Good evening! Below are some of the top tech startup news stories for Tuesday, May 2, 2023.
Chegg lost 40% of its value after the company says ChatGPT is killing its online education business
Just last month experts warned that 300 million people in the US and Europe will lose their jobs to AI and automation. Today, online education company Chegg becomes the first casualty of AI.
The homework-help provider saw a 42% drop in its stock price after stating that the ChatGPT tool posed a threat to its business growth. This reaction was one of the most significant indications of how generative AI is disrupting industries.
“In the first part of the year, we saw no noticeable impact from ChatGPT on our new account growth and we were meeting expectations on new sign-ups,” CEO Dan Rosensweig said during the earnings call Monday evening. “However, since March we saw a significant spike in student interest in ChatGPT. We now believe it’s having an impact on our new customer growth rate.”
Afraid of being left behind, Chegg has partnered with OpenAI to develop its own AI product called CheggMate to assist students with their homework. However, Jefferies analyst Brent Thill said the impact of this product remains uncertain.
“While CHGG plans to launch the CheggMate beta this month to a select few, the timing of a full launch is unclear,” he said. “We don’t expect there to be any meaningful impact from CheggMate in FY23, believing any potential impact won’t show up until FY24 at the earliest.”
Founded in 2005, Chegg provides online tutoring and assistance for students preparing for tests and writing essays. The company relies heavily on subscription revenue, starting at $15.95 per month, which could be threatened if students begin to view AI chatbots like ChatGPT as a viable alternative to paying for these services.
Alibaba founder Jack Ma takes up a teaching position in Japan
Jack Ma, the billionaire co-founder of Alibaba who vanished from the public eye in 2020, has recently accepted a teaching position in Japan. This marks one of the first public positions he has undertaken since his abrupt disappearance from the spotlight last year.
According to an announcement on Monday, Tokyo College, part of the University of Tokyo, said that the Chinese billionaire has become a visiting professor at the institution. In his new role, Ma will engage in research concerning sustainable agriculture and food production.
Ma will also collaborate with university researchers, advise the college, and contribute to seminars. Additionally, he will engage in research alongside university personnel, “especially in the field of sustainable agriculture and food production,” Tokyo College said in a statement on its website.
For over two years now, the Alibaba co-founder, who has an estimated net worth of $33 billion, has maintained a low profile amid a harsh Chinese government crackdown on the technology industry. He stepped down as executive chairman of Alibaba, China’s largest company, after a 20-year reign. The former English teacher steps down on his 55th birthday after amassing a $41.8 billion fortune.
Born on September 10, 1964, as Jack Ma, or Ma Yun, Ma began studying English at a young age by conversing with English speakers at Hangzhou international hotel. He would ride 70 miles on his bicycle to give tourists tours of the area to practice his English for nine years. He became pen pals with one of those foreigners, who nicknamed him “Jack” because he found it hard to pronounce his Chinese name.
Aligned lands $5.8 million to streamline the sales process for B2B buyers and sellers
While the business-to-consumer (B2C) sector has undergone significant changes over the years, the way buyers and sellers in the business-to-business (B2B) space collaborate has remained mostly unchanged, with communication still relying heavily on email threads, attachments, and spreadsheet links.
The inefficacy and outdated sales process have resulted in a frustrating purchasing experience and fewer deals being closed. Just recently, Gartner reports that 77% of B2B buyers “rated their purchase experience as extremely complex or difficult.” Interestingly, Gartner also found that the abundance of high-quality information available to buyers is a significant factor contributing to the complexity of making a purchase decision.
For example, a typical buying group involves six to ten stakeholders, each of whom consults four to five sources of information. The challenge is then to reconcile the information gathered and reach a consensus. Now, one tech startup is on a mission to address these challenges and re-streamline decades-old sales workflows.
Enter Aligned, a Tel Aviv, Israel-based startup that’s building the first B2B buyer-seller network aimed at simplifying interactions between sellers and buyers, with the goal of promoting more efficient collaboration throughout the entire life cycle of a deal. The Aligned platform offers a workspace for sales and customer success teams to manage their deals, simplify decision-making, and help them exceed their sales quotas. It also serves as a platform for customers to interact with sellers throughout the entire sales process.
