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AI Startup Wonderful Hits $5 Billion Valuation, Plans 1,000-Strong Team
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By Yuliya Chernova, WSJ Pro
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Good day. Wonderful, a startup that helps large enterprises deploy artificial intelligence, has raised $550 million at a $5 billion valuation to fund a worldwide hiring spree.
Insight Partners, a returning investor, led the Series C round with a $150 million check. Enterprise software company Salesforce is the only new backer in the transaction, with the remaining capital coming from prior investors, including Index Ventures, IVP, Vine Ventures, 9Yards and Bessemer Venture Partners.
Additionally, investors paid $170 million, with $150 million of that coming from Insight, for shares from employees and early angel investors through a secondary transaction.
Founded early last year in Tel Aviv by Chief Executive Bar Winkler and Chief Technology Officer Roey Lalazar, Wonderful has now raised more than $800 million. It was valued at $2 billion in a prior round in March.
Armed with all that cash as well as an annualized revenue run-rate of $70 million—up from $1 million a year ago—Wonderful is pulling out all the stops to get market share, including an ambitious recruitment drive.
It also plans to start making acquisitions in local markets where it wants to expand, Winkler said.
Wonderful employs about 650 people, which is more than 10 times its staffing level a year ago, and plans to have a workforce of more than 1,000 by year-end.
While some AI startups tout their lean team sizes, data suggests that, overall, AI companies are leading a hiring acceleration. The median head count for a Series D-stage AI company in the U.S. was 366 in the first half of this year, compared with 234 for a non-AI company, according to a recent report by J.P. Morgan.
“In enterprises, there are no magic solutions outside of hiring great people to work with the customers,” Winkler said, adding, “Wonderful doesn’t hire for the sake of hiring.”
Jeff Horing, Insight’s co-founder and managing director, who’s on Wonderful’s board, said that fast head-count growth has risks. “Sometimes it ends in tears, where the demand dries up and you’ve got a lot of talent that is not deployed.”
Horing said he’s betting that won’t be the case with Wonderful. Early projects are already proving the investment is paying off, he said. “You can see the economics are right side up.”
Read the rest of this article here.
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And now on to the news...
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Jason Isbell and the 400 Unit performing in New Orleans in April. AMY HARRIS/INVISION/AP
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Imitation blues. A group of musicians led by Jason Isbell is suing artificial-intelligence music platform Suno, alleging the company allows its users to generate copycat songs based on artists’ names without their permission. The lawsuit, which is seeking class-action status, sets up a public fight over an unsettled question simmering in the music industry: how artists will assert power over their identities in the messy rise of AI music.
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$25 Billion
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The amount by which Dell Technologies lifted its full fiscal year revenue outlook.
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OpenAI to Restrict Astra Model After Rating It ‘Critical’ Cyber Risk
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OpenAI is limiting the release of a new model it deems capable of pulling off automated cyberattacks, adding layers of security after a swarm of its AI agents hacked a company earlier this summer.
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The ChatGPT maker said Tuesday that its internal testing had determined that the forthcoming model, called Astra, is capable of devising and executing novel cyberattacks against difficult targets with only limited human input. As a result, the company said in a blog post, it has added additional layers of security to reduce the risk of misuse by hackers, or Astra going rogue and hacking targets on its own.
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Blackstone Backs Cybersecurity Startup Huskeys
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Blackstone is placing an early bet on Huskeys, a cybersecurity startup building an artificial intelligence gatekeeper to protect companies from the growing chaos of automated web traffic. The firm’s early-stage venture-capital arm, Blackstone Innovations Investments, led a $27 million Series A investment that values the year-old company at more than $100 million.
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People
Financial technology company Capitolis appointed Murugan Manickam as chief technology officer. He was previously at Bank of America.
Exits
Palo Alto Networks acquired Console, a Thrive Capital-backed AI-native platform enabling agentic capabilities.
