## AI Takes the Spotlight: Global Startup Funding on the Rise

Global startup funding saw a **16% increase** in the second quarter, driven by a surge in mega-rounds, according to Crunchbase data.  **Artificial intelligence (AI)** continues to be the driving force behind this growth, with **AI companies receiving 30% of all investment dollars**, a staggering **double** from the previous quarter, reaching **$24 billion**. 

**Gené Teare**, a senior data editor at Crunchbase, attributes this surge to the **increasing adoption of AI technologies** and the **time it takes for venture capital investments to filter through the market**.  

While AI dominates, the second quarter also saw a **rise in larger M&A deals**, offering a much-needed **liquidity boost** in a **stagnant IPO market**. While **M&A activity is expected to increase**, it hasn't reached the levels anticipated due to **lowered prices** and companies realizing they might not be able to go public in the next few years.

##  Key Takeaways

* **AI funding skyrocketed**, reaching **$24 billion** in Q2, doubling from the previous quarter.
* **Mega-rounds and M&A deals** contributed to the overall increase in startup funding.
* The **IPO market remains dry**, leading to a rise in M&A activity as a source of liquidity.
* **AI continues to be a dominant force** in the startup ecosystem.


Today on Equity, Crunchbase Senior Data Editor Gené Teare helps us dive into the uptick in mega-rounds, how AI funding doubled in Q2, and more.

AI Funding Soars: Global Startup Investments Rise with AI Dominating

## AI Lobbying Heats Up: Big Players Spend Millions on Federal Influence

The world of artificial intelligence (AI) is experiencing a lobbying boom, with startups like OpenAI, Cohere, and Anthropic pouring resources into influencing federal policy.

**OpenAI, the creator of ChatGPT, has significantly increased its lobbying expenditures, spending $800,000 in the first half of 2024, a dramatic increase from $260,000 in all of 2023.** The company has expanded its team of outside lobbyists from three to around 15, and has hired prominent figures like former Republican Sen. Norm Coleman and ex-NSA director Paul Nakasone.

**OpenAI rival Anthropic is also investing heavily, on track to spend half a million dollars on lobbying this year.**  The company has hired former AWS lobbyist Stoney Burke and Jed Bhuta, and has an in-house lobbyist.

Even smaller AI firms like Cohere, which specializes in custom generative AI models for enterprises, have increased their lobbying efforts, spending $120,000 in the first half of 2024 compared to $70,000 in 2023.

**This surge in lobbying comes amid an election year where leading presidential candidates have expressed divergent views on AI regulation.** Vice President Kamala Harris, the Democratic frontrunner, supports federal oversight of AI, while former President Donald Trump, a Republican contender, advocates for deregulation.

**The U.S. Commerce Department's recent report suggests a possible direction for the Harris Administration, recommending the release of new AI models but also proposing government monitoring for potential risks.**

**While Congress hasn't passed comprehensive legislation on AI, state and local governments are stepping up with proposed laws, leading to a rush to influence these regulations.** OpenAI, for example, has publicly supported Senate bills that aim to establish a federal AI rulemaking body and provide resources for AI research and education.

**As the November election approaches, AI companies are also facing potential antitrust investigations from the U.S. Department of Justice and Federal Trade Commission (FTC).** The FTC is seeking information on Amazon's partnership with AI startup Adept, while both the Justice Department and FTC are investigating Microsoft's acquisition of Inflection staff. Microsoft's decision to relinquish its observer seat on OpenAI's board is likely a move to address antitrust concerns given its significant investment in the company.

**The increased lobbying activity reflects the growing influence of AI in society and the critical need for policymakers to establish clear regulations and guidelines for this rapidly evolving technology.**

AI startups including OpenAI, Cohere and Anthropic are increasing their spending on lobbying, federal data shows.

