Hey — It’s Nico.

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

These are the 5 most important things:

• Bowery, a leader in vertical indoor farming, has recently shut down — learn why below.

• Lenny Rachitsky shares 11 subversive marketing strategies for startups.

• Posthog’s founder shares tips on how to do sales with no experience.

• Theory Ventures raises $450M for second fund.

• SearchGPT is now fully integrated into ChatGPT — learn how this might change the way we search the internet.

This issue is sponsored by Corporate Sunsetting, the better way to shut down your company.

Let’s get into it.

Be Free of Business Liabilities ^AD

Dispose of your failed company easily – including all liabilities. In just minutes.

Corporate Sunsetting: The better way to shut down your company.

Click here to see how it works.

This Week In Startups

🔗 Resources

11 subversive marketing strategies for startups by Lenny Rachitsky and Alistair Croll.

A visual guide on how VCs value startups.

Why building AI startups requires a different approach than traditional SaaS.

Julian Shapiro shares the secret ingredient behind top startup pitches.

Posthog’s founder shares tips on how to do sales with no experience.

📰 News

Theory Ventures raises $450M for second fund.

BBG Ventures raises new $60M fund to back early-stage diverse founders.

Jack Dorsey’s music startup Tidal announces more layoffs.

Dropbox cuts 20% of staff, citing over investment and underperformance.

AI assistant startup SANA acquires automation startup CTRL and raises $55M.

💸 Fundraising

Food delivery startup Swiggy secures $606M from investors ahead of IPO.

Tola raises $10.2M from Sequoia for its SMB-focused cashflow management platform.

Fintech startup Further raises $4.1M to help people buy homes.

YC-backed Turing College raises €2.5M to transform AI in education.

Fail(St)ory

Vertical Farms

Bowery, a leader in indoor farming, has recently shut down. 

The New York-based company, valued at $2.3 billion at its peak, wanted to transform agriculture with vertical farms producing fresh, sustainable food near urban centers. 

After almost a decade of operation and raising over $700 million in venture funding, Bowery’s vision couldn’t overcome the financial and operational challenges facing indoor farming today.

What Was Lilium: Founded in 2015, Bowery was an agtech pioneer aiming to revolutionize the traditional agriculture system.

The company built large vertical farms in warehouses in New Jersey, Pennsylvania, and Maryland, where crops like lettuce, herbs, and berries were grown indoors using proprietary technology. 

Bowery’s approach used 95% less water than traditional farming, no pesticides, and was powered entirely by renewable energy sources. The company also claimed that its crops were fresher and more nutrient-rich, as they could be delivered to stores within hours instead of days.

Bowery partnered with major grocery retailers, including Whole Foods and Amazon Fresh, quickly becoming the largest vertical farming company in the U.S. The appeal of vertical farming was clear—high-quality produce grown sustainably and delivered faster to consumers. Yet, Bowery and others in this sector faced a steep climb to profitability.

The Numbers:

• 📅 Founded in 2015.

• 💰 Raised over $700 million in VC funding.

• 🌱 Once valued at $2.3 billion.

• 🛒 Partnered with major retailers like Whole Foods and Amazon Fresh.

Reasons For Failure:

• Financial Mismanagement: Bowery’s spending quickly spiraled out of control, with money going to projects and purchases that didn’t directly support growth or profitability. This heavy spending burned through their cash reserves fast, leaving the company vulnerable when funding became harder to secure. In the end, Bowery’s inability to rein in its expenses played a major role in its shutdown.

• High Operating Costs: Bowery’s model depended on advanced technology, controlled environments, and renewable energy, all of which are expensive to maintain at scale. While vertical farming promises sustainability, it also comes with high fixed costs that can be hard to offset, especially without steady revenue. For Bowery, scaling these operations became financially draining.

• Industry-Wide Struggles: Bowery wasn’t the only one struggling in the indoor farming industry. Several prominent companies in the vertical farming space, including AeroFarms, AppHarvest, and Kalera, filed for bankruptcy in the last year. The promise of vertical farming as a sustainable alternative has yet to overcome the high costs and operational risks associated with it.

Why It Matters:

• Managing complex tech like vertical farming comes with hidden costs that can quickly outweigh benefits if not controlled.

• The shutdown adds to a string of high-profile vertical farming failures, signaling broader issues within the indoor farming sector that go beyond any single company.

• Even with advanced technology and large investments, Bowery couldn’t make the economics work at scale—an issue every AgTech startup faces.

Trend

SearchGPT

SearchGPT is now fully integrated into ChatGPT.  After months of anticipation, it’s finally here. 

Let’s unpack what this means, how it reshapes the search engine landscape, and what it means for SEO.

Why It Matters:

• A New Way to Access Information: SearchGPT now has a dedicated toggle button within ChatGPT, allowing users to pull in real-time web info with ease. 

• Redefining SEO: With SearchGPT in play, traditional SEO rules could be shifting. Optimizing content for Google might not be enough anymore, you will also have to optimize it for AI search engines.

• New Partnerships with Publishers: OpenAI is making moves to support publishers by forming direct licensing partnerships with major players like AP and Reuters.

• The AI Search War Intensifies: The integration of SearchGPT isn’t happening in a vacuum. Big players across the tech landscape, like Meta, are doubling down on conversational search.

The Future of Search: With SearchGPT now integrated into ChatGPT, OpenAI has pushed conversational AI to the forefront of search. This move marks the start of a new search era, and other tech giants are racing to adapt.

Meta, for example, has been quietly developing its own AI-powered search engine for the past eight months. Google has also been implementing its own LLM, Gemini, into their search results. Then there are startups like Perplexity, designed from the ground up to be AI-first search engines. 

The shift is clear: AI is changing how we search online. Instead of relying on keywords, users can now type in questions and get quick, relevant responses. The AI handles the heavy lifting. It picks the search terms, selects websites, reads through them, and then summarizes the information for you.

What This Means for SEO: While AI-driven search engines like SearchGPT are growing, SEO is evolving. 

In the Google era, SEO revolves around keywords, backlinks, and structured data. Google ranks pages based on keyword relevance, site authority, and how well a site matches specific queries.

With AI search, the focus shifts from keywords to content that answers questions directly. Instead of browsing links, users now receive direct summaries. For businesses, this could mean moving away from keyword-stuffed posts and focusing on clear, factual content AI can easily interpret.

Content will have to be well-structured and context-rich. AI search tools may prioritize clear, informative articles over keyword-heavy pages. Instead of generic posts, companies might need to create focused content that anticipates user questions.

In addition, OpenAI’s partnerships with major publishers suggest a new priority on quality sources. Trusted, well-sourced information could see more visibility, pushing businesses to build authority with transparent data and reliable sources. It seems likely that more and more publishers might try to partner with OpenAI.

That said, it’s all still unfolding. While AI search tools like SearchGPT are making waves, it’s unclear how much they’ll truly disrupt traditional SEO. 

Google isn’t going anywhere, and many businesses will likely keep optimizing for both. We may see shifts, but whether AI search fully redefines SEO or just adds another layer remains to be seen.

So, what do you think?

Help Me Improve Failory

That's all of this edition.

Cheers,

Nico