Perplexity’s now worth a reported $9B

Top News

• Fed cuts, market tanks: While Jason and Alex were busy recording today, the Fed announced a quarter-point (25 bps) rate cut. So far, so good. But then the Fed told the markets that it expects slightly hotter inflation next year, and that future rate cuts are in doubt. The stock market did not like that, having already priced in today’s cut and anticipation for more, so it fell sharply. Tech stocks, in particular, got hit.

• Perplexity raises $500M, buys a fellow startup: TWiST500 company Perplexity has raised a half-billion dollars at a $9 billion valuation, Bloomberg reports. The company’s worth has 9x since April, indicating how breakout AI companies can raise effectively infinite money as venture capitalists work to secure equity in companies that could, one day, list. Elsewhere, Perplexity bought a startup called Carbon to, in TechCrunch’s words, “search through your files and work messages […] sometime in early 2025.”

• Today in AI news: The TWiST crew is tracking the AI developer-assistant race closely, as several of its members are part of the TWiST500. And because it’s proving to be a key, early breakout vertical for AI software. Today Microsoft pushed back against startups eating some AI developer tooling market share by releasing a free version of its GitHub Copilot tool. Elsewhere, you can now call OpenAI to chat with it. We have yet to test this feature, but perhaps it will help the less tech-savvy access modern AI services?

TWiST500

Today, we’re adding three companies to the TWiST500:

• Grammarly: Grammarly was TWiST500 material before it announced a deal to combine forces with Coda, a software service that we use in-house. Not to spoil an upcoming interview, but Jason and I are very bullish on this combination. And if you want to know more about agentic AI and where that market is heading, well, tune in.

• Juicyway: Highlighted in the newsletter yesterday, Juicyway fits two theses that we care about. The first is the ability for stablecoins to bring new financial power to developing markets. And second, that fintech, more generally, remains a key lever to help folks outside of the few leading economies to enjoy the benefits of a robust, technology-infused financial system take for granted. It doesn’t hurt that Juicyway is scaling quickly.

• Workpay: This addition is a long-time coming. Workpay first caught our attention in 2023 when it said it intended to scale its HR and payroll service to some 40 African countries, a doubling. It later scaled back its territorial expansion but did not stop growing. When it announced a $5 million raise earlier this year, Workpay said that its revenue was on track to double this year. Mix in expected future expansion into more nations, and you can draw a pretty clear line for Workpay to get very big in not very much time. We love it! — Alex

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This Week in Startups

E2062: Jason and Sunny dive into Grok's latest updates, exploring the Middle East's tech influence and global business challenges alongside Jason's 2025 announcements. They compare Google Gemini’s app to ChatGPT 4, break down robo-taxi fleet costs, and discuss the growing importance of prompt engineering in AI adoption. The episode wraps with insights on Meta’s Llama 3.370b launch, AI infrastructure costs, and ideas for startups tackling trust and bias in language models.

E2061: Jason and Alex break down government reactions to unexplained drone sightings, speculating on radiation-detection theories and spotlighting startups tackling drone detection and radiation technology. Nicole Wischoff joins to discuss startup pitches, market trends, and AI's growing influence on venture capital and fundraising strategies. The episode closes with insights on venture fund performance metrics and challenges for large VC funds

E2060: Alex kicks off the show with Cyera’s Yotam Segev, diving into the evolution of cybersecurity, AI’s role in data categorization, and how competition is shaping the market. They break down ServiceTitan’s IPO and what it signals for the broader tech industry as major companies hit new market cap milestones. Later, Kim Hansen from Cake Equity joins to demo their cap table management platform and share insights on automation, employee engagement, and tackling international growth challenges.

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• Digital Ocean: Whether you’re just getting started with AI, or seeing your project take off, DigitalOcean is the cloud platform that lets you focus on what matters: building killer apps. Right now get up to $100k in free credits at https://www.do.co/twist. Terms and conditions apply.

LAUNCH Cloud Kitchens Incubator

Applications are open for Cohort 2 of the LAUNCH CloudKitchens Incubator (LiCK). We're looking for food entrepreneurs who wish to expand into the ghost kitchen space or tech founders with a team and a great idea. The application and more information can be found at https://ck.launch.co/.

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