Forage into the Future #6
On: Superactivity of the Saudi PIF, CRAB Superbug Killer, Magma Energy Projects, A Second-try at Room-Temp Superconductor(!?), Plague Weapons, Anti-Aging Research, and more!
Hi folks! Welcome to another edition of Forage Into the Future!
In this edition newsletter, you can find updates on 🦄Venture Capital & Private Equity, 💻AI, ♻️Energy, 💡Semiconductors, 🛡️MilTech & DefTech, 🚀Space and 🧬Genomics & Biotechnology.
🦄Venture Capital & Private Equity
2023 was a downturn in VC funding. (Though if you ask me, I would say it was less of a downturn and more of a correction in terms of investor sentiment and market reality finally achieving some form of alignment, as investors grew more cautious leading to a higher bar for startups seeking funding).
Globally, there was a 38% decline year over year, reaching $285 billion compared to $462 billion in 2022. However, it's important to note that the overall decrease in funding in 2023 was less severe, at less than 20%, when compared to pre-pandemic years from 2018 to 2020.
This downturn was widespread, affecting early-stage funding (down over 40%), late-stage (down by 37%), and seed funding (down just over 30%).
Funding to U.S.-based startups decreased by 37% to $138 billion in 2023.
Winners: AI was the standout sector in 2023, with global funding reaching close to $50 billion, a 9% increase from 2022. Companies like OpenAI, Anthropic, and Inflection AI (‘foundational model companies’ under the broader AI umbrella) collectively raised $18 billion. Other industries that performed relatively well included insurtech, semiconductors, and battery technology.
Losers: Web3, which had experienced a surge in 2021 and 2022, suffered a steep decline of 73% in 2023, falling from $28 billion to $7.6 billion. Other sectors, including financial services (down over 50%), e-commerce and shopping (down 60%), and media and entertainment (down 64%), also experienced significant declines.
The fourth quarter of 2023 marked the lowest for global venture funding, totaling $58 billion, down 24% quarter over quarter and 25% year over year.
Seed funding reached $7 billion in Q4, down just over 20% year over year from $9 billion. Despite the decrease, it remained a robust funding stage for new companies.
As Series A funding became more challenging to secure, companies were more likely to seek follow-on seed funding.
Early-stage funding took the biggest hit in 2023, with a decline of 32% year over year, totaling close to $23 billion in the fourth quarter.
Late-stage funding was 25% of the volume seen in the peak of Q4 2021, with fourth-quarter funding at $28.6 billion, down nearly 20% year over year.
VC firm Venrock raised $650M for its 10th fund, up from the $450M it managed for its ninth fund back in 2021. Venrock primarily invests in Seed and Series A stages, targeting up to 12 companies annually.
It now plans to get into Series B rounds for the first time through its 10th Fund.
Has deployed over $2.5B since its 1969 inception, backing companies like Apple, Intel, Lucid, Nest, Illumina, and Takeda.
Saudi Arabia’s Public Investment Fund (PIF) outpaced Singapore’s GIC in terms of total funding for 2023.
PIF boosted its investments 52%, reaching $31.6B in 2023.
Overall state-owned investor deployment sinks 20% compared to 2022, at $124.7B. Singapore (46% drop) and Temasek (53% drop) saw major pullbacks.
Gulf Dominance: Sovereign wealth funds from Abu Dhabi, Saudi Arabia, and Qatar claim 5 of the top 10 investor spots. They now control nearly 40% of total sovereign investor deployments. By 2024 end, Gulf governments are projected to manage a combined $4.4T in foreign assets, with sovereign wealth funds controlling ⅔ of that.
💻Artificial Intelligence
Perplexity AI, an AI-powered conversational search engine startup, raised $73.6M at a post-money valuation of $520M. The funding round was led by IVP and included participation from NEA, NVIDIA, Jeff Bezos, and others. Perplexity AI offers generative AI models and has between $5M and $10M in annual recurring revenue with over 10 million active monthly users.
