### Phoenix's Rise as a Tech Hub

Phoenix Mayor **Kate Gallego** is on a mission to transform the city into a burgeoning **tech hub**. Recently, Arizona startups showcased their innovations at **CES**, the world's largest tech event.

### Innovations on Display

Among the standout companies were **"The Pause,"** an **AI-powered menopause symptom-tracking app**, and **"Paw Port,"** a **smart pet door**. These startups demonstrated their potential while competing against global tech giants.

### Local Support and Future Needs

Founders emphasized the significance of Arizona's local support, citing resources from **AZBio** and the **Arizona Commerce Authority**. However, they also pointed out the pressing need for **increased investor interest** and incentives to nurture and retain startups in the state.

![Phoenix Startups at CES](https://x-default-stgec.uplynk.com/ause/slices/c42/5c3d34b8b29a45469a86c02775b7a2cf/c424ca572ff641b1802f7957eaaa09b6/poster_15efbb5b040f4bd2a62ecb244bba71dc.jpg)

*Watch the video above to learn more about the tech innovations presented at CES.*

Phoenix Mayor Kate Gallego is working to establish the city as a rising tech hub, and this week, Arizona startups made their mark at CES.

How Phoenix Startups are Shaping the Future of Tech at CES

### Overview of Oregon's Venture Capital Landscape
Investment in **Oregon’s startups** has dramatically decreased, reaching its **lowest level since 2017**. In **2024**, entrepreneurs in the state raised **$555 million**, marking an **8% decline** from the previous year and a staggering drop from the **$2.7 billion** invested in **2021**.

![Oregon Venture Capital](https://www.oregonlive.com/resizer/v2/FAKZ4FYLFVHVHEP4UCDXM2IEFQ.jpg?auth=3a1c5b0ec299984c9536bce678edd3481921feed953b6fd73c494f8e33252ce4&width=500&quality=90)

### Key Players in the Startup Scene
Despite the downturn, some notable **Oregon startups** managed to secure significant funding, including:
- **Eclypsium** (internet security) 
- **Hydrolix** (online data management) 
- **Boulder Care** (telehealth)  
Each of these companies raised **$35 million** last year.

### The Impact of Remote Work
Venture capital has historically played a minor role in Oregon's economy. The rise of **remote work** has further diminished its local impact, as many employees now work from different states or countries, diluting the connection to Oregon's economy.

### National Context
While Oregon's venture capital scene struggles, the national landscape tells a different story. In **2024**, investors across the U.S. completed **$209 billion** in deals, a **30% increase** from the prior year, though still below the **2021 peak** of **$255 billion**. However, many startups are facing challenges in cashing out, either through sales or public offerings.

### Market Challenges Ahead
Factors such as **inflation** and rising **interest rates** have created an **“unfriendly environment”** for young companies looking to buy or sell. This slowdown in exits is hindering new investments. The **National Venture Capital Association** (NVCA) suggests that the market is currently in a state of waiting, with no significant increases in fundraising or deal-making expected soon.

### Looking Forward
The NVCA forecasts a **slow recovery** starting in **2025**, anticipating lower interest rates and a more favorable climate for acquisitions under the incoming administration. This could potentially rejuvenate the startup ecosystem in Oregon and beyond.

In strong years, venture investment fuels the startup scene. 

Oregon's Venture Capital Plummets: What It Means for Startups in 2024

![Divvy Homes](https://media.beehiiv.com/cdn-cgi/image/fit=scale-down,format=auto,onerror=redirect,quality=80/uploads/asset/file/c41084b2-ee48-43d1-8e09-1b65af41f47f/Screenshot_2025-01-13_at_7.55.49_PM.png?t=1736816159)

**Divvy Homes**, once a promising rent-to-own startup, is undergoing a **dramatic acquisition** by **Maymont Homes**, a division of Brookfield Properties. This acquisition reflects a significant decline for the San Francisco-based company, which was previously valued at nearly **$2 billion** and supported by major investors like **Andreessen Horowitz** and **Tiger Global Management**.

Founded in **2017**, Divvy Homes aimed to assist families struggling to enter traditional homeownership through a **rent-to-own model**. Customers would select a home that Divvy purchased, allowing them to rent while saving towards a future down payment. Despite initial success, including raising over **$400 million** in venture capital and achieving over **$100 million** in annual revenue by 2022, the company faced operational challenges as mortgage rates surged in **2022**.

