Another YC alum is in the press, startups are shutting down, and a founder feels unfulfilled.

We’re starting off the New Year with a wave of startups shutting down abruptly after raising significant amounts of money. This trend isn't new; Q1 of 2024 saw a 58% increase in startup failures compared to the previous year, with 254 venture-backed companies closing their doors, according to Carta.

On the flip side, even the founders who succeed, like Loom co-founder Vinay Hiremath, share that they feel unfulfilled—despite getting rich, taking time off to hike the Himalayas, working for Elon, and moving to Hawaii. (For me, fulfillment in this case might look like throwing my phone off a cliff and spending the rest of my life picking berries by the ocean.) Vinay recently published a blog post that offers a glimpse into the mind of someone who made it. I appreciated his viewpoint and think many can resonate with the question he asks himself: “What is wrong with being insignificant?”

This will be a big conversation in the tech world over the next few days.

Now, let’s get into the startups that aren’t having a great start to the New Year.

Startups

• Volocopter, a German air taxi maker, has filed for insolvency after raising over $600M. It turns out eVTOL development is very cash-intensive. The US competitors Archer and Joby Aviation are projected to lose over $1B combined in 2024. Volocopter plans to maintain operations and deliver a restructuring plan by February, with the race to secure financing and regulatory approval still underway. (Volocopter)

• The New York-based benefits startup Level shut down after a failed acquisition, leaving a small team to support customers. Benefits plans beyond 2024 will terminate at the end of January 2025, and claims can be submitted through January, with plan funds returned shortly after. Founded in 2018, Level had raised $27M in 2021, aiming to simplify insurance for employers and employees. (Pymnts)

• The accounting startup Bench shut down out of nowhere, locking out customers. Employer.com, an HR tech company, saved the day and acquired the company, and Bench is selectively rehiring staff to manage the transition. Employer.com plans to revive Bench’s platform, allowing customers to retain services or access their data. (TechCrunch)

… Let’s try to make this section a bit more optimistic.

• Blackbird, the restaurant loyalty app founded by Eater co-founder Ben Leventhal, has launched the Blackbird Beer Club. For $25 per month, members get a free beer daily at select bars and breweries in the Blackbird network, plus limited edition beers and merch, a subscription to the Canned newsletter, and 2,500 $FLY rewards for their next tap-in. Maybe I will check it out after Dry January. (Cool Stuff)

• Flipboard’s new app, Surf, is designed to help users discover content across the decentralized web, pulling together content from Mastodon, Threads, Bluesky, RSS feeds, podcasts, and YouTube into customizable feeds you can set and forget. It’s designed to be personal and human-curated, not driven by algorithms. Still in beta, Surf has a playful ~vibe~, with plans to make it even more accessible across platforms and shareable on the federated web. (Fast Company)

Recent Raises

• KoBold Metals raised a $537M Series C round, co-led by T. Rowe Price and Durable Capital Partners. With backers like Bill Gates and Jeff Bezos, it's no wonder the company is valued at $2.96B. Having raised $1B so far, KoBold Metals aims to compete with Chinese rivals in producing metals such as copper, lithium, and nickel for applications ranging from electric vehicle batteries to the defense industry.

Big Tech

• The US Justice Department and FTC are suing app-based cash advance company Dave and its CEO, Jason Wilk, for allegedly misleading users and violating federal laws. (Jason highlights his YC Alumni status in his X bio️‍!!!!) The claims include allegations that Dave falsely advertised $500 cash advances, charged hidden fees, misused customer tips, and made it difficult to cancel recurring fees. The fintech company denies the allegations and has introduced a simplified fee structure, removing tips and express fees, which is already being rolled out to new and existing customers. (Reuters)

• Apple has pulled the plug on its iPhone subscription service, which aimed to let users pay a monthly fee and upgrade their phones every year. The project faced delays, bugs, and tough regulations, so it never got off the ground. Earlier this year, Apple also shut down its Pay Later program for similar reasons. Both ideas were meant to boost recurring revenue and keep customers hooked, but Apple decided it wasn’t worth the hassle. For now, they’re sticking with third-party services like Affirm and Klarna instead. I am still not a fan of BNPL services. (Bloomberg)

Around the World

• Mexico will launch an app in January 2025 to help migrants notify relatives and consulates if detained by US immigration agents. (Axios)

• Chinese hackers breached a sensitive Treasury Department office, accessing unclassified sanctions documents through a compromised security key from a contractor, BeyondTrust. This is part of a pattern of cyberattacks linked to China, including other recent government and telecom hacks. (Washington Post)

• Countries like Finland, Canada, and the US are testing passport-free travel using facial recognition and digital travel credentials. (Fun fact: I once got on the wrong flight to Finland and didn’t realize it until I got to my Airbnb.) (Wired)

Culture

• The worst tweets of 2024. (Gizmodo)

• Anthony Pompliano shared his top 10 books from 2024. (Substack)

• OnlyFans CEO Keily Blair sat down with the WSJ to discuss building a safer platform for adult content and why she believes the platform can be one of the safest digital spaces. The comment section wasn’t happy. (WSJ Instagram)

• The Whitney is free for everyone under 25. Advance tickets are still recommended, so don’t forget to plan. (Whitney)

Thanks for reading! Let me know what you think.
- Rachel Braun

Subscribe to Braun & Brains