In the last edition, we touched upon instances where people were turning to AI to bring back loved ones they lost, a trend predominantly being reported in China. Recently, a comedy platform called Dudesy created "George Carlin: I'm Glad I'm Dead," an AI-generated special. Carlin's daughter, Kelly, wasn't thrilled. She argued, "No machine will ever replace his genius.” While I am split on the moral spectrum about this, and am more inclined to side with the more emotionally-driven outlook on it, Dudesy's AI comedian dove into topics like U.S. gun culture, transgender issues, Taylor Swift, and the revolutionary potential of AI.
AI Hallucinations: Came across a recent study by Stanford RegLab and Institute for Human-Centered AI found hallucination rates ranging from 69% to a staggering 88% among popular models like GPT-3.5, Google's PaLM 2, and Meta's Llama 2. These models sometimes reinforced incorrect assumptions and overstated their confidence in responses.
AI startup Rabbit's R1, designed by Teenage Engineering, controls your phone's apps with a push-to-talk button. The walkie talkie has a 2.88-inch touchscreen, two microphones, a speaker, a rotating camera, and a unique operating system powered by its Large Action Model (LAM). The first batch of 10,000 R1s sold out in a day, with more available for pre-order.
Microsoft’s AI bets power it past Apple, even if for a little while: Microsoft briefly surpassed Apple as the most valuable U.S. company. This surge could be attributed to its rapid growth and leadership in the generative AI revolution juxtaposed against a decline in shares of Apple, which is facing concerns about weakening demand for iPhones and Macs.
It seems that AI experts from OpenAI, Anthropic, Cohere, and Chinese institutions discussed AI's potential to spread misinformation and disrupt social cohesion at a closed-door meeting in Geneva. The intent is to uncover a safer scientific route for advancing AI technologies through discussions around the risks, policy proposals, technical cooperation, and safety research investments necessary in it.
♻️Energy
Researchers at Microsoft and the Pacific Northwest National Laboratory have unearthed a new material called ‘N2116’ that could slash the need for lithium in batteries by a whopping 70%. This isn't just about saving precious resources; it's a potential revolution for the entire battery landscape.
What is it? N2116 is a solid-state electrolyte (a fancy term for a material that conducts ions within a battery). The current crop of batteries rely on liquid electrolytes, which often contain lithium (to be more precise, battery electrolytes are usually based on an organic solvent loaded with a lithium salt). N2116, however, needs significantly less, reducing our dependence on this environmentally taxing element.
What's even more mind-blowing is how this material was found. Bypassing years of painstaking lab work – Microsoft's AI and supercomputing muscle powered through 32 million potential materials in less than a week, a process that could (would?) have taken decades using traditional methods. This is a glimpse into the future of scientific discovery, where AI acts as a turbocharger, accelerating innovation at breakneck speed.
N2116 is just the tip of the iceberg. This discovery showcases the potential of AI to unlock a treasure trove of new materials with properties we can only dream of today.1
While ‘N2116’ is a promising candidate, but it needs to undergo rigorous testing and development before it hits the streets. Scaling up production and ensuring compatibility with existing battery technology are also hurdles that need to be cleared.
Hawaii's last coal plant has been replaced by a massive battery system, called the Kapolei Energy Storage system. This marks a significant step in the island's shift towards renewable energy sources.
The newly installed battery boasts 565 megawatt-hours of storage. While it doesn't directly match the coal plant's energy output, it complements Hawaii's thriving solar energy sector.
The Kapolei Energy Storage system boasts a whopping 185 megawatts of instantaneous discharge capacity, enough to power roughly 70,000 homes
Each island in Hawaii operates its own independent power grid, disconnected from the others. This isolated setup presents unique challenges and opportunities for renewable energy integration. Despite the push for renewables, Hawaii still relies heavily on oil for electricity generation. However, solar energy has already made significant inroads, reducing this dependency.
The transition has also sparked discussions among residents and observers. Points of interest include the feasibility of using geothermal energy from Hawaii's volcanoes and the economic implications of renewable energy on local communities.
Speaking of using volcanoes for sustainable energy, there’s some mind-boggling news from Iceland!
