grow:</p>
<ul class="wp-block-list">
<li><strong>Industry Specialisation:</strong> Vertical AI applications are transforming industries by leveraging domain-specific data and AI models to address specialised use cases. This includes a wide range of verticals like In-car entertainment, hospitality, commerce, personal health, financial services etc. </li>
<li><strong>Agentic <span class="mywpglossary-term-def" data-title="automation" data-url="https://www.vccafe.com/startup-and-vc-glossary/#automation">Automation</span> for <span class="mywpglossary-term-def" data-title="enterprise" data-url="https://www.vccafe.com/startup-and-vc-glossary/#enterprise">Enterprise</span> Functions:</strong> Generative AI agents are being deployed to automate complex business processes across various functions. As A16Z pointed out, there’s a huge opportunity in automating phone calls, especially those that have a predictable flow, this can include: customer service (although this space is getting very crowded), sales and marketing, IT helpdesk, meeting management etc. Virtual employees for hire. </li>
<li><strong>Consumer Cloud Applications:</strong> Bessemer forecasts that AI-driven content, including voice, will dominate by 2030. AI is revitalising the consumer cloud market, creating opportunities for startups building applications that <span class="mywpglossary-term-def" data-title="leverage" data-url="https://www.vccafe.com/startup-and-vc-glossary/#leverage">leverage</span> voice and other modalities. From voice enabled content creation to social media or education, users are willing to pay for high quality interactions to either reduce loneliness or get entertained. Google paid $2.6 billion to re-hire the founders of Character.ai and I could see a voice enabled version of that <span class="mywpglossary-term-def" data-title="platform" data-url="https://www.vccafe.com/startup-and-vc-glossary/#platform">platform</span> coming up in the near future. Would you pay $1 to have a phone call with virtual Elon Musk? Napoleon? Mahatma Gandhi? </li>
<li><strong>Innovating on-device</strong> – On-device processing requires balancing performance with power consumption and device resources. As mentioned in the example of <strong>Cartesia</strong>, enabling users to access voice AI applications via the phone is crucial as it’s a natural way that consumers use voice and has the widest availability. That being said there are also opportunities in other connected devices like home assistants, TVs, watches, car entertainment etc. </li>
</ul>
<figure class="wp-block-image size-full"><img data-recalc-dims="1" loading="lazy" decoding="async" width="1024" height="1024" data-attachment-id="10890" data-permalink="https://www.vccafe.com/2024/10/16/the-booming-voice-ai-landscape-a-vc-perspective/ai-audio-startups/" data-orig-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?fit=1024%2C1024&ssl=1" data-orig-size="1024,1024" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="aI audio startups" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?fit=300%2C300&ssl=1" data-large-file="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?fit=1024%2C1024&ssl=1" tabindex="0" role="button" src="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=1024%2C1024&ssl=1" alt="" class="wp-image-10890" srcset="https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?w=1024&ssl=1 1024w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=300%2C300&ssl=1 300w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=150%2C150&ssl=1 150w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=768%2C768&ssl=1 768w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=80%2C80&ssl=1 80w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=110%2C110&ssl=1 110w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=380%2C380&ssl=1 380w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=800%2C800&ssl=1 800w, https://i0.wp.com/www.vccafe.com/wp-content/uploads/2024/10/aI-audio-startups.webp?resize=96%2C96&ssl=1 96w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