With thousands of users and hundreds of new companies joining every month, Aligned announced today it has closed a $5.8 million seed round led by Hetz Ventures and NFX, with additional backing from global strategic sales leaders and angel investors.
Aligned will use the fresh capital infusion to expand its team to meet increasing demand, enhance its platform with innovative deal analytics and AI, and assist in establishing the first professional global network of B2B sellers and buyers.
Founded in 2021 by CEO Gal Aga, CPO Gal Deitsch, and CTO Yotam Sela, Aligned aims to revolutionize the B2B buying experience by providing a streamlined and transparent platform for collaborating with sellers. Its solution keeps buyers informed about all aspects of the deal pipeline process, including progress updates and status changes, creating a more efficient and effective process.
Former Facebook CTO Mike Schroepfer launches Gigascale Capital, a VC firm that invests in climate-focused startups
Climate change is one of the most significant challenges of our time. From drought and extreme weather events to rising sea levels that heighten the possibility of catastrophic flooding, the impacts of climate change are global in scope and cannot to ignore.
Solving these climate challenges is what motivated former Facebook chief technical officer Mike Schroepfer to launch a climate-focused venture capital investment firm called Gigascale Capital, along with climate investors Victoria Beasley and Evaline Tsai. Their goal is to address these climate challenges and make a positive impact on the world.
Today, Schroepfer announced the official launch of Gigascale Capital. In an interview with CNBC, Schroepfer said he is “personally motivated to fight climate change and believes this is an inflection point in the industry.”
“Three years ago or so when the Covid lockdowns happened, I had a lot of time quarantined in our house to think about my life and what we’re doing,” Schroepfer said in a video interview Wednesday. “Loved my career in technology, but I always had a passion for the climate crisis. I have some little kids at home. I think about the future, and I said, ‘What am I doing about this problem?’”
“My primary question was: ‘Is there something I can do?’”
To fight climate change, Gigascale is investing in early-stage tech startup companies solving the climate crisis by making products that are cheaper, better, and more desirable than their high-carbon incumbents, the firm said on its website. Gigascale also “works with passionate entrepreneurs across industries to operationalize and scale their businesses by investing from Pre-Seed through Series A.”
“In order to solve this problem, we need business. We need people making a lot of money, helping to decarbonize things. And so this is our whole approach to Gigascale,” Schroepfer added.
Simpplr raises $70M in funding to grow its AI-powered employee experience platform
Simpplr announced today it has closed $70 million in Series D funding led by Sapphire Ventures, with participation from existing investor Norwest Venture Partners. Additional investors include Tola Capital and Salesforce Ventures. The latest round brings the company’s total funding to over $131 million to date.
Simpplr will use the funding proceeds to fuel future growth and support the continued adoption of new AI capabilities and product development including the innovation of its employee experience (EX) platform.
As part of this deal, Simpplr also announced that Jai Das, President and Partner at Sapphire Ventures will join its Board of Directors upon the closure of this funding round.
Simpplr’s continued rapid growth comes as companies recognize the complexity of today’s work-life requires a radically different way to connect, engage and support every employee, anywhere. Employee experience has proven to be a crucial driver of successful businesses. Simpplr is used by more than one million people worldwide, delivering increased engagement and measurable productivity gains for companies in NA, EMEA, and APAC.
“This is a watershed moment for companies everywhere on the importance of employee experience powered by AI and its impact on business performance,” said Dhiraj Sharma, Founder & CEO. “From measuring employee engagement in real-time to enabling effective communication and building community and connection, Simpplr’s customers continue to realize how important EX is to retention, productivity, and talent acquisition.”