Iceland’s KMT Project: Remember Jules Verne's Journey to the Center of the Earth? Iceland is about to take a real-life page out of that sci-fi classic. In 2026, the Krafla Magma Testbed (KMT) project will embark on a daring mission: drilling into a volcano's magma chamber to tap into its fiery heart and harness its immense geothermal power.
Magma is hot, like, really hot. We're talking temperatures that could generate ten times more power than conventional geothermal wells. Iceland's cozy homes could become beacons of energy abundance. Magma is also a resource that is constantly replenished by the Earth's core.
While the initial project is in Iceland, the implications are global. If successful, this technology could be adapted to other volcanic regions, paving the way for a geothermal future beyond the Land of Fire and Ice.
Obviously, if its frontier tech - and on this newsletter - there's a catch:
Drilling into a volcano is, well, (stating the obvious) inherently risky. Think fiery geysers, unpredictable tremors and the like when you get too deep into the earth’s core.
The specific geochemistry and structure of the magma chamber play a crucial role. Iceland's Krafla volcano seems like a good fit, but replicating this feat elsewhere might not be as straightforward.
Drilling into a magma chamber is a technological and financial behemoth. Only time will tell if the energy bounty will outweigh the initial investment.
Indonesian EV battery startup Swap Energy secured $22M in Series A funding, boosting its post-money valuation from $46.2M (Aug. 2023) to $76M. The round was led by Qiming Venture Partners with a $12M (~55%) contribution, with participation from GGV Capital and Ondine Capital (who had previously led Swap Energy's pre-Series A1 round with $7.2M in April 2023), who added $8M and $2M, respectively.
Swap Energy focuses on EV charging infrastructure for two-wheelers in Indonesia, with partnerships established with Smoot and Minerva Electrons for charging infrastructure.
They are also collaborating with Grab and Perusahaan Listrik Negara to build an integrated EV ecosystem.
💡Semiconductors
Scientists have achieved a momentous feat: creating the first-ever working graphene-based semiconductor. This breakthrough promises to revolutionize computing, pushing speeds ten times beyond current silicon while potentially opening doors to the elusive world of quantum computers. This is promising for a range of reasons:
Graphene semiconductors boasts electron mobility ten times higher, translating to mind-boggling terahertz operating frequencies.
This also entails ‘breaking the silicon barrier’ in some sense. Silicon, the workhorse of modern chips, is approaching its limits. Its speed, heat generation, and miniaturization capabilities are perhaps about to hit a wall. Graphene can step in to shatter these barriers, ushering in a new era of faster, cooler, and even tinier processors.
While not the sole key to unlocking quantum computing's potential, graphene's unique properties hint at a possible role in its future. Its light-like, wave-like electron behavior could prove beneficial for specific components.
There are still some challenges though: Scale, Cost and Quantum-suitability.
Scale: Scaling up, for instance. Transforming this lab-scale success into mass production requires overcoming significant engineering hurdles.
Cost: Currently, producing graphene remains pricey. Cost reductions are crucial for widespread adoption.
Quantum Conundrum: Whether graphene can outperform existing superconducting technology in quantum computing remains an open question.
An Actual Breakthrough for Room Temperature Superconductivity? Through a collaborative effort between several research institutes, including Institute of Process Engineering of the Chinese Academy of Sciences and the South China University of Technology, researchers have reportedly replicated a significant experiment, suggesting the possibility of room-temperature superconductivity in copper-substituted lead apatite (CSLA). It is claimed that this is a replication of the LK-99 Room Temperature Semiconductor Experiment, which offered great promise but then was later debunked.
The research involved complex and precise methods to fabricate CSLA samples, aiming to minimize ferromagnetism from excessive copper, a market for challenges in creating potential superconducting materials.
Is this the second edition of the story of the ‘Boy Who Cried Ambient-Temperature Superconducting Material’? I don’t know! The scientific community needs to remain cautiously optimistic yet skeptical, given how previous sensational claims in this field have not always withstood rigorous scientific scrutiny.
There is also, very importantly, the lack of a complete Meisner effect (which I won’t explain in today’s newsletter because I’ve been lot of explaining rather simplistic concepts to people in my personal life and am at somewhat of my wit’s end, but you can read it here) and direct DC hysteresis observations.