The increase in rates made monthly payments unaffordable for new renters, leading to a surge in customer complaints and ultimately resulting in **three rounds of layoffs**. An insider revealed that nearly all employees have been laid off, stating it’s a **“bloodbath for investors and employee equity.”** The insider further explained that the pricing strategy became untenable, as Divvy could no longer predict future home prices necessary for their model.

![Housing Market](https://media.beehiiv.com/cdn-cgi/image/fit=scale-down,format=auto,onerror=redirect,quality=80/uploads/asset/file/5a359b64-46ec-4e77-a848-1570e63102c3/GhJnvoPWUAArxwi.jpeg?t=1736817358)

Divvy Homes' collapse reflects broader issues in the **proptech sector**, where rising borrowing costs and decreasing venture capital funding have left many startups struggling. According to an analysis by **Fannie Mae**, returning to pre-pandemic housing affordability levels would require drastic changes in income, home prices, or mortgage rates.

As the housing market continues to evolve, the question remains whether Divvy Homes can recover or if this acquisition signals the end of its rent-to-own business model.

An industry insider tells ResiClub that just about “everyone [at Divvy] has been laid off minus a small team who works on dispositions... [it’s] a bloodbath for investors and employee equity."

The Dramatic Downfall of Divvy Homes: What Went Wrong for This Rent-to-Own Startup?

**Alza**, a fintech startup aimed at serving the Latino community, has **abruptly ceased operations**, raising questions about the sustainability of niche fintechs. Founded in **2021** by **Arturo Villanueva**, a former executive at **Stripe**, Alza aimed to provide essential financial services to **Spanish-speaking individuals** in the U.S. The company offered an **FDIC-insured checking account**, debit cards, peer-to-peer payments, and cross-border remittances to over **20 Latin American countries**. 

The announcement came as the Alza website went **offline** on Monday, displaying a message thanking users and directing them to contact support for account inquiries. Villanueva, who moved to the U.S. from Mexico as a child, launched Alza out of a desire to combat the **predatory financial practices** faced by immigrants in the U.S. 

Alza managed to raise **$6.6 million** in funding from notable investors including **Thrive Capital** and **Rappi co-founder Sebastian Mejia**, but no specific reasons were provided for the sudden shutdown. This closure follows a troubling trend within the fintech sector, with other startups like **Bench** and **Level** also recently shutting down or facing significant operational challenges. The fintech landscape appears increasingly volatile, raising concerns about the viability of startups targeting specific demographics.

Alza is the latest fintech to cease operations

The Rise and Fall of Alza: A Latino-Focused Fintech Startup's Unexpected Shutdown

## Boulder Welcomes a New Quantum Startup Incubator

A collaborative initiative involving **Elevate Quantum**, the **University of Colorado**, **Colorado State University**, and the **Colorado School of Mines** is set to launch a cutting-edge startup incubator for **quantum technology companies** in Boulder.

The new facility aims to create a **collaborative office environment** for early-stage quantum ventures, equipped with **state-of-the-art scientific equipment**. This will serve as a **testbed** to transform innovative ideas in quantum technologies into products that can greatly benefit consumers. Potential applications of these quantum technologies include:
- **Sensors** for detecting illness through breath analysis
- **Secure data networks** capable of long-distance communication without hacking risks

The ribbon-cutting ceremony will take place on Wednesday, attended by university officials and local leaders. The incubator will occupy a **13,000-square-foot space** in Boulder’s **Flatiron Park business campus**.

## Investment and Economic Growth
San Diego-based **BioMed Realty LLC** recently acquired a **1 million-square-foot**, 22-building portfolio in Flatiron Park, investing **$625 million** to transform it into a vibrant life-sciences and technology campus.

The U.S. Department of Commerce’s **Tech Hub program** awarded Elevate Quantum a **Phase 2 Tech Hub designation** last year, unlocking **$127 million** in state and federal funding. This funding is expected to spur several billion dollars in **private investment** within the quantum industry in the region.

Currently, Colorado’s **quantum economy** employs about **3,000 workers**, with projections suggesting this number could **more than triple** to approximately **10,000** in the next decade, according to a **2024 report** from the Colorado Office of Economic Development and International Trade.

## The Quantum Revolution
Quantum theory explores the behavior of matter at **atomic and subatomic levels**. By leveraging the unique properties of quantum systems, such as **superposition**, quantum computers can achieve computing power and speed that far exceed traditional computers.