AI Startups Lobbying Frenzy: OpenAI, Anthropic, and Cohere Spend Big on Federal Influence

## Scaling a Fashion Brand: From Buzz to Big Business

The recent struggles of some high-profile fashion brands highlight the challenges even the most promising designers face. But, scaling a small label is still possible, even in today's tough market. This article delves into strategies for translating cultural buzz into commercial success, drawing on insights from brands, investors, and expert advice.

**Key Takeaways:**

* **Cultivate a Strong Brand Identity:** A clear and compelling brand story is crucial for attracting customers and building loyalty. Focus on what makes your brand unique and resonates with your target audience.
* **Embrace Data-Driven Decisions:**  Use data analytics to understand your customers, optimize your marketing campaigns, and make informed decisions about product development and pricing.
* **Build Strategic Partnerships:** Collaborate with influencers, retailers, and other brands to expand your reach and tap into new markets.
* **Invest in Digital Marketing:** Utilize social media, email marketing, and other digital channels to connect with your target audience and drive sales.
* **Focus on Sustainable Practices:**  Consumers are increasingly demanding transparency and ethical practices from brands.  Sustainability is no longer just a trend, it's a necessity.

**Example:** RaiseFashion, a non-profit organization, is supporting emerging BIPOC designers by providing educational programming, networking opportunities, and financial resources.  Their Brand Fellowship program helps designers develop the skills and connections they need to build successful businesses.

**The Bottom Line:** Building a $100 million fashion brand requires a strategic approach, a strong understanding of your target market, and a commitment to innovation and sustainability. By focusing on these key areas, you can increase your chances of success in the competitive world of fashion.

The recent closure of some of fashion’s buzziest brands laid bare the many hurdles facing even the most promising designers. But it is still possible to scale a small label, even in today’s tough environment. In part one of this series, BoF Insights spoke with brands and investors and drew upon its own advisory experience to outline how to translate cultural heat into commercial success.

Building a $100 Million Fashion Brand: Secrets to Scaling Your Label

## Cosm's Immersive Entertainment Raises $250 Million - Sports Team Owners Invest in Shared Reality

Cosm, a company creating immersive entertainment experiences dubbed "shared reality," has secured **$250 million** in new funding. This investment will fuel the expansion of Cosm's venues in Los Angeles, Dallas, and other cities, while also strengthening their technology and media divisions.

**Notable Investors:**

The funding round includes existing investor **Steve Winn** (Mirasol Capital) and a roster of new investors, many of whom are known for owning professional sports teams:

* **Avenue Sports Fund** (led by former Milwaukee Bucks co-owner **Marc Lasry**)
* **Rock** (founded by Cleveland Cavaliers owner **Dan Gilbert**)
* **Bolt Ventures** (co-run by Blackstone partner and sports team investor **David Blitzer**)
* Investment firm **Baillie Gifford**

**Expanding the Shared Reality Experience:**

Cosm opened its first venue in Los Angeles at Hollywood Park last April. The space features a combination of permanent theater-style seating and wall-sized screens for communal viewing of sports, live events, and other programming, along with a more flexible event space. The venue is designed to offer an immersive and compelling experience.

The company has plans to open additional venues in Dallas at Grandscape and Atlanta's Centennial Yards.

**Strategic Partnerships and Vision:**

Cosm's CEO, **Jeb Terry**, stated that the company is "redefining the way the world experiences content" and that the new investors provide "invaluable insights and growth capital" to scale the business.

Content partners include the **NBA, UFC, ESPN, NBC Sports, Turner Sports, Fox Sports, Cirque du Soleil,** and various studios, artists, and creators.

**A New Era of Entertainment:**

Steve Winn commented on the significance of the funding, highlighting the five years of research and development invested in this "new form of experiential entertainment." He believes the strategic partnerships will propel Cosm's expansion into new locations.

Cosm was founded in 2020 with the acquisition of Evans & Sutherland, a pioneer in modern computer graphics, along with its subsidiary Spitz, Inc., and subsequent acquisitions of LiveLikeVR (now Cosm Immersive) and C360.