<h2 id="ethical-challenges-and-market-considerations" class="wp-block-heading">Ethical Challenges and Market Considerations</h2>
<p>The rapid growth of voice AI presents notable challenges:</p>
<ul class="wp-block-list">
<li><strong>Competition from AI Giants:</strong> Startups face competition from large, well-funded companies like OpenAI, Google, and Microsoft, which are developing sophisticated voice and translation models and have vast-amounts of data and distribution advantages. </li>
<li><strong>Technical hurdles:</strong> Ensuring the accuracy of speech recognition and language understanding is essential for reliable performance. Another component of this technical challenge is accuracy. AI voices that sound ‘robotic’ can be disappointing for users. </li>
<li><strong><span class="mywpglossary-term-def" data-title="latency" data-url="https://www.vccafe.com/startup-and-vc-glossary/#latency">Latency</span> and Cost:</strong> Training and deploying sophisticated voice models can be computationally expensive. Current architectures often involve multiple steps (speech to text, text processing, text to speech) that can introduce delays and make voice interactions costly. Reducing <span class="mywpglossary-term-def" data-title="latency" data-url="https://www.vccafe.com/startup-and-vc-glossary/#latency">latency</span> to sub-250 milliseconds is crucial for natural-sounding conversations</li>
<li><strong>Ethical and IP Concerns:</strong> With the proliferation of voice cloning and tokenised speech, startups must address ethical concerns proactively to ensure responsible development and deployment. There’s a fairly good chance that bad actors are using the latest voice technology for malicious purposes. </li>
<li><strong>Data Privacy and Security:</strong> Voice data is highly sensitive and subject to regulations like GDPR. Startups need to prioritise data security and privacy to maintain user trust and comply with legal requirements</li>
<li><strong>Managing Human-AI Interaction:</strong> Voice AI applications need to be designed to seamlessly hand off to human agents when necessary, for example in the case of health or customer service. It’s important to keep a human in the loop and maintain a high quality control. </li>
</ul>
<h2 id="a-call-to-action-innovating-in-voice-ai" class="wp-block-heading">A Call to Action: Innovating in Voice AI</h2>
<p>The voice AI revolution is unfolding, and startups operating at the application layer can benefit from a more robust infrastructure they can <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> on. This is a pivotal moment for startups to innovate, collaborate, and shape the future of voice technology.</p>
<p>At Remagine Ventures, we invest in pre-seed startups in Israel and UK. If you’re a founder building the future of AI Voice applications/agents, we’d love to hear from you. </p>]]></content:encoded>
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<item>
<title>Weekly #FIRGUN Newsletter – Oct 11 2024</title>
<link>https://www.vccafe.com/2024/10/14/weekly-firgun-newsletter-oct-11-2024/</link>
<comments>https://www.vccafe.com/2024/10/14/weekly-firgun-newsletter-oct-11-2024/#respond</comments>
<dc:creator><![CDATA[Eze Vidra]]></dc:creator>
<pubDate>Mon, 14 Oct 2024 20:47:18 +0000</pubDate>
<category><![CDATA[Firgun]]></category>
<category><![CDATA[Israel]]></category>
<category><![CDATA[kando]]></category>
<category><![CDATA[orasis]]></category>
<category><![CDATA[prime security]]></category>
<category><![CDATA[startups]]></category>
<category><![CDATA[technoplum]]></category>
<category><![CDATA[upstream bio]]></category>
<category><![CDATA[VC]]></category>
<category><![CDATA[yom kippur]]></category>
<guid isPermaLink="false">https://www.vccafe.com/?p=10873</guid>
<description><![CDATA[The word “Firgun” (pronounced ‘feer-goon’) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which…]]></description>