The implications of quantum science extend into various fields, potentially revolutionizing how we:
- Discover new **drug therapies**
- Map the **cosmos**
- Protect sensitive **data**
- Combat **climate change**
- Explore new forms of life in **deep space**

The Boulder Valley has emerged as a **hub for quantum research**, thanks to institutions like the CU physics department, the **National Institute of Standards and Technology**, and **JILA** (formerly the Joint Institute for Laboratory Astrophysics). With decades of investment and research, Boulder is poised to lead the charge in the future of quantum technology.


A group of partners that includes the University of Colorado is opening a startup incubator for quantum technology companies in Boulder.

Unveiling Boulder’s Quantum Startup Incubator: A Game Changer for Technology Innovation

### Meet Surbhi Sarna

Surbhi Sarna, the visionary behind **nVision Medical**, which she sold for **$275 million**, is back in the startup game with her new venture, **Collate**. Leaving her role at **Y Combinator**, Sarna aims to tackle the **tedious paperwork** that life sciences companies face.

![Collate founding team Surbhi Sarna, Nate Smith, and Jigish Patel](https://specials-images.forbesimg.com/imageserve/678540242ee0353851983344/Collate-founding-team-Surbhi-Sarna--Nate-Smith-and-Jigish-Patel-/1960x0.jpg?fit=scale)

### The Challenge in Life Sciences

The life sciences sector is bogged down by extensive documentation required for **research**, **clinical trials**, **product development**, and **manufacturing**. Sarna sees **artificial intelligence** as the solution to streamline these processes, accelerating the development of **potentially life-saving drugs**. 

> “If I talk to customers, they say they would use this immediately.” - Surbhi Sarna 

### Funding and Future Plans

Collate has successfully raised **$30 million** in seed funding led by **Redpoint**, valuing the startup at over **$100 million**. This funding will be pivotal in building their product and hiring a skilled engineering team. 

### A Personal Journey

Surbhi's passion for healthcare stems from her own health struggles as a teenager. After founding nVision in **2009**, she overcame significant challenges to develop an **FDA-cleared device** for early ovarian cancer diagnosis. 

### Building the Team

Sarna has partnered with **Nate Smith**, a former YC visiting partner, to co-found Collate. They both recognize the opportunity to leverage **large language models** to create essential documentation in the life sciences industry.

### The Road Ahead

With a strong vision and significant funding, Collate is poised to disrupt the life sciences industry by transforming how companies handle documentation. Sarna emphasizes the need for a **strong company culture** and is committed to hiring quickly and efficiently.

> “This time, we’re going to be much quicker, and I will be more precise.” - Surbhi Sarna

Y Combinator's Surbhi Sarna has raised $30 million for Collate, a startup aiming to automate the tedious parts of running a life sciences business using AI. 

Surbhi Sarna's Bold Move: $30 Million Raised for AI Startup Revolutionizing Biotech Paperwork

### New York's Unique Flavor in Venture Capital
While **Silicon Valley** might be synonymous with tech innovation, **New York** has carved out its own niche. On a chilly January morning, I visited **Asymmetric Capital Partners** to discuss the future of the **venture capital** industry with leading **VCs** in the city, all while enjoying a delicious bagel from **Apollo**.

### A Changing Landscape
**Ben Sun**, cofounder of **Primary Venture Partners**, shared his journey of launching a social media platform in the 1990s, highlighting the shift in talent perception in New York. Once overlooked, the city is now home to successful startups like **MongoDB** and **Datadog**. This shift has transformed New York into a **beachhead** for venture capital, enabling firms to discover opportunities in overlooked regions such as **Texas**, **Chicago**, and **Miami**.

### The Rise of Unicorns
As **LPs** (Limited Partners) seek exposure to this burgeoning ecosystem, New York has attracted significant investment. **Heather Hartnett**, CEO of **Human Ventures**, pointed out that LPs are diversifying their portfolios by investing in multiple New York funds at various stages, indicating a fully developed ecosystem.

### San Francisco's Resurgence
Despite a resurgence in **San Francisco** driven by AI advancements, even traditional firms are feeling competition from players like **Thrive Capital**. **Joshua Kushner** has positioned Thrive as a global venture firm, emphasizing that geography is becoming less relevant in the quest for lucrative deals.