Even if the research is accurate, the ceramic nature of the CSLA material presents practical difficulties in circuitry use, as ceramics cannot easily form continuous circuits and handle only minimal current. This is a gap between theoretical discovery and practical application.
I wouldn’t pin hopes on this, and would rather wait for more conclusive evidence, such as the demonstration of macroscopic samples exhibiting clear superconducting properties, before fully endorsing these findings. (A stance which I believe most people in the DeepTech community would agree with).
🛡️MilTech & DefTech
Get ready for a future where warfare gets personal, courtesy of engineered pathogens with a taste for specific DNA: A new report by the RAND Corporation (called Plagues, Cyborgs and Supersoldiers) paints a chilling picture of genetically targeted plagues as the next frontier of conflict, raising ethical nightmares and strategic conundrums in equal measure.
Imagine a bioweapon that only targets people with a certain genetic marker, say, a specific hair color or ancestry. This "designer disease" could cripple an enemy nation while leaving their allies untouched, a military dream come true – or a dystopian nightmare, depending on your perspective.
Advancements in gene editing tools like CRISPR make the prospect of tailoring plagues to specific populations terrifyingly real. Scientists can now tinker with viruses with frightening precision, potentially creating designer diseases that exploit pre-existing genetic vulnerabilities.
While the report itself is fairly detailed, some key insights from it:
The document forecasts continued innovation in engineered pathogens, the Internet of Bodies (IoB), and genomics, with a possibility of accelerating advancements in these areas.
The risks include the strategic use of engineered pathogens by nation-states, the siphoning of data from IoB devices, and the potential identification and persecution of minority groups through genomic technologies. Opportunities include the detection of pathogens through IoB, enhancing soldier capabilities through genomic engineering, and efficiently screening soldiers into combat roles.
RAND also suggests revising the Bioweapons Convention (BWC) for stronger protections and bilateral treaties on bioweapons. It emphasizes the need for continued scrutiny of adversary biotechnology advancements, resisting anti-vaccine populism for military readiness, and enhancing the information security of IoB devices, particularly for warfighters.
There's a call to develop conventions for the use of IoB devices in warfighting, especially brain-computer interfaces (BCIs). The need for genomic surveillance in military personnel selection and assignments is highlighted, potentially leading to significant gains in efficiency and cost savings.
Some countries possess strategic advantages in dealing with globally released bioweapons, highlighting the need for the U.S. to be vigilant against both state and nonstate actors. The document underscores the importance of staying current on scientific developments in viral engineering and immunology to anticipate and counter bioweapon threats.
Genomics & Surveillance: For the speculative area of genomics, the document highlights two typologies – genomic surveillance and enhancement. Genomic surveillance, already in use in the private sector and by other countries, tracks viral mutations and surveys microbial evolution. The U.S. Air Force improved the efficiency of pilot selection by 15 percent through the application of genomic tools. Challenges in genomic surveillance include the difficulty in finding robust genotype-phenotype correlations for military roles, partly due to the complexity of the human genome and limitations of current AI in interpreting vast genomic data.
Can Using Genomics in Military Personnel Selection Yield Cost Savings? The U.S. Army washout rates stand at about 6 percent, costing approximately $50,000 for each person who fails to complete basic training. In what a lot of folks would call questionable practice, the report suggests employing genomic surveillance for military personnel selection or assignments could lead to substantial gains in cost and time efficiency by reducing the washout rate and improving the selection process.
Internet of Bodies (IoB) Patents: The analysis of patent applications in IoB technology areas revealed that the United States has a lead of about three to five years in many categories such as input arrangements of EEGs, invasive EEG circuits, and nerve conduction. However, in areas like wearable electrodes and analysis of EEGs, China surpassed the U.S. in 2021 and 2022. China is also quickly catching up in BCIs and is expected to reach parity with the U.S. in IoB human domain biotech areas in the near future.
