Why Y Combinator is taking on heat
Necessary Nuggets
Happy Wednesday! If you’re new here, welcome to Necessary Nuggets, your one-stop pre-seed shop. We deliver updates from Necessary Ventures and helpful tidbits on our little corner of the world. Every edition is also on our blog.
Jobortunities 🚨
✨NEW FEATURED ROLE✨
Magrathea: A climate tech startup making waves by making carbon neutral magnesium metal from seawater and brine.
Nevoya: First fully-electric trucking fleet in the United States, helping truckers trade gas-guzzling for environment-protecting. Get involved and tackle unsolved problems in the trucking industry.
Reach out with any questions! All 107 open job postings are listed here.
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$5.5M
Total Amount Raised
8
Total Funding Rounds
$681k
Average Dollars per Round
$3.4M-$6.8M
Estimated Valuation Range
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
A SCARY LARGE ROUND
September has come to a close, and it’s time to usher in October. Before celebrating spooky season, we wrapped up the top raises from September below, with VMind AI having raised the largest pre-seed round for the month at $12 million. The round saw participation from Multifaceted Capital, OnDeck, and Matt Ocko, co-founder of DCVC. VMind AI is basically an energy drink for AI companies, helping companies run AI compute faster, cheaper, and greener.
Good Reads 📖
For the rushed reader …
OpenAI co-founder Durk Kingma made a stealthy move to leave OpenAI and will be joining Anthropic.
Y Combinator is taking some heat after PearAI, one of its startups, launched on X with immediate controversy that it’s just a copy-cat claiming others’ work as its own.
After its data breach last year and a $30 million class action lawsuit, 23andMe’s fate is murky, especially now as it struggles to cope with a missing board of directors.
For the less rushed reader …
OPENAI'S OPEN DOOR POLICY?: OpenAI is a tech news category of its own at this point. OpenAI co-founder Durk Kingma made a stealthy move to leave OpenAI and will be joining Anthropic. After receiving his Ph.D. in machine learning from the University of Amsterdam and spending time as a doctoral fellow at Google, Kingma joined OpenAI’s founding team as a research scientist and led the algorithms team. Why leave his (not so) baby company behind? Kingma shared that he feels particularly aligned with Anthropic’s mission to develop powerful AI systems responsibly. Kingma’s move to Anthropic comes with good timing: Anthropic is starting fundraising talks, reportedly with up to a $40 billion valuation. Rumors of a $40 billion valuation can certainly make a hard decision easier.
WHY OH Y: Get in the bunker because it’s an open-source apocalypse. Y Combinator is taking some heat after PearAI, one of its startups, launched on X with immediate controversy that it’s just a copy-cat claiming others’ work as its own. Since its founding, PearAI has openly stated that it cloned two projects, VSCode and Continue, both covered under the Apache open source license. The problem is that PearAI slapped on a closed license entirely made-up using Chat-GPT. The criticism has turned to YC and whether it’s still as selective as it used to be, with critics questioning why YC admitted PearAI when it’s a company founded on copied code. Someone call the Honor Committee because I think PearAI forgot to sign the honor code.
IN NEED OF A GENE-Y: 23andMe’s lucky Jordan year is over. After its data breach last year and a $30 million class action lawsuit, 23andMe’s fate is murky, especially now as it struggles to cope with a missing board of directors. In August, all of the company’s board of directors resigned in response to CEO Anne Wojcicki’s strategic proposal to take the company private at 40 cents per share, a steep drop from the $10 a share it stood at three years ago. Home DNA testing seems like it lost its sparkle, and increased competition in the space has only made it more difficult for 23andMe to turn a profit. The scariest realization for 23andMe is that without another vertical, it may have run out of customers. The company never made the turn to provide an ongoing source of value. Perhaps it could use a test to see if scaling is in its DNA.
Fire Up the Pre-Seeds🔥
Check out details on the pre-seed raises from the past week:
CLIMATE tech
Good Agriculture - Big news for Old MacDonald.
Good Agriculture raised $650k including participation from Terra Regenerative Capital, Harvest Returns, and G-Force. Good Agriculture is all about happy farmers, providing business services like bookkeeping and funding resources to ensure farms run optimally.
health tech
ReSync Bio - Data so clean, it belongs in a lab.
ReSync Bio raised funding from Caffeinated Capital, Atria Ventures, and Ramsey Homsany, co-founder of Octant Bio. ReSync Bio is joining the great frontier of drug discovery, designing a platform that serves as an automated tool to process research data.
artificial intelligence
Pepsales - Trial and less error.
Pepsales raised $1.1 million led by Chiratae Ventures. Pepsales is building an AI-powered platform to address a critical pain point in the sales process by helping B2B SaaS companies create personalized product demos.
Crosshatch - Doubling down on digital personality.
Crosshatch raised $2.7 million led by Village Global. Village Group is creating a platform that allows users to have a personalized experience across hundreds of apps, while keeping their data safe.
Outro🚪
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