### The Future is Uncertain
Looking ahead, the venture capital landscape remains unclear. As firms grapple with the aftermath of the pandemic, **Lerer Hippeau** predicts a bifurcation in the industry: larger firms acting as **asset gatherers** and smaller, specialized funds. This dynamic makes early-stage investments increasingly competitive, as highlighted by **Rob Biederman** from Asymmetric, who cautioned against backing just any AI startup without insider knowledge.

### Innovation is Key
While New York's tech scene is thriving, firms must continue to innovate amidst growing competition. Just like **Apollo's** bagels, which are made with **sourdough**, the key to success lies in staying ahead of the curve.

As venture capital grows more competitive, investors are learning to adapt.

The Evolution of Venture Capital: Insights from New York's Top Investors

Funding to **Europe-based startups** saw a **stabilization** in 2024, reaching **$51 billion**, a **5% decrease** from the **$54 billion** invested in 2023, according to **Crunchbase** data.

### Key Insights
- Europe accounted for **16%** of **total global venture capital** in 2024, down from **18%** in the previous two years. It's important to note that some European startups have shifted their headquarters to the U.S., affecting these figures.
- The funding level in 2024 is still less than **half** of the **market peak** of **$117 billion** in 2021, with **late-stage funding** experiencing the most significant decline since the peak.
- Despite this, funding was still above **pre-pandemic levels**, including 2020.

### UK, France, and Germany Lead
The **UK** emerged as the leading country, representing about **one-third** of the funding, totaling around **$17 billion**. **France** and **Germany** followed, raising **$7.9 billion** and **$7.6 billion**, respectively. **Switzerland** was also notable with **$2.8 billion**.

### Sector Highlights
- **Healthcare/Biotechnology** led investments with over **$11 billion**. Notable companies included **Isotopen Technologien München**, **Flo Health**, and **Oura**.
- The **Financial Services** sector followed with **$9.6 billion**, featuring companies like **Abound**, **SeQura**, and **Monzo**.
- **AI** startups raised **$8.8 billion**, accounting for **9%** of global AI funding, with significant rounds from **Wayve**, **Mistral AI**, and **Helsing**.

### Quarterly Performance
The fourth quarter of 2024 saw **$12 billion** in funding, marking a **13% increase** quarter-over-quarter but remaining flat year-over-year. **Late-stage funding** reached **$5.2 billion**, while **early-stage** and **seed funding** recorded **$5.1 billion** and **$1.6 billion**, respectively.

### Summary of Trends
- Overall, **Europe's startup funding** remained stable year-over-year, contrasting with **North America**, which saw a spike due to AI sector funding and numerous billion-dollar rounds.
- Seed and early-stage funding remained robust, with totals exceeding **60%** of the market peak, while late-stage funding was around **31%**.

![Europe's Startup Funding](https://news.crunchbase.com/wp-content/uploads/Quarterly-Cowboy-Europe.jpg)

Funding to Europe-based startups settled year over year in 2024. Funding reached $51 billion, down by 5% year over year from $54 billion invested in 2023, Crunchbase data shows. 

How Phoenix Startups are Shaping the Future of Tech at CES

Summary:

Phoenix's Rise as a Tech Hub

Innovations on Display

Local Support and Future Needs

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Other Latest News

Oregon's Venture Capital Plummets: What It Means for Startups in 2024

The Dramatic Downfall of Divvy Homes: What Went Wrong for This Rent-to-Own Startup?

The Rise and Fall of Alza: A Latino-Focused Fintech Startup's Unexpected Shutdown

Unveiling Boulder’s Quantum Startup Incubator: A Game Changer for Technology Innovation

Surbhi Sarna's Bold Move: $30 Million Raised for AI Startup Revolutionizing Biotech Paperwork

The Evolution of Venture Capital: Insights from New York's Top Investors

Europe's Startup Funding in 2024: A Stabilizing Trend Amidst Market Challenges

Other Latest News

Oregon's Venture Capital Plummets: What It Means for Startups in 2024

The Dramatic Downfall of Divvy Homes: What Went Wrong for This Rent-to-Own Startup?

The Rise and Fall of Alza: A Latino-Focused Fintech Startup's Unexpected Shutdown

Unveiling Boulder’s Quantum Startup Incubator: A Game Changer for Technology Innovation

Surbhi Sarna's Bold Move: $30 Million Raised for AI Startup Revolutionizing Biotech Paperwork

The Evolution of Venture Capital: Insights from New York's Top Investors

Europe's Startup Funding in 2024: A Stabilizing Trend Amidst Market Challenges