AI and Web3 led May’s new unicorn pack (2024)

Six new unicorns were minted in May and, yep, two of them were AI companies, Crunchbase data released earlier this week showed. The first was Elon Musk’s xAI, valued at $24 billion after raising $6 billion from Andreessen Horowitz and Sequoia, among others. The second, Weka, also has a Musk connection: Musk associate Antonio Gracias’ Valor Equity Partners led the AI data platform’s $140 million Series E (Valor is also an investor in xAI).

While newly minted AI unicorns is a predictable enough phenomenon these days, I was caught more off guard by this: Two of May’s new unicorns are in Web3—one is Ethereum-based social network Farcaster, while the other is biometrics-focused blockchain identity startup Humanity Protocol (which seems to be a Worldcoin competitor).

It shouldn’t really be surprising, I suppose. Bitcoin and Ethereum are both up well over 40% year to date, and I’ve had VCs telling me crypto is back. So, it really does seem like AI and crypto are the elephants in the Silicon Valley funding room right now.(What does that room look like in its physical manifestation? Wrong answers only.)

Farcaster is especially interesting—with about 50,000 daily active users so far, it’s taking a serious shot at getting Web3 social media right. (My colleague Niamh Rowe spent a recent evening on the platform if you want to read more.)

So, xAI, Weka, Farcaster, and Humanity Protocol make four, and the last two are Iconiq Growth-backed Altruist and Sigma Computing, backed by Avenir Growth Capital and Spark Capital.

There are other worthwhile factoids from the Crunchbase report: While six new unicorns isn’t nothing, it still marks a relative decline—in April, Crunchbase tagged ten new unicorns and, in May 2023, the company tracked eight new unicorns. And, of the six new unicorns, five were in the U.S., with Hong Kong-based Humanity Protocol diverging from that pattern.

But the AI boom combined with renewed Web3 enthusiasm, that’s sticking with me. Slacking my colleague Leo Schwartz about this, he joked: “Time is a flat circle.”

As I laughed into my computer, I thought, yeah, it really is—but we’re also living in the age of the unicorpse, which means that just because you’re a unicorn today, doesn’t mean you will be tomorrow. And sure, that’s always been true, but it bears remembering that a high valuation can be fragile and sometimes fleeting. After all, a lofty valuation is a promise, not the fulfillment of one. And when a high valuation drops, it’s crushing and awkward.I asked Crunchbase how many unicorns died recently.

“Insightec is reported to have raised at a lower valuation than $1 billion in June 2024,” said Crunchbase’s Gené Teare via email. “Other companies that were removed in Q1 2024 due to lower than $1 billion values include Cameo, VOI Technology, Bolt and Quora.”

Some unicorns may be getting their horns—but others are getting those horns sawed off.

See you Monday,

Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.

Correction: After this article was published, Crunchbase updated its numbers to add one more unicorn to May, Builder.ai. The valuation was revealed in June.

VENTURE DEALS

- iOnctura, an Amsterdam, The Netherlands-based developer of small molecule therapies for hard-to-treat cancers, raised €80 million ($85.7 million) in Series B funding. Syncona led the round and was joined by existing investors Merck Ventures, Inkef Capital, Schroders Capital, VI Partners, and others.

- Isar Aerospace, a Munich, Germany-based satellite launch service company, raised €65 million ($69.7 million) in a Series C extension from NATO Innovation Fund, G3T, 10x Group, Besant Capital, and others.

- HeyGen, a Los Angeles, Calif.-based AI video generation platform for businesses, raised $60 million in Series A funding. Benchmark led the round and was joined by Thrive Capital, BOND, Conviction, and others.

- Daydream, a New York City-based AI-powered shopping platform, raised $50 million in seed funding. Forerunner Ventures and Index Ventures led the round and was joined by GV and True Ventures.

- Pomelo Care, a New York City-based telehealth platform for maternity care, raised $46 million in Series B funding. Existing investors First Round Capital and a16z led the round and were joined by Stripes, BoxGroup, Operator Partners, SV Angel, and angel investors.

- M2X Energy, a Rockledge, Fla.-based producer of low-carbon methanol for fuel and other purposes, raised $40 million in Series B funding. Conifer Infrastructure Partners led the round and was joined by Breakthrough Energy Ventures, Eni Next, Add Ventures by SCG, and Autodesk Foundation.

- Qblox, a Delft, The Netherlands-based developer of quantum control stacks, raised $26 million in Series A funding. Quantonation and Invest-NL led the round and was joined by others.

- Humata Health, a Winter Park, Fla.-based company designed to streamline the prior authorization process for health care providers, payers, and patients, raised $25 million in funding. Blue Venture Fund and LRVHealth led the round and was joined by Optum Ventures, .406 Ventures, Highmark Ventures, and VentureforGood.