In conjunction with the funding, Simpplr announced a number of new executive hires, including Tim Lambert as Chief Revenue Officer, Bala Kasiviswanathan as Chief Product and Customer Experience Officer (formerly Chief Product Officer of Tidal | X, the moonshot factory (formerly Google X), Parag Kulkarni as Chief Technology Officer (previously, Senior Vice President of SaaS Engineering at Nutanix), Aykut Firat as Chief Data Scientist (former Chief Data Scientist at Brandwatch), and Paige Leidig as Chief Marketing Officer (former Chief Marketing Officer at NetBase Quid).
Gigs launches with $2.7M in funding to connect companies to job seekers looking for hourly jobs in their neighborhoods
The United States continues to experience a persistent labor shortage exacerbated following the COVID-19 pandemic. According to the Society for Human Resource Management, 76.1 million workers aged 16 and older – representing more than half of all wage and salary workers – were paid at hourly rates in 2021.
Currently, nearly 80 million roles going unfilled. It’s the desire to solve this problem that motivated Allen Narcisse to start Gigs, a new job platform that connects companies to job seekers looking for hourly jobs in their neighborhoods, thereby eliminating the need to overspend on job postings that often yield unqualified candidates.
Today, Gigs announced the official launch of its employer portal to help retailers, food and beverage, logistics, and hospitality companies with their full-time and part-time hiring needs. The news coincides with the company’s $2.7 million in a pre-seed funding round led by Slauson & Co with additional investment from Wonder Ventures and several angel investors.
Gigs will use the fresh capital infusion to invest in product, engineering, marketing, and sales to further its goal of helping companies find qualified candidates and job seekers to find part-time or full-time work that matches their skills and interests.
Before starting Gigs, he co-founded Ebyline, a platform connecting content creators with publishers and brands. Ebyline was later acquired by Izea and is now listed on Nasdaq. Narcisse also has experience in the rideshare industry, having led Southern California operations at UberEATS and West Coast markets at Lyft. Recently, he served as Chief Operating Officer of Workrise, a labor marketplace focused on the energy sector that raised over $750 million in venture funding.
Inflection AI, an AI startup founded by LinkedIn and DeepMind co-founders, launches ChatGPT-like chatbot
Move over, ChatGPT! Inflection AI, the artificial intelligence startup founded by LinkedIn co-founder Reid Hoffman and Google DeepMind co-founder Mustafa Suleyman, today released its first AI chatbot product called Pi similar to OpenAI’s ChatGPT.
Inflection said that Pi uses generative AI technology to interact with users via dialogues, enabling them to ask questions and offer feedback, the company said Tuesday.
The announcement comes just two months after Hoffman stepped down from the OpenAI Board of Directors to avoid a conflict of interest.
According to Inflection AI’s CEO Mustafa Suleyman, the startup built the Pi chatbot in-house with the goal of creating a highly emotionally intelligent conversational agent that closely mimics human-like interactions, with an emphasis on being supportive and kind.
“It’s very balanced and even-handed on political issues or sensitive topics, but also sometimes it can be funny and silly and creative,” Suleyman said.
Suleyman explained that while the Pi chatbot is suitable for personal daily tasks, it’s not designed to generate code or essays. Additionally, he stated that the company had conducted boundary training to ensure that the AI adhered to its behavioral policies, such as avoiding engaging in romantic conversations.
“The goal is to make sure that the AI always knows it’s an AI and never tries to imitate a human. So it reminds the human user that it is an AI frequently,” he said.
While the chatbot is not currently connected to the internet, Suleyman said that the Pi chatbot is currently available on various platforms such as its website, app, and social media platforms like Instagram. The service is currently free, and there may be premium subscriptions in the future, according to Suleyman. Pi’s AI system is trained using user data, including conversational content, as stated in its terms of service.
Hoffman co-founded Inflection AI with DeepMind co-founder Mustafa Suleyman and former DeepMind researcher Karén Simonyan in 2022. Inflection AI is one of the highest-profile startups working on generative AI technology similar to OpenAI. We wrote about Inflection AI a year ago.
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- Source: https://techstartups.com/2023/05/02/top-tech-startup-news-for-tuesday-may-2-2023-alibaba-aligned-chegg-gigascale-gigs-inflection-ai-and-simpplr/