<content:encoded><![CDATA[<p id="ember10707">The word “Firgun” (pronounced ‘feer-goon’) is an informal modern Hebrew term and concept in Israeli culture (originally Yiddish), which describes genuine, unselfish delight or pride in the accomplishment of the other person. It’s the opposite of “schadenfreude”. Firgun is all about genuinely feeling and expressing happiness, pride, or admiration for someone else’s accomplishments, good fortune, or well-being. More about Firgun and why it matters on <a href="https://www.linkedin.com/company/vc-cafe/">VC Cafe</a>: <a href="https://lnkd.in/dg2a86p">https://lnkd.in/dg2a86p</a></p>
<p id="ember10708">Earlier this week, marked the one year anniversary of October 7th, one of the darkest days in Jewish history. We must remember the +1,200 victims, sadly, many of them young people and families, and not only remember, but also act swiftly for the release of the 101 Israeli host**es held in G**a, including women and children. We must #BRINGTHEMHOME Now.</p>
<p id="ember10709">Q3 2024 reports are starting to come out. One thing that caught my attention is that European venture funding in the first 9 months of 2024 was down 39% to $10B in Q3 2024, from $16.6B a year ago. By comparison, Israeli funding in the first 9 months of 2024 was UP 32%-40% according to preliminary reports by <a href="https://www.linkedin.com/company/ivc-data-and-insights/">IVC Data and Insights</a> and <a href="https://www.linkedin.com/company/leumitech/">LeumiTech</a>, compared the equivalent period in 2023 (pre-war). This is another example of how Israeli tech continues to deliver #NOMATTERWHAT.</p>
<p id="ember10710">In the wider tech world, it’s been another momentous week. The Nobel prizes in Chemistry and Physics were awarded to AI scientists and Google’s (<strong>Geoffrey Hinton, John Hopfield</strong> and<strong> Demis Hassabis)</strong> – is a testament of how AI is already impacting science. <a href="https://www.linkedin.com/company/tesla-motors/">Tesla</a> unveiled its Robotaxi, an autonomous electric taxi, and Optimus, its humanoid robot that will be able to perform tasks at home. <a href="https://www.linkedin.com/company/openai/">OpenAI</a> updated its revenue to $4 billion, but is on its way to losing $14 billion by 2026 according to <a href="https://www.linkedin.com/company/theinformation/">The Information</a>(yikes!). <a href="https://www.linkedin.com/company/meta/">Meta</a> previewed a new ‘<a href="https://ai.meta.com/blog/movie-gen-media-foundation-models-generative-ai-video/">Movie Gen</a>’ AI video creation tool, <a href="https://www.linkedin.com/company/google/">Google</a> launched <a href="https://support.google.com/merchants/answer/15400787?hl=en">video generation tools</a> in Google Shopping’s product studio and also now you can <a href="https://www.theverge.com/2024/10/3/24259759/google-lens-search-video-ai-launch">search by video</a>, <a href="https://www.linkedin.com/company/huggingface/">Hugging Face</a> released <a href="https://www.gradio.app/guides/creating-a-chatbot-fast">OpenAI-Gradio</a>, a new tool enabling the creation of AI-powered web apps using OpenAI’s models in just minutes with minimal code.</p>
<p id="ember10711">Less talked about is that the US is being ravaged by Hurricane Milton, which is estimated to cause $175B in damages. Hoping that people are safe and that the storm passes quickly. This evening marks the beginning of Yom Kippur, the Jewish day of atonement. I’d like to wish a Gmar Hatima tova and easy fast for those observing.</p>
<h2 class="wp-block-heading" id="ember10713"><span id="quote-of-the-week">QUOTE OF THE WEEK</span></h2>
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">
<p>“In the midst of chaos, there is also opportunity.” — Sun Tzu</p>
</blockquote>
<h2 class="wp-block-heading" id="ember10715"><span id="new-funding-rounds">NEW FUNDING ROUNDS</span></h2>
<ul class="wp-block-list">
<li>Congratulations <a href="https://www.linkedin.com/in/elad-kedar-01659a/">Elad Kedar</a> and team <a href="https://www.linkedin.com/company/orasis-pharmaceuticals/">Orasis Pharmaceuticals</a> on the $78M series D to help presbyopes seeking a break from reading glasses!</li>