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HyImpulse Technologies, a Germany-based developer of small satellite launch vehicles with hybrid rocket propulsion, secured more than €50 million in Series A extension funding. Join Capital and Ace Capital Partners co-led the round, which included participation from North Ventures, Bayern Kapital and others.
AIR, a startup building an inline firewall for agents, emerged from stealth with $50 million in funding. Sequoia Capital and Greenoaks co-led the investment, which included participation from Swish Ventures. The company is based in New York and Tel Aviv.
SciFin, a startup helping revenue teams turn fragmented information into actionable insights, emerged from stealth with $44 million in seed funding co-led by Altimeter and Madrona.
Odyssey Energy Solutions, a Boulder, Colo.-based platform for financing distributed renewable energy projects in emerging markets, raised $74 million in equity and debt funding. Investors including Broadscale Group, Al Mada Ventures, Union Square Ventures, Equal Ventures and Abstract Ventures contributed to the $27 million equity portion of the round.
Empirik, a San Francisco-based startup offering an autonomous infrastructure engineer, was seeded with a $21 million investment from Sequoia Capital, S32, Canapi Ventures and Alumni Ventures.
Critical Materials Group, an Austin-based defense tech startup, snagged $10.3 million in seed funding led by Overmatch Ventures.
Aranya, a San Francisco-based startup that converts bare metal into production-ready clusters for inference providers, AI startups and data centers, has secured $11 million in funding, including a $9 million seed round led by First Round Capital.
Newlight, a San Francisco-based maritime energy technology startup, nabbed $9 million in seed funding from investors including Undeterred Capital, CiRi Ventures and Fusion VC.
Blue Voice, a startup offering an AI assistant for police officers, emerged from stealth with $6 million in funding from investors including SignalFire, Las Olas Venture Capital and Govtech Ventures.
S-Transistors, a Finnish startup developing a new class of transistors for quantum computing, fetched €2.6 million in pre-seed funding led by Lifeline Ventures.
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THOMAS R. LECHLEITER/WSJ
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How a Goggles Reminder Led to a Million-Dollar Investment
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For our latest Deal Talk installment, we turned to Kate McAndrew, co-founder and general partner of Baukunst. The firm, along with NextView Ventures, co-led a $3.5 million pre-seed funding round for Fambot, an AI “chief of staff” for parents. Fambot reads school-related emails, newsletters, calendar invites and group chats and sends a daily summary.
A lot of investors are skeptical about the AI app layer. Why is Fambot different?
KM: Companies that solve real consumer pain points, win. I have no aspiration to hang out with a humanoid robot, but I desperately want help figuring out what I need to know from the 42 WhatsApp messages, three app notifications and two school newsletters that arrived while I was at work. I know I am not alone.
Any fun/colorful stories from meetings with founders?
KM: I met [David Reich, Fambot's CEO and co-founder] at a lunch I hosted about AI and modern parenting, then discovered I’d been dancing beside his wife in rehearsals for the SF Carnaval parade for weeks. We had both talked constantly about our kids and being a working parent without realizing they were married—which feels fitting, because I met Dave as a CEO and a dad at exactly the same time.
Did you use Fambot as part of the due diligence process? How did it perform?
KM: I did! The alpha noticed my son’s first swim lesson on the calendar and proactively made me a checklist. You could say we invested a million dollars because Fambot remembered the goggles before I knew I was about to forget them. It’s literally in our investment memo.
Some parents deal with the deluge by ignoring most of it. Why do they need Fambot?
KM: I don’t need to attend my kindergartener’s fashion show, but I want the chance to choose. I’m not reading 45 emails to uncover it, but I will read one bullet on a five-bullet list.
If you were to compare this startup to a movie or TV show, which one would it be?
KM: I like to imagine I’m Lorelai Gilmore, and Fambot is quietly handling the logistics so I can live in Stars Hollow without staring at my phone. Less inbox, more diner hangs, town meetings and magical festivals in the town square.
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