- Molten Industries, an Oakland, Calif.-based company that converts natural gas to graphite and hydrogen, raised $25 million in Series A funding. Breakthrough Energy Ventures led the round and was joined by Sozo Ventures, Mark Heising, Steelhead Capital, and existing investors.

- Kinetic, a Santa Ana, Calif.-based network of service centers for electric vehicles and autonomous vehicles, raised $21 million in Series B funding. Menlo Ventures led the round and was joined by Lux Capital, Construct Capital, Haystack Ventures, and others.

- Gynger, a New York City-based buy-now-pay-later platform for enterprise technology purchases, raised $20 million in Series A funding. PayPal Ventures led the round and was joined by Gradient Ventures, Velvet Sea Ventures, BAG Ventures, and Deciens Capital.

- SurrealDB, a London, U.K.-based developer of a multi-model database, raised $20 million in funding. FirstMark and Georgian led the round and was joined by Crew Capital and Alumni Ventures.

- PointFive, a Tel Aviv, Israel-based platform designed to optimize enterprise cloud costs, raised $16 million in seed funding. Index Ventures led the round and was joined by Entree Capital, Sheva Capital, Vesey Ventures, and angel investors.

- Pomerium, a Los Angeles, Calif.-based employee access and verification platform, raised $13.8 million in Series A funding. Benchmark led the round and was joined by existing investors Bain Capital, Haystack, SNR, and Oleg Rogynskyy.

- Travel Wallet, a Seoul, South Korea-based foreign currency exchange platform for international travelers, raised $10 million in funding from Lightspeed.

- Substrate Labs, a New York City-based AI model development platform, raised $8 million in seed funding. Lightspeed Venture Partners led the round and was joined by South Park Commons, Craft Ventures, and others.

- Cadana, a New York City-based contractor management and payroll platform, raised $7.4 million in funding. Costanoa Ventures led the round and was joined by Better Tomorrow Ventures and 500 Startups.

- Materia, a New York City-based generative AI company for public accounting firms, raised $6.3 million in funding. Spark Capital led the round and was joined by Haystack Ventures, Thomson Reuters Ventures, Exponential Founders Capital, and the Allen Institute for AI.

- atmio, a Hamburg, Germany-based operating system for finding and reporting methane emissions, raised €5.1 million ($5.5 million) in seed funding. Notion Capital led the round and was joined by SquareOne.

- Butterflies AI, a Bellevue, Wash.-based social media platform designed for both human users and AI bots, raised $4.8 million in seed funding. Coatue led the round and was joined by SV Angel and angel investors.

- Day.ai, a Boston, Mass.-based AI-powered customer relationship management platform, raised $4 million in seed funding. Sequoia Capital led the round and was joined by Pillar VC, Conviction, Stage 2 Capital, Inspired Capital, 20Sales, and angel investors.

PRIVATE EQUITY

- Guardian Fire Protection Services, backed by Knox Lane, acquired Harris Fire Protection, a Baltimore, M.D.-based fire protection services provider. Financial terms were not disclosed.

- Littlejohn & Co. acquired a minority stake in Great Day Improvements, a Macedonia, Ohio-based provider of residential remodeling and premium building products. Financial terms were not disclosed.

- One Equity Partners acquired a minority stake in Gruppo Siti B&T, a Formigine, Italy-based manufacturer of turnkey plants and machinery. Financial terms were not disclosed.

- Riskonnect, backed by TA Associates, acquired Camms, a Melbourne, Australia-based developer of governance, risk, and compliance software. Financial terms were not disclosed.

- Stellex Capital Management acquired J. Skinner Baking, an Omaha, Neb.-based producer of baked goods and pastries. Financial terms were not disclosed.

OTHER

- knownwell acquired Alfie Health, a New York City-based precision medical and obesity management clinic. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Charlesbank Capital Partners, a Boston, Mass. and New York City-based private equity firm, raised $1.3 billion for its second fund focused on tech companies.

- Columna Capital, a London, U.K.-based private equity firm, raised €290 million ($310.8 million) for their third fund focused on companies in the animal health, health care, insurance, and agri-food sectors.

PEOPLE

- Astorg, a London, U.K.-based private equity firm, hired Chris Benson as a partner for its mid-cap fund and Daniel Pang on the health care team as a managing director for the flagship fund. Formerly, Benson was with Advent International and Pang was with Welsh, Carson, Anderson and Stowe.

- Ballistic Ventures, a San Francisco-based venture capital firm, hired Nicole Perlroth as a venture partner. Formerly, she was with The New York Times.