The US Army is making a significant move to bolster its defenses against loitering munitions, commonly known as kamikaze drones, by seeking to acquire thousands of Coyote Block II and Block III interceptor missiles. Some key takeaways:
The Army wants to acquire 6,000 Coyote Block II missiles with explosive warheads and 700 Block III with non-kinetic payloads, a significant increase from its current inventory, according to the RFI.
Coyotes are air-breathing missiles launched from ground vehicles, helicopters, or ships. They rely on Ku-band radars for guidance and fire control. The non-kinetic option also seems to suggests the Army wants to explore options beyond explosive warheads, potentially for disabling or capturing drones.
Raytheon, the original manufacturer, is the preferred vendor, but the Army is open to other qualified firms. The timeline for the chosen contractor is five years for producing, integrating, and testing the systems.
The US Army's move seems to be a part of a broader global trend towards strengthening defenses against the evolving threat of drones.
🚀Space
Funding came from a diverse group of investors led by Marubeni.
D-Orbit reportedly aims to leverage the funding to diversify its services, venturing into space cloud computing and servicing in addition to the Orbital Transfer Vehicle that it is building.
The funding will support D-Orbit's growth in Europe, the UK, and the US, solidifying its global presence and operational capabilities.
D-Orbit had initially planned a SPAC merger but cancelled it due to market changes post-Ukraine invasion.
D-Orbit is also revisiting its earlier plans for space debris removal, recognizing its potential as a lucrative business opportunity. This renewed focus would address a critical environmental/sustainability safety concern in the space domain.
This funding boost targets critical technology maturation, subsystem design reviews, life support systems (Blue Origin), and Cygnus cargo spacecraft docking upgrades (Voyager Space).
Northrop Grumman withdrawing its own space station project allowed NASA to reallocate its $89 million unspent funds to support Blue Origin and Voyager Space.
NASA is also negotiating "additional content" for Axiom Space's existing contract, potentially involving increased involvement in the future commercial space station. This suggests Axiom's role might evolve beyond the initial docking port agreement.
Concerns exist about the tight timeline for commercial stations to be ready by 2030, potentially leaving a short-term gap after ISS retirement. The true feasibility and timeline will likely become clearer after Phase 2 contracts are awarded in 2026.
🧬Genomics & Biotechnology
The HKDC1 protein plays double duty, acting as a bodyguard for two crucial organelles – mitochondria (the cell's powerhouses - through its interactions with the VDAC) and lysosomes (the recycling centers). HKDC1 helps remove damaged mitochondria, preventing them from wreaking havoc on the cell's energy production. Less mitochondrial mayhem means a younger, more energetic you.
This protein also aids in fixing lysosomes, ensuring efficient recycling of cellular waste. Imagine a tidy cell with sparkling lysosomes – that's HKDC1 in action.
By understanding how HKDC1 protects these key organelles, researchers hope to develop interventions that mimic its effects, potentially slowing down or even reversing cellular aging.
Contrary to what people may believe superficially, this discovery isn't just about vanity. Age-related decline in organ function, neurodegeneration, and even cancer are all linked to cellular aging. HKDC1 could hold the key to preventing these age-associated diseases.
While this is exciting research, it's still early days. Further studies are needed to understand HKDC1's mechanisms in detail and translate them into safe and effective anti-aging therapies. Aging is like a complex multi-million piece puzzle, and HKDC1 is but a small part of that jigsaw.
A new experimental antibiotic, zosurabalpin, has emerged as a powerful weapon against one of the world's most drug-resistant and deadly bacteria, carbapenem-resistant Acinetobacter baumannii (‘CRAB’ because it is undeniably a tongue-twister even for the most blessed of us).
What is the hoopla about, one may think. Well, for starters, this pathogen is classified as a "Priority 1" threat by the World Health Organization due to its prevalence in healthcare settings. And for good reason. CRAB can be fatal in up to 60% of infections, commonly causing urinary, respiratory tract infections, and bloodstream infections leading to sepsis. It accounts for about 20% of infections in healthcare settings like hospitals and care homes. The antibiotic-resistant superbug poses a significant global health crisis, with Gram-negative bacteria causing infections leading to pneumonia, bloodstream infections, and more. The WHO warns that superbugs could cause 10 million deaths per year by 2050 if not addressed.
