Hi everyone! 🙋We have the following key startup and tech industry updates for you today!📣
- M3ter raised $14M to expand its usage-based pricing tools
- OpenAI raised another $300 million from VCs
- Dropbox has laid off 500 people and plans to evolve into AI
M3ter Raised $14M to Expand Its Usage-Based Pricing Tools for SaaS Businesses
The usage and pricing models of software have been transformed by the advent of SaaS business models. SaaS allows customers to pay monthly or annually rather than having to purchase the software upfront. Taking it a step further, M3ter, a London-based startup, is developing tools for even more detailed usage-based billing.
The company has raised $14 million in its Series A fundraising round to expand into other regions like the United States, and to build out more technology for its users. The round was led by Notion Capital, with participation from Insight Partners, Union Square Ventures, and Kindred Capital. Last year, the startup had raised $17.5 million in a seed round. So far, the company has raised $31.5 million from top-tier venture capitalists.
By integrating usage data, applying pricing, and generating error-free invoices, the M3ter Platform powers all kinds of usage-based pricing for businesses of all stages. Companies can free up key internal resources, produce accurate invoices consistently, and prevent revenue leakage by automating pricing and billing with M3ter.
This latest funding comes at an opportune time for M3ter. Usage-based pricing is becoming increasingly popular among B2B SaaS companies. Research shows that nearly 3 in 4 SaaS companies already use some form of usage-based pricing. The flexibility it provides is attractive to customers. Meanwhile, it enables companies to maximize revenue.
As more businesses adopt usage-based models, the need for automated tools like M3ter‘s will continue to grow. Companies using usage pricing manually face challenges like tracking complex usage data across products and customers, determining optimal pricing, and efficiently generating invoices. M3ter‘s platform solves these problems with its automated usage data integration, pricing engine, and billing generation.
The funding will allow M3ter to build on its early traction in Europe and expand internationally. The company plans to use the investment to grow its headcount, enhance its product capabilities, and establish operations in the sizable US market.
Backers praise M3ter‘s strong founding team and clear vision. The startup was founded in 2021 by CEO James Haslam, CTO Peterobutton, and CPO Jelle Visser. The three founders previously worked together at navigation app Wise.
Investors are also bullish on the large market opportunity. Research firm Gartner estimates that by 2024, more than 50% of B2B SaaS revenue will be tied to usage-based pricing models. As more companies switch to usage pricing, M3ter is poised to become the leading enabler of data-driven recurring revenue for SaaS businesses.
The SaaS market itself continues to experience rapid growth. It is forecast to reach $580 billion in revenue by 2025. Within that fast-growing market, usage-based pricing unlocks significant additional revenue potential that M3ter can help SaaS companies realize.
In summary, M3ter‘s compelling value proposition, experienced team, and vast market potential make it an exciting company to watch in the usage-based SaaS pricing space. The new funding will fuel the next phase of its journey as it scales up internationally.
OpenAI Raised Another $300 Million from VCs
Despite Microsoft‘s massive investment in OpenAI, the prominent generative AI company OpenAI continues to attract new backers. Recently, a consortium of venture capital (VC) firms contributed $300 million, sending the company‘s valuation skyrocketing to a staggering $29 billion. Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global are among the VC firms that acquired equity stakes in this trailblazing AI tech startup.
OpenAI received an investment from Microsoft in January, though neither company disclosed the amount. Reports estimate Microsoft has invested upwards of $13 billion in OpenAI so far. The Wall Street Journal reported on a potential tender offer for OpenAI shares, with Founders Fund and Thrive Capital participating in a $300 million share tender that valued the company around $29 billion.
This latest fundraising comes on the heels of OpenAI‘s white-hot chatbot ChatGPT launching to the public for free in November 2022. ChatGPT quickly amassed over 1 million users in just 5 days, demonstrating the mainstream appetite for AI assistants.
ChatGPT showcases OpenAI‘s natural language prowess. The chatbot can understand complex prompts and generate surprisingly human-like responses on nearly any topic. It displays common sense, creativity, and nuance beyond previous conversational AI systems.
The accessible ChatGPT is just the tip of the iceberg for OpenAI‘s technology. The startup was founded in 2015 with the mission to develop artificial general intelligence (AGI) that benefits humanity.
