Hey — It’s Nico.

Welcome to another Failory edition. This issue takes 5 minutes to read.

These are the 5 most important things:

• Sustainable investment platform Grünfin shut down — learn why below.

• A founder shared lessons after 127 VC rejections.

• Another founder shared lessons from getting into YC after 4 failed attempts.

• Public, /dev/agents and Parisian AI raised $135M, $56M and $10M.

• 83 out of the 95 startups in YC F24’s batch are focused on AI — below are some of the most interesting ones.

Let’s get into it.

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This Week In Startups

🔗 Resources

A founder shares lessons after 127 VC rejections.

OpenPhone founder shares how they got their first 1,000 customers. 

A founder shares how they got into YC after 4 attempts.

A guide to getting 1M users for consumer apps.

Streak’s founder on hitting 8-Figure ARR while staying lean.

📰 News

Inflection AI acquires BoostKPI and Jelled.ai to enhance its enterprise capabilities.

HongShan struggles to deploy its $9B capital after splitting from Sequoia in 2023.

Indian VC Stellaris raises $300M for its third fund targeting early-stage startups.

TuSimple’s co-founder demands for immediate liquidation of the company.

OpenAI employees offered a $1.5B share sale to SoftBank in a new tender offer.

💸 Fundraising

Public secures $135M to accelerate growth of its AI-driven investment platform. 

/dev/agents secures $56M in seed funding to build an AI agent operating system.

Parisian AI secures $10M in seed funding to expand in the US.

Health-tech startup PocDoc raises £5M for its digital diagnostics startup.

Fail(St)ory

Sustainable Investing Ahead of Its Time

Tallinn, Estonia-based sustainable investment platform Grünfin announced that it has shut its doors for good after 4 years of trying to democratize access to sustainable ETF investing, highlighting some of the challenges faced by mission-driven startups.

The startup had shown promise early on, earning authorization from The Estonian Financial Supervision and Resolution Authority and catching the eyes of investors like Norrsken VC, Superangel, United Angels, and Lemonade Stand, who provided Grünfin with approximately €2 million in venture capital funding.

However, despite trying various approaches over the years, the company was ultimately not able to overcome barriers to growth, resulting in the decision to cease operations and refund customers the money they had invested via the platform.

What Was Grünfin: Founded in 2020 with the mission to make sustainable investing more accessible, Grünfin offered environmentally and socially-conscious investors an easy way to build a sustainable investment portfolio around their interests.

Users could start by selecting a focus, such as climate change, gender equality, or health, and setting a monthly contribution amount. Grünfin then curated them a portfolio tailored to their individual values, automatically investing their monthly contributions into sustainable companies making an impact in that area.

Grünfin was founded by two mothers, Karin Nemec and Triin Hertmann, who cited concerns for the future of the planet and their children as driving factors behind the startup’s mission. The founders, along with Grünfin’s CTO, Alvar Lumberg, brought with them years of experience in FinTech, most notably as early employees at Wise (formerly TransferWise).

The Numbers:

• 📅 Founded in 2020.

• 💰 Raised €2 million (approx. $2.1 million) in VC funding.

• 👤 Had around 10 employees.

• 📈 Nearly 99% of customer investment portfolios showed growth.

Reasons for Failure: 

• Misconceptions Around Sustainable Investing: Many people have the commonly held belief that sustainable investing doesn’t provide good returns. Despite the fact that almost 99% of Grünfin’s customers saw significant portfolio growth, demonstrating that sustainable investing can indeed be a viable investment strategy, CTO Alvar Lumberg highlighted this as a key reason for Grünfin’s failure, stating that these misconceptions created a trust barrier to acquiring more customers and achieving growth.

• Wrong Timing: According to CEO Karin Nemec, another roadblock to success that Grünfin faced was a general lack of urgency to invest right now. Low confidence in global markets, nervousness about the risks of investing during uncertain times, and not having enough money to invest are all factors holding new investors, especially millennials and younger generations, back from getting into the markets.

• Problems with Growing at Scale: The lack of trust and knowledge around sustainable investing, along with the general reluctance of potential new investors to enter the markets right now, made it impossible for Grünfin to achieve the level of high-speed growth it needed to scale effectively.

Why It Matters: 

• Having a good product and an admirable mission, backed by a leadership team with solid industry experience, is often not enough to achieve startup success.

• Launching new FinTech ventures amidst so much global uncertainty around finances can be extremely risky.

• Providing users with a good experience — and even positive returns on their investments — doesn’t matter if you can’t achieve growth at scale.

Trend

AI in YC

Y Combinator’s Fall 2024 (YC F24) cohort was almost entirely AI-focused, with 83 of the 95 launched companies including “AI” somewhere in their name or tagline. 

The AI-driven batch included startups across a wide variety of industries, including FinTech, healthcare, real estate, construction, marketing, engineering, infrastructure, sales, recruiting, and more.

Why It Matters:

• AI is no longer a buzzword — it’s quickly becoming integrated into numerous business models and industries, changing the way we interact and get things done.

• The concentration of AI startups in YC F24 signals a shift in venture capital priorities, with investors betting heavily on AI as the next major growth driver.

• Industries traditionally resistant to digital transformation, such as construction and real estate, are now embracing AI solutions, underscoring the technology's expanding reach and versatility.

• The rapid proliferation of AI startups increases competition and innovation but also raises concerns about market saturation and differentiation within the space.

The Trend: These startups presented their innovations at the YC F24 Demo Day on December 4th, offering a glimpse into how AI is reshaping the future of business. 

Each launched company had the opportunity to show off their products and visions to an invite-only audience of approximately 1500 investors and media. 

With YC's standard deal now offering $500,000 in seed funding to accepted companies, this batch represents one of the most significant collective investments in AI startups to date. 

Here are a few standout AI-focused companies from the YC F24 batch:

• Forerunner AI is an AI copilot built specifically for aerospace, defense, and hardware engineering companies. The startup’s goal is to help companies in these industries automate critical engineering workflows by accessing data from tools like Atlassian Suite and Microsoft Office and beat tight deadlines by collaborating with hardware engineers to speed up their design and analysis processes.

• Fresco is an AI copilot for construction superintendents, automating manual processes like completing progress notes and punch lists to reduce the amount of time required for such tasks from hours to minutes. The copilot does this by pulling relevant information from video site walkthroughs, which superintendents can record themselves, and formatting it into rich reports.

• Helpcare AI builds AI workers for healthcare organizations that can autonomously identify and reach out to patients and book appointments. These AI workers can conduct outreach in 29 languages, following one of over 50 outreach scripts, and boast an 80% conversation-to-booking conversion rate.

• Another startup focused on building AI employees, Sandra AI does so for car dealerships, starting with AI receptionists. Sandra AI’s car dealership receptionists handle calls, emails, and texts 24/7, automatically scheduling appointments to ensure dealerships don’t miss out on any opportunities to make a sale. Within two weeks of launching, Sandra AI had already signed 22 dealerships, equivalent to approximately $6.6K in monthly recurring revenue (MRR).

Why Is This So Important?

The overwhelming focus on AI in YC F24 represents a significant shift in how startups are positioning themselves to address industry challenges and attract investors. These companies aren’t simply dabbling in AI — they’re embedding it deeply in their core value propositions (and names), and creating innovative AI-powered solutions that promise to streamline workflows, increase efficiency, and boost revenue.

Looking forward, YC’s prioritization of AI-focused startups in its F24 group is likely to influence the next batches of applicants and even the broader startup ecosystem as a whole, as it’s clear where investors are focusing their attention right now.

Help Me Improve Failory

That's all of this edition.

Cheers,

Nico