<li>Kudos <a href="https://www.linkedin.com/in/ari-goldfarb-7a475616/">Ari Goldfarb</a> and team <a href="https://www.linkedin.com/company/kando-environmental-services/">Kando</a> on your $10M <span class="mywpglossary-term-def" data-title="series-b" data-url="https://www.vccafe.com/startup-and-vc-glossary/#series-b">series B</span> to optimise wastewater quality management with AI!</li>
<li>Well done <a href="https://www.linkedin.com/in/michael-nov/">Michael N.</a> and team <a href="https://www.linkedin.com/company/primesecurityai/">Prime Security</a> on your $6M seed round to to <span class="mywpglossary-term-def" data-title="build" data-url="https://www.vccafe.com/startup-and-vc-glossary/#build">build</span> security guardrails into the software design phase, leveraging AI!</li>
<li>Mazal tov <a href="https://www.linkedin.com/in/shabtaynegry-medical-3d-digitalhealth/">Shabtay Negry</a> and team <a href="https://www.linkedin.com/company/technopulm1/">TechnoPulm</a> on your $1.5M <span class="mywpglossary-term-def" data-title="seed-funding" data-url="https://www.vccafe.com/startup-and-vc-glossary/#seed-funding">seed funding</span> to develop a handheld device capable of performing full lung <span class="mywpglossary-term-def" data-title="function" data-url="https://www.vccafe.com/startup-and-vc-glossary/#function">function</span> tests!</li>
</ul>
<h2 class="wp-block-heading" id="ember10721"><span id="exits">EXITS</span></h2>
<ul class="wp-block-list">
<li>Kudos <a href="https://www.linkedin.com/in/oren-becker-89493b16/">Oren Becker</a> and team <a href="https://www.linkedin.com/company/upstreambio/">Upstream Bio</a> on your IPO, valuing the company at $830M! Upstream bio developed treatments for advanced respiratory conditions!</li>
</ul>
<h2 class="wp-block-heading" id="ember10724"><span id="links-for-your-browser">LINKS FOR YOUR BROWSER</span></h2>
<p id="ember10725"><strong>Israel:</strong></p>
<ol class="wp-block-list">
<li><a href="https://www.israel21c.org/why-investors-are-still-bullish-on-israel-even-in-wartime/">Why investors are still bullish on Israel even in war time?</a></li>
<li><a href="https://www.jpost.com/israel-news/article-823924">A year of war: How has the Start-Up Nation’s hi-tech sector been impacted? – experts</a></li>
<li><a href="https://www.thejc.com/news/uk/guardian-pulls-controversial-october-7-documentary-review-that-didnt-meet-editorial-standards-xtrujvhx">Guardian pulls controversial October 7 documentary review that didn’t ‘meet editorial standards’</a></li>
</ol>
<p id="ember10727"><strong>Global:</strong></p>
<ol class="wp-block-list">
<li><a href="https://carta.com/data/first-cut-state-of-private-markets-q3-2024/">First Cut—State of Private Markets: Q3 2024</a> by <a href="https://www.linkedin.com/company/carta--/">Carta</a></li>
<li><a href="https://www.sequoiacap.com/article/generative-ais-act-o1/?">Generative AI’s act o1 – unlocking a new cohort of agentic applications</a> by <a href="https://www.linkedin.com/company/sequoia/">Sequoia Capital</a></li>
<li><a href="https://news.crunchbase.com/venture/europe-startup-funding-recap-q3-2024/?_bhlid=ae2035a84c770e419a2cedcbdef9908b644c1613">European VC Funding Drops To Lowest Quarter In 4 Years</a> – by <a href="https://www.linkedin.com/company/crunchbase/">Crunchbase</a></li>
</ol>
<h2 class="wp-block-heading" id="ember10729"><span id="media-of-the-week">MEDIA OF THE WEEK</span></h2>
<p id="ember10730">United Arab Emirates, Israel, and Singapore lead in terms of global venture activity as share of GDP. “These 3 countries pace ahead of the US in terms of VC as a proportion of overall economic activity, suggesting they are punching above their weight in terms of fostering startup activity.” (<a href="https://www.cbinsights.com/research/report/venture-trends-q3-2024/">source</a>)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEkhJA5FB5_Fg/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1728649917695?e=1734566400&v=beta&t=5JsKduxzpv54CeQoIjr0gNODUwcRUX9AGi4WWWLnY7Y" alt=""/></figure>