How does the drug work? Unlike traditional antibiotics that penetrate bacterial cell walls, zosurabalpin targets the bacteria's lipopolysaccharide transport system, ‘LptB2FGC’. This blockade results in toxic accumulation of lipopolysaccharides within the bacterial cell, effectively causing the bacteria to self-destruct.
Zosurabalpin has been tested against over 100 CRAB samples from patients, proving effective in all cases. It also demonstrated efficacy in animal models, reducing bacterial levels in mice with CRAB-induced pneumonia and preventing death in mice with sepsis triggered by CRAB. Currently undergoing phase 1 clinical trials to evaluate its safety in humans. The drug's effectiveness in humans remains to be confirmed, and its potential for resistance is being monitored.
It does have limited effiacy, however. Zosurabalpin is specifically effective against CRAB and may not work against other types of bacteria. This is a double edged swords for dealing against such threats, because while this specificity could reduce the emergence of resistance, it does require accurate diagnosis of CRAB infections for effective usage.
To be fair it is still most likely years away from potential human use, zosurabalpin represents a significant breakthrough in antibiotic development. But it offers a novel approach to combatting drug-resistant superbugs, which have outpaced the development of new antibiotics over the past 50 years.
Biotech has made a strong start to the year in terms of attracting investments and generating traction for startups developing solutions in the sector.
Of the $488.4M invested by VCs in early-stage North American startups in the first week of January 2024, biotech startups secured 58% of the funding (with AI, biopharma, and healthcare startups receiving 16%, 13%, and 9% of the financing, respectively).
The top five funding rounds included OnCusp Therapeutics ($100M), Human Immunology Biosciences ($95M), Moonwalk Biosciences ($57M), Claris Biotherapeutics ($57M), and BioCentriq ($29.2M).
As we predicted in previous editions of the newsletter, interest in the Life Sciences segment (particularly biotech/bioengineering) seems to be ramping up, with Netherlands-based Vico Therapeutics (which is developing therapies for severe neurological diseases) closing a $60 million Series B led by Ackermans & van Haaren, along with Clarametryx Biosciences also closing a $33 million Series A round led by the Ohio Innovation Fund.
Goldman Sachs (through its Asset Management division) closed its debut life sciences VC fund at $650M, surpassing its initial target by $150M.
Set to focus on early and mid-stage therapeutic startups in the fields of diagnosis, disease treatment, and life science tools.
Concentration on precision medicine, genetic medicine, cell therapy, immunotherapy, synthetic biology, and AI-driven oncology.
First-time VC funds raised $11.6B in 2023, the lowest since 2013, while they raised $25.6B in 2022. Though, it would be massively unfair to call anything that comes with the legacy of GS a ‘first time fund’.
This comes on the back of J.P. Morgan - who established a life sciences-focused investment division in November 2022 due to advancements in the sector.
Metagenomi Technologies, backed by heavyweights like Bayer Healthcare and Moderna, is throwing its hat into the U.S. IPO ring, joining a growing lineup of companies eyeing 2024 listings amid the stock market's recent dancing.
Founded in 2018 by UC Berkeley scientists, Metagenomi's mission revolves around the world of genetic disease therapies. Their cash flow? Well, it's mostly coming from collaborations (including a notable one with the ever-prominent Moderna).
Metagenomi's collaboration revenue for the nine months ending in September rocketed to $32.36 million. However, their losses have also increased, hitting $48.96 million compared to $28.97 million just a year prior.
These geniuses from Emeryville are setting their sights on the Nasdaq, and if all goes as planned, they'll be trading under the catchy ticker symbol "MGX." As for the IPO deal team, they've got J.P. Morgan, Wells Fargo, and Jefferies holding the fort as underwriters.
A year back they had scooped up around $275 million in private funding. I will say this again: Biotech is booming!
Thank you so much for reading! Sincere apologies to all my subscribers for taking longer than a week with this update. But hopefully from here on, onwards and upwards!
Imagine batteries that charge in seconds, last for years, and are made from sustainable, Earth-friendly materials – the possibilities are electrifying!