Hebbia snags $130M, stocks rise, and where VCs are turning for pro-rata help

Top News

• Hebbia raises $130M: After reports indicated that Hebbia was raising around $100 million, investors, including Andreessen Horowitz and Index Ventures, ponied up a larger than expected $130 million for shares in the AI startup. Hebbia offers a service that it claims can “reason” across any “amount and modality of data” and answer complex questions for corporate clients.

• Stocks up, crypto down: The U.S. stock market set new records last Friday and tested new highs again today after a domestic jobs report that some expect will hasten central bank rate cuts. At the same time, the value of many digital assets has fallen in the last week, including a 10% fall in the value of bitcoin, and an even sharper 14% drop in the value of Ethereum’s token.

• Pro-rata funds are gaining momentum: Early-stage investors can get squeezed out of their pro-rata rights in later rounds, or find that the cost of defending their ownership is too rich for their fund size. Enter pro-rata funds, a type of capital pool that TechCrunch reports “deploy capital at the Series B level and later rounds to support seed-stage and Series A VCs who want to exercise their pro rata rights.”

TWiST500

The TWiST500 is nearly 10% complete, so we’re gearing up to add the next batch of startups. Recall that we’re compiling a list of the upstart technology companies that we think are the most interesting, impactful, or indicative of where the market is going.

Jason recently called for community submissions for housing and construction startups, and folks really stepped up. So far, more than 60 companies have been sent our way, including a host of votes for Cover (backyard ADUs), Icon (robotic house construction), Cuby Technologies (micro-factories to mass-produce homes), Azure Printed Homes (more robotic house construction), and BOXABL (prefab homes). We’ll debate those companies on the show tomorrow.

The companies we’re seeing in the sector fall into two broad categories: startups pursuing novel construction techniques and startups building software to make the housing and construction industry more efficient. Both cohorts are worth our time. Given the size of the construction industry and the brutal global housing shortage, we will need many more homes — and there will be many different viable business models for startups to pursue.

We’re not done yet. Send Alex an email ([email protected]) with the housing or construction startup you think is the most impressive, and we’ll add it to our research list. And make sure you stick close to the podcast — we’re building out the TWiST500 on the double.

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This Week in Startups

E1976: AI with Sunny returns, featuring data concerning the current venture capital fundraising market and what to make of ‘AI native” workers. On the demo side of the fence, Sunny and Jason looked at Luna Labs, Kling, Qwen, Cartesia AI, and more. This is a must-watch if you want to keep tabs on the latest from the world of artificial intelligence.

E1975: In the latest Liquidity Podcast, David Weisburd and Jason spoke with Logan Allin (Fin Capital) and Neil Datta (NKD Advisory) about AI, AI regulation, exit pacing, and immigration policy. The group also dug into Carta data detailing longer periods between rounds for startups, which Neil predicated on the non-ZIRP environment that startups and their backers are operating in today.

E1974: A news roundtable to start the week saw Jason and Alex digging into the DEI v MEI debate, with a side order of media economics and norms. From there, the pair dug into Amazon’s recent AI not-acquisition and what to make of Chime and Salt Labs teaming up. The latter startup was new, making its nine-figure exit all the more interesting to unpack.

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