Cosm, purveyor of immersive technology, media and entertainment experiences it has dubbed "shared reality," has raised more than $250 million in new funding.

Cosm's Immersive Entertainment Experience Raises $250 Million -  Sports Team Owners Invest in Shared Reality

## Mindtrip: Your AI Travel Planner ✈️

Mindtrip, an AI-powered travel agent startup, has launched a game-changing feature that lets you **build itineraries from almost anywhere on the web**.  Imagine this:

* **See a cool place on TikTok?**  Paste the link into Mindtrip and it'll automatically create a suggested itinerary.
* **Found a stunning landscape on Instagram?**  Mindtrip can help you plan a trip around it.
* **Got a screenshot of a ticket or a list of cities?**  Mindtrip's AI can suggest places to visit, restaurants, and bars.

**How does it work?** Mindtrip analyzes the content you provide, whether it's a link, screenshot, or even a YouTube video transcript, and pulls out all the relevant locations.

**Beyond the AI:** Mindtrip also offers:

* **Creator Program:**  Earn money by sharing your travel content and generating itineraries for others.
* **Group Chat:** Plan trips with friends and family seamlessly.
* **iOS App:** Coming soon!

**Mindtrip isn't alone:** Other startups like Layla, Pilot, Byway, and Sēkr are also using AI to revolutionize travel planning.  Google is even experimenting with its own AI travel planner.

**With Mindtrip, the future of travel planning is here.**  Get ready to say goodbye to tedious research and hello to personalized, AI-powered itineraries!

You can even upload a screenshot of a ticket, or a list of cities you are visiting and ask Mindtrip's assistant to suggest places to visit, bars and restaurants.

Mindtrip's AI Travel Planner: Build Itineraries From Screenshots, Videos, and More!

##  AI Assistant for Sales Reps: Sybill Raises $11 Million to Automate Work

Sybill, a startup that's built an AI assistant specifically for sales representatives, has raised $11 million in a Series A round led by Greycroft.  The market for AI assistants in sales is getting crowded, with companies using **generative AI** and **large language models** to help salespeople automate tasks like filling out proposals and updating databases.

**What makes Sybill different?** Sybill goes beyond basic meeting notes and transcripts. It analyzes call transcripts and emails to provide context-driven insights and summaries. This allows it to offer more than just notes – it can understand the full context of conversations and provide valuable information.

**Targeting salespeople, not just leadership:** Sybill's focus on helping individual salespeople, not just sales leadership, has helped it gain traction. By empowering individual reps, Sybill has seen significant growth, with almost 60-70% of new customers and revenue coming from referrals.

**Key Features:**

* **Automated tasks:**  Sybill handles repetitive work like summarizing sales calls, drafting follow-up emails, updating CRMs, and extracting key information like budget, buyer, and competition.
* **Contextual understanding:**  Sybill's AI goes beyond basic transcription and analyzes conversations to provide valuable insights and summaries.
* **Workflows:**  Sybill doesn't just offer tools, it builds end-to-end workflows to automate tasks like note-taking, CRM entry, and follow-ups.

**Sybill's success:** Founded in 2020, Sybill saw its annual recurring revenue (ARR) skyrocket from $100,000 to $1 million in just nine months in 2023. This growth was fueled by word-of-mouth referrals, highlighting the value it provides to salespeople.

**What's next for Sybill?** The $11 million funding will be used to further develop the AI assistant, hire more staff, and expand its reach in the sales market.

**Sybill is tackling the challenges faced by salespeople head-on, making their lives easier and increasing their productivity.**  With its focus on providing valuable insights and automating tasks, Sybill has positioned itself as a key player in the future of sales automation.

Sybill, a startup that has built an AI assistant specifically for sales reps, has raised $11 million in a Series A round led by Greycroft.

2 months ago Startups News Digested