Backed by Silicon Valley luminaries like Elon Musk and Sam Altman, OpenAI has produced a string of advanced AI systems over the years. It open-sourced the GPT-3 language model in 2020, which kickstarted the recent wave of generative AI applications.
OpenAI‘s rapid progress makes it a coveted investment. Despite hefty capital requirements, investors see its transformative AI research as extremely valuable.
The latest funding round attracted top-tier VC firms in addition to Microsoft. Well-known names like Sequoia Capital, Tiger Global, and Andreessen Horowitz invested alongside Thrive Capital, which led the round.
Their interest stems from OpenAI‘s pole position in artificial general intelligence. As AGI capabilities progress, OpenAI is positioned to power a new generation of revolutionary technologies across industries. Its sizable war chest empowers it to hire more top AI researchers and aggressively advance its R&D.
All this investor enthusiasm has driven OpenAI‘s valuation skyward. Its $29 billion valuation exceeds that of many public tech companies and makes it one of the most valuable private startups globally.
However, OpenAI faces challenges too. Safety and ethics are constant concerns around general artificial intelligence. As its systems grow more powerful, OpenAI must ensure they remain under control and benefit society.
Competition is also rising. Large tech companies like Google, Meta, and Baidu are pouring resources into AI development. Upstart AI labs like Anthropic are also emerging. Still, OpenAI‘s head start and singular focus give it an edge for now.
The future looks bright for OpenAI with its deep pockets and preeminent AI capabilities. Powered by its recent mega-funding, OpenAI is poised to push the boundaries of artificial intelligence and usher in an AI-first future.
Dropbox has Laid off 500 People and Plans to Evolve into AI
Dropbox has made the decision to downsize its staff, parting ways with nearly 500 employees which represents around 16% of its workforce. According to a staff memo from CEO Drew Houston, the layoffs are a response to the ongoing macroeconomic challenges and uncertainty. However, the company is looking to focus on growing its AI capabilities through this move.
In his memo, Dropbox CEO Drew Houston noted the layoffs are a "necessary change to ensure we are set up to thrive in the new era of AI…" He believes embracing AI will allow Dropbox to transform its current products and build new innovations, but this will require the company to work differently.
The layoffs impact teams across the organization. Dropbox did not specify which roles or teams were most affected. But the company had swelled to over 3,000 employees after years of rapid hiring. It‘s now looking to streamline and direct more resources towards AI opportunities.
This shakeup comes amid a precarious economic environment. High inflation, rising interest rates, and fears of recession have led many tech companies to cut costs and trim headcount. Dropbox acknowledged that the current climate requires tighter spending.
However, Dropbox also aims to pivot towards AI more aggressively. In his memo, Houston wrote: "The AI-powered workplace is the future of Dropbox, and we need to make changes to fully embrace it."
The file hosting company likely sees AI as vital to boosting its products‘ utility and intelligence. As workplace tools grow smarter and more automated, AI integration will become table stakes.
Dropbox may look to enhance search, workflow automation, data insights, and personalized recommendations using AI. It already utilizes some machine learning technology in products like its intelligent search engine.
But the company now wants to supercharge its AI focus. This probably involves expanded research teams and partnership initiatives.
Dropbox could integrate AI from OpenAI as part of this push. It recently announced support for GPT-3 in its Dropbox Docs product and seems keen to incorporate generative AI where useful.
The layoffs will free up budget to pour into AI R&D and hire specialized talent. Dropbox aims to lead in transforming legacy workplace tools with AI, rather than playing catch-up.
However, executing this pivot will be challenging. Significant redundancies indicate this shift requires major cultural and operational changes too. AI talent remains scarce, and costs are tremendous.
But as one of the first movers in consumer cloud storage, Dropbox has shown ability to evolve with market changes before. It added enterprise file sharing capabilities and expanded into workspace collaboration tools.
Now valued at $8 billion, Dropbox still claims over 700 million registered users. Its strong brand and distribution give it the foundation to potentially reinvent itself again as an AI-first productivity suite.
This will be a high-stakes transformation given the layoffs involved. But leaning into AI looks to be Dropbox‘s moonshot play to stay relevant in the future of work. If it pays off, the payoff could be immense.