These Startups Raised $1B+ This Month

Sometimes, when we discuss grandiose events, we lose sight of the other essential news. This is especially true in the AI industry: people talk a lot about OpenAI, Microsoft, and Google but rarely pay attention to the equally important developers.

That’s unfair.

So, let's fix that. Today, I propose to take a look back at the past month and discuss which AI startups have caught investors’ attention (they collectively raised over $1B!) and why that happened.

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AI Isn't Just OpenAI

Yes, even though I will talk about underdogs today, we can't do without the nice guy in the picture above. Because the month with big investments for AI startups kicked off with news about OpenAI. Let me briefly explain why this is important.

ChatGPT Developer raised $6.6B and received a $157B valuation earlier this month. As a result, OpenAI became one of the top three startups with the biggest venture capital. Now, it’s in the same lineup as Elon Musk's SpaceX and ByteDance (TikTok's parent company). This event was also important for Microsoft: according to Bloomberg, the amount invested in OpenAI from this corporation approached $14B.

Nvidia also took part in the round. However, Apple was not among the investors, although some insiders say it was actively negotiating its participation.

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So, what does that tell us? Quite a lot:

VCs are ready to make long-term investments. Even the prominent skeptics who think AI is a “bubble” recognize it's pretty solid. Despite OpenAI going through staff turmoil, its current valuation is about 40 times earnings, and breakeven won't be possible until 2029; the industry remains a popular source of investment. And the thing is, it gives hope to other startups as well.

By the way, if you want to understand why it's not just OpenAI that's attracting attention but all the projects of its descendants, we've got one post for you. We recently broke down how OpenAI's Mafia is growing this year:

And here are the ones that are already benefiting from it.

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Poolside | $500M For AI Coding Assistant

The first company on our list is Poolside.

Poolside is an AI startup focused on developing coding assistants. Founded in early 2023 by Jason Warner (former CTO of GitHub) and Eiso Kant (co-founder of several dev-focused startups), the company recently raised $500M in Series B funding. This brings its total valuation to $3B. Investors’ list included Nvidia, eBay, and many others.

Poolside creates models that improve software development processes. The company's flagship model, Malibu, uses an approach called Reinforcement Learning from Code Execution Feedback. It allows companies to customize their models based on their specific methods and data, ensuring that sensitive information remains secure.

The startup will use the raised capital to purchase 10,000 Nvidia GPUs to train models, expand go-to-market efforts, and boost R&D initiatives.

Poolside has attracted investment amid booming growth in the coding tools market.

These include:

• GitHub's Copilot grew to more than 1.8M paid subscribers.
• Other AI coding startups such as Magic (raised $320M) and Codeium (raised $150M) have also recently received large investments.
• Polaris Market Research predicted that the AI coding tools market could reach $27B by 2032.

Apparently, this is one of the most promising areas of AI.

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Sierra | $175M for AI Customer Service

Sierra is a company founded by Bret Taylor, former co-CEO of Salesforce and chairman of OpenAI, and Clay Bavor, former Google executive. It recently raised $175M in a round led by Greenoaks Capital and gained a $4,5B valuation. To give you an idea of the pace of growth, the Sierra's valuation has more than quadrupled from its January 2024 valuation.

The company specializes in AI-powered customer service chatbots. Sierra's agents mimic human communication and serve as “brand ambassadors.” The technology allows customization to align with each brand's identity and tone. It’s powered by a “constellation” of models, where a primary model handles interactions and a secondary model serves as a validation function, ensuring accuracy and relevance.

Market context:

• Sierra's success is a broader trend of former OpenAI executives founding AI-focused startups. Alongside Bret Taylor, Mira Murati, Ilya Sutskever, and Andrej Karpathy are working on their projects.
• AI agents are a new high-demand trend among small businesses and large corporations.

We wrote about it here:

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Zip | $190M for AI-Enhanced Procurement

Zip, a startup founded in 2020 by former Airbnb engineers Rujul Saparde and Lu Cheng, also did well this month. The company raised $190M in Series D, achieving a valuation of $2.2B. Zip develops AI procurement tools. The company's ability to simplify complex procurement processes and provide valuable information through AI resonates with customers and investors alike.

Zip's core offering is an “intake-to-procure” solution that streamlines businesses' purchasing processes. The platform allows employees to initiate purchase requests, which are then routed to various departments such as finance, legal, IT, and security for approval. The startup provides a code-free interface to create approval workflows, ensuring speed and transparency.

Some of Zip's clients include large enterprises like Arm, Lyft, and Reddit.

With the investment, Zip plans to devote more resources to R&D and continue global expansion, especially in Europe, the Middle East, and Africa.

And here's the market context:

• Zip's investment is considered one of the largest in procurement technology over the past two decades, clearly hinting at a focus on cost optimization and risk management in the enterprise environment.
• The growth of the e-commerce industry is impacting the procurement software market, with more and more consumers turning to online shopping due to convenience and variety.
• The global procurement software market was valued at $6.7B in 2022. It is projected to reach $13.8B by 2027, with a compound annual growth rate of 10.9%.

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EvenUP | $135M for Legal AI

Now a little bit about the legal system. EvenUp is a legal technology startup that uses AI to improve injury law practices. Founded by Rami Karabibar, Ray Mieszaniec, and Saam Mashhad. The company aims to close the justice gap and empower personal injury attorneys to get better results for their clients. Three weeks earlier, EvenUp raised $135M in a Series D, valuing the company at over $1B.

EvenUp's core offering is an AI-powered claims platform for personal injury law firms. Piai models trained on hundreds of thousands of personal injury cases and millions of medical records, generate demand letters and packets, saving lawyers up to 15 hours per case. The AI also helps identify missing documents and flags potential issues, resulting in up to a 30% increase in settlement amounts.

EvenUP's client base now includes more than 1,000 law firms. Claims created with Piai have helped secure over $1.5B in damages and identify over $200M in missing documents.

The AI legal industry is experiencing some pretty serious growth:

• Projected market size: expected to reach $19.3B by 2033, up from $1.5B last year.
• Law is one of the industries where AI has been penetrating more and more in the last two years. This applies to both private lawyers and large law firms.

We are not lawyers and cannot solve all of the legal difficulties. But at least we can offer a few tools to help you fight your taxes:

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Read AI | $50M For AI Summary Bot

Read AI received the least funding among the startups on our list, but that doesn't make it any less significant. The company, founded by former Foursquare CEO David Shim, Rob Williams, and Elliot Waldron, develops AI tools to improve productivity. The platform optimizes meeting organization, email, and team collaboration through synchronization. In October, Read AI raised $50M in Series B funding.

Read AI integrates its AI with various platforms, including email services, Slack, and tools like Hubspot, Jira, and Confluence. It synchronizes data from corporate accounts and creates handy summaries for users. Investors and subscribers have appreciated this solution: Read AI's audience (as well as revenue) has doubled in the last six months.

Thanks to the new funding, Read AI plans to expand to 100 employees by the end of the first quarter of 2025 and continue to develop and scale its products.

If we look at this market, the situation is as follows:

• Meeting transcription services are becoming increasingly common, pushing Read AI to innovate beyond basic functions.
• The field of AI productivity is becoming increasingly saturated, with numerous startups offering similar services.
• The AI productivity market size is now estimated at $6,948M. It is expected to grow at a compound annual growth rate of 26.7% from 2024 to 2030.

Some AI tools really do make life better:

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