<p id="ember10733">Global AI index country comparison</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQFDBIrCdOvv9g/article-inline_image-shrink_1000_1488/article-inline_image-shrink_1000_1488/0/1728650130374?e=1734566400&v=beta&t=rDc1i_KEY9ZziM2IkppOTQNh6z0fScbmqiUM9lgMwFU" alt=""/></figure>
<p id="ember10736">Q1-Q3 2024 Israeli M&A – most Israeli companies get acquired by US corporates</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEGTeVZ-CmqlA/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1728650247664?e=1734566400&v=beta&t=E51OnRjdNeLtWpEIiIvZM3urpdPreh7Yr2xJ8sYUvPU" alt=""/></figure>
<p id="ember10739">Overall venture investments in Europe were down 39% in Q3 2024. The only European country that saw a siginificant uptick was Germany (<a href="https://www.linkedin.com/feed/update/urn:li:activity:7249733947964764160/">source</a>)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEeEKKRyWqEew/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1728650368563?e=1734566400&v=beta&t=2uIPrT46bd6DXKi7rluFY5IjCrGt6XaIalzhxHE-YOA" alt=""/></figure>
<p id="ember10742">Tax the rich… lose the rich. ?? The recent wealth tax increase in Norway was expected to bring an additional $146M in yearly tax revenue.</p>
<p id="ember10743">Instead, individuals worth $54B left the country, leading to a lost $594M in yearly wealth tax revenue. A net decrease of $448M+ ? (the UK is heading in the same direction)</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQHp2S3puCBtkg/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1728650428911?e=1734566400&v=beta&t=qjrFon0rm-mhlZ1afnlKDLAQOHZuo6dzTrpXA4ECpl4" alt=""/></figure>
<p id="ember10746">What are the companies that will reinvent the Internet for the AI era?</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEFZlpHxtkjUg/article-inline_image-shrink_1000_1488/article-inline_image-shrink_1000_1488/0/1728650848247?e=1734566400&v=beta&t=VLPQZalAub8jwz00prF-KCaYjmVjP8PnLzNDcD_WzFU" alt=""/></figure>
<p id="ember10749">What CEOs talked about in Q3 earning calls show an increasing focus on pragmatic AI solutions and renewable energy strategies, indicating a subtly growing shift from hype to action</p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQEVrUYnMLd6tw/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1728650882550?e=1734566400&v=beta&t=_9Q_8dxpzHZDWYiS3RBoT5Sf-CMT1XLCr1e2Twt6Ftw" alt=""/></figure>
<p id="ember10752">AI Agents – the next frontier by <a href="https://www.linkedin.com/company/capgemini/">Capgemini</a></p>
<figure class="wp-block-image"><img decoding="async" src="https://media.licdn.com/dms/image/v2/D4E12AQGQWxVz7VX-RQ/article-inline_image-shrink_1500_2232/article-inline_image-shrink_1500_2232/0/1728651314324?e=1734566400&v=beta&t=aplsB5krSvOkb6kHR4DREoNWUZw4FdDCF-DyJJLX7ug" alt=""/></figure>
<p id="ember10755">Elon Musk debuted the Optimus humanoid robots yesterday. “At scale, you should be able to buy an Optimus robot for $20,000 – $30,000.” “It can walk your dog, mow your lawn, get the groceries, just be your friend.”</p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="Elon Musk introduces an army of Optimus robots" width="1200" height="675" src="https://www.youtube.com/embed/OfZd3LB4K_Q?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p>A beautiful tribute by Nissim Louk, Shani Louk’s (z”l) father, on the light she brought to the world. May her memory be a blessing.</p>
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<div class="cs-embed cs-embed-responsive"><iframe loading="lazy" title="Shani Louk's father Nissim shares the light and beauty his daughter brought to the world" width="1200" height="675" src="https://www.youtube.com/embed/vKHUtkI7xQY?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe></div>
</div></figure>
<p><br />That’s all for this week, thank you for reading. We have a lot to celebrate in our “small” community. Keep on creating!</p>
<p>Eze Vidra</p>]]></content:encoded>
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