Hey — It’s Nico.

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

These are the 5 most important things:

• Northvolt, a Swedish battery maker that raised over $13B has filed for bankruptcy — learn why below.

• Carta shared 50 slides packed with insights for founders from 45,000 startups. 

• Greg Isenberg shared 35 startup ideas in AI and SaaS.

• Amazon doubles down on AI startup Anthropic with another $4B.

• Antropic introduced MCP, a new standard that simplifies AI integrations — learn why this is big for AI below.

Let’s get into it.

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This Week In Startups

🔗 Resources

Lenny Rachitsky and Jen Abel on how to approach founder-led sales.

Carta shares 50 slides packed with insights for founders from 45,000 startups. 

35 startup ideas in AI, SaaS and more.

A 4-step framework to approach B2B sales.

Your 2024 guide to SaaS benchmarks.

📰 News

Coatue alums Michael Gilroy and Gokul Rajaram aim to raise $400M for their debut fund.

Bending Spoons acquires Cloud-based streaming platform Brightcove $233M.

Wiz acquires cloud security remediation Dazz for $450M to expand its cybersecurity platform.

Humanoid robot Figure 02 boosts efficiency by 400% at BMW plant.

Data shows YC often funds startups that replicate others in its portfolio.

💸 Fundraising

Amazon doubles down on AI startup Anthropic with another $4B.

Indian delivery startup Zepto raises $350M ahead of IPO.

Cardless secures $30M to innovate co-branded cards.

YC-backed Circleback raises $2.5M seed round for AI-driven meeting notes and automations.

Fail(St)ory

Burning Through Billions

Northvolt, the Swedish battery maker once seen as a key player in Europe’s electric vehicle (EV) future, has filed for Chapter 11 bankruptcy. This is a tough blow for Europe’s efforts to build a greener, more independent EV industry.

Let’s break down what happened and what lessons we can take from it.

What Was Northvolt: Founded in 2016, Northvolt set out with a big goal: to break Europe’s dependence on Asian battery suppliers and become the go-to source for electric vehicle (EV) batteries. 

The company quickly garnered support from governments, investors, and automakers, raising a staggering $13.8 billion. Northvolt's promise of a local, reliable supply chain aligned with Europe's push for sustainability and energy independence.

With the funding, Northvolt set out to build one of Europe’s largest gigafactories in northern Sweden. The idea was to power the plant entirely with renewable energy, mainly hydropower, to produce batteries with a smaller carbon footprint. But earlier this year, construction stopped due to financial troubles.

At its peak, Northvolt employed 6,600 people across its operations. The company was touted as a pillar of Europe’s green transition—until cracks began to show.

The Numbers:

• 📅 Founded: 2016

• 💰 Total Funding: $13.8 billion

• 🧑‍💼 Employees: 6,600

• 📉 2023 Net Losses: $1.2 billion

Reasons For Failure:

• Weak Market Demand: Despite the global EV push, demand for electric vehicles in Europe has softened, leaving automakers with excess inventory and scaled-back ambitions. Some automakers, including Northvolt's clients, delayed or downsized electrification projects, directly impacting Northvolt’s revenue pipeline.

• Operational Challenges: Scaling production is notoriously difficult, particularly in an industry as capital-intensive as battery manufacturing. Northvolt struggled to meet delivery timelines, losing a $2B contract with BMW in June after delays earlier in the year. 

• Leadership Missteps: Northvolt tried to scale too quickly, taking on ambitious projects (like their green gigafactory) without ensuring its core operations were running smoothly. Former CEO Peter Carlsson admitted, “I should have probably pulled the brake earlier on some of the expansion paths in order to make sure that the core engine was moving according to plan.”.

• Financial Mismanagement: Northvolt's financial health deteriorated sharply, with net losses escalating from $285 million in 2022 to approximately $1.2 billion in 2023. Despite raising $13.8 billion in funding, the company generated only $128 million in revenue in 2023, highlighting a severe imbalance between income and expenditure. 

Why It Matters:

• The slowdown in EV demand reveals how quickly market conditions can shift, even in industries considered the future of transportation.

• Burning through $1.2 billion in a single year demonstrates how financial mismanagement can sink even the best-funded companies.

• Peter Carlsson’s realization is good advice for any founder: focus on getting the core business right before chasing big expansion plans.

Trend

MCP: AI’s New Toy

This week, Anthropic introduced the Model Context Protocol (MCP)—a new standard designed to make it easier for developers to connect AI tools like Claude to all kinds of data sources, from Slack to SQL databases. If you’ve ever spent hours writing boilerplate code just to get your AI app talking to a database, you know how painful this process can be. MCP aims to change that.

Why It Matters:

• Less Messy, More Focused: Developers won’t need to write custom code for every integration anymore. MCP streamlines the process with a single, consistent protocol.

• A Universal Solution: It works across local and remote data sources, covering everything from private files to APIs like GitHub.

• A Competitive Edge: Companies using MCP are already finding ways to make their AI tools smarter and faster.

What MCP Does: At its core, MCP is a protocol that standardizes how AI tools interact with data. Think of it as the middleman that handles the tricky parts of making systems talk to each other.

Without MCP, developers have to create custom integrations for every data source—one for GitHub, another for Slack, and so on. MCP cuts through that noise by providing a single framework that works for both local resources (like your database) and external APIs.

Here’s how it works: developers can set up their systems to either share data via an MCP server or connect AI-powered tools (like a chatbot or an agent) to that server as a client. This means the protocol is flexible enough for a wide range of use cases, whether you’re pulling context for a coding task or analyzing customer data in real time.

For example, imagine you’re using an AI coding assistant powered by MCP. Instead of relying on pre-defined prompts or limited context, the assistant could pull live updates from GitHub repositories and connect them with your internal project management tools. That means it doesn’t just know what you’re coding—it understands the bigger picture, giving you solutions that actually fit.

Why Is This So Important?

The great thing about MCP is how much smarter AI tools can become because of it. With MCP, data is no longer locked up in silos. AI can access relevant information directly and in real time, whether it’s from a local database or a cloud-based API. This leads to faster, more accurate outputs, which is especially valuable for tasks like writing code, analyzing datasets, or automating workflows.

Just take a look at some the things people have already been doing:

• With MCP, Claude can now edit and create files locally.

• It can also connect to GitHub and create repositories:

This universal access is already making waves. Platforms like Replit and Sourcegraph are using MCP to enhance how their AI systems assist with coding. By giving AI better context, they hope to see fewer mistakes and more usable results in less time. Developers benefit from tools that understand not just the task but the environment around it—turning what used to take hours of debugging into minutes.

And it’s not just about efficiency. MCP opens the door to more autonomous AI. By maintaining context across multiple tools and datasets, AI agents can perform more complex tasks, like updating systems automatically or making data-driven decisions without needing constant input. It’s a small change in how systems are built, but it has massive implications for how AI can support businesses.

So, what do you think?

Help Me Improve Failory

That's all of this edition.

Cheers,

Nico