### Overview of AI Evaluation Startups

Startups like **Patronus** and **Braintrust** are at the forefront of evaluating artificial intelligence to ensure it produces accurate and safe results. These companies have garnered significant **investor attention**, yet they face **challenges in revenue generation**.

### The Revenue Dilemma

Despite the increasing demand for AI evaluation tools, the **sales data** from these startups reveals a concerning trend: revenue growth is lagging. Investors are intrigued by the potential of these technologies, but they are not translating interest into financial success.

### The Market Landscape

The landscape for AI evaluation startups is competitive. As more companies enter the market, distinguishing themselves becomes crucial. **Patronus** and **Braintrust** need to demonstrate not just the **value of their products**, but also how they can effectively monetize their offerings.

### Conclusion

While the potential for growth exists, the current **financial performance** of AI evaluation startups raises important questions about their sustainability and the future of investment in this sector.

Startups whose products evaluate artificial intelligence to make sure it isn’t making things up or delivering unsafe results, like Patronus and Braintrust, have caught the attention of investors. But previously undisclosed sales data from these and other startups selling evaluation software show ...

Why AI Evaluation Startups Are Struggling to Generate Revenue Despite Investor Interest

### Techstars Announces Increased Funding for Startups

Techstars, a nearly **20-year-old startup accelerator**, has unveiled new investment terms for startups participating in its **three-month program**. Starting with the **fall 2025 batch**, Techstars will now invest **$220,000**, which is **$100,000 more** than previous offers.

### Investment Breakdown

The funding will be split into two parts:
- **$20,000** in exchange for **5% equity** in the startup.
- **$200,000** provided as an **uncapped SAFE note** with a **“most favored nation” clause**. This means Techstars’ ownership percentage from the SAFE will be influenced by the startup's future valuations. For instance, if a startup's next financing values it at **$10 million**, Techstars will hold **2% equity** from the SAFE, totaling **7% ownership**.

### Comparison with Y Combinator

These new terms closely mirror those of **Y Combinator (YC)**, which increased its funding three years ago to include a **$375,000 SAFE note** alongside its standard **$125,000** for **7% equity**. 

So, which accelerator offers a better deal? It largely depends on the startup's **capital requirements**. YC provides over **double the funding** but requires a greater equity stake compared to Techstars.

---

**Marina Temkin** is a venture capital and startups reporter at TechCrunch, previously writing for PitchBook and Venture Capital Journal. She has a background in finance and holds a **CFA charterholder designation**.

Techstars, a nearly 20-year-old startup accelerator, announced new terms for startups that enter its three-month program. The organization will now invest

Techstars Boosts Startup Investment to $220,000: How Does It Compare to Y Combinator?

Welcome to **Startups Weekly** — your go-to recap of the latest happenings in the startup world! Want this directly in your inbox every Friday? [Sign up here](https://techcrunch.com/newsletters/).

This week delivered a mix of signals from the startup ecosystem. While we saw a **fresh IPO filing**, the overall outlook for exits remains **bleak**. Founders are expressing **frustration** over capital availability, even as some venture capitalists (VCs) manage to **create liquidity** and raise funds for more optimistic times.

## Most Interesting Startup Stories from the Week

![Dylan Field, co-founder and CEO of Figma Inc.](https://techcrunch.com/wp-content/uploads/2023/05/GettyImages-1233645802.jpg?w=680)

**Fearless or not**: Design software company **Figma** has filed its confidential paperwork for an **IPO**, defying the fears that halted IPO plans for both **Klarna** and **StubHub** this month due to a stock market crash.

**Frustrated**: Founders in the **U.K.** are increasingly frustrated by the widening funding gap compared to their **Silicon Valley** counterparts. Last year, British startups raised only **£16.2 billion** (approx. **$21.5 billion**), while U.S. startups secured about **$73.8 billion**.

**Smashed**: The AI-powered reading curation app **Smashing**, launched by **Goodreads'** founder, has shut down due to disappointing growth metrics.

**Suspended**: **BluSmart**, an Indian electric vehicle ride-hailing service, has seemingly suspended operations following an investigation into its co-founders.

**Back**: After a month away, **Ryan Breslow** resumed his role as **Bolt’s** CEO and unveiled a new **“super app”** aimed at redefining the fintech landscape.

**Investigating**: **Rippling** is facing challenges in its lawsuit against **Deel's** CEO, who is now in the UAE, complicating their efforts.

**Tailwinds**: **OpenAI** is reportedly in talks to acquire **Windsurf** for **$3 billion**, indicating continued interest in AI advancements.

## Most Interesting VC and Funding News This Week

![Marshmallow billboard](https://techcrunch.com/wp-content/uploads/2025/04/Marshmallow_HK_48_Sheet.png?w=680)

This week saw promising funding news, suggesting a potential shift towards better days with increased valuations and larger funds.

**Growing**: **Marshmallow**, a British insurance startup, raised **$90 million** at a valuation exceeding **$2 billion**, focusing on underserved customers and boasting a profitable annual revenue run rate of **$500 million**.

**Hammered win**: **Hammerspace**, which aids companies like **Meta** in managing unstructured data, raised **$100 million** at a valuation over **$500 million**.

**New chapter**: **Chapter**, a Medicare advisory startup, secured **$75 million** at a **$1.5 billion** valuation.

**Phantom limbs**: **Phantom Neuro** raised **$19 million** to develop a device helping amputees control prosthetic limbs.

**Resilient**: **Conifer**, a startup focusing on electric hub motors, secured a **$20 million** seed round.

**Sunny days**: **Arnergy**, a clean tech startup, raised an additional **$15 million** to expand solar access in Nigeria.

**Bullish**: **Peter Thiel’s Founders Fund** closed their third growth fund at **$4.6 billion**, indicating a potential shift from bearish to bullish market sentiments.

## Last but Not Least

![Hans Swildens of Industry Ventures](https://techcrunch.com/wp-content/uploads/2022/04/Hans-wide.jpg?w=680)

With IPOs scarce, VCs are finding ways to maintain liquidity. In the latest episode of **StrictlyVC Download**, Industry Ventures CEO **Hans Swildens** discussed how firms are navigating these challenges.

Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups. Want it in your inbox every Friday? Sign up here.

Startup Landscape: Contradictory Trends in Venture Capital This Week

### The Need for Geoengineering
Humans have struggled to move away from fossil fuels, prompting discussions about **geoengineering** — a method to modify the atmosphere to prevent catastrophic global warming. This practice is **controversial**, with some believing it's the only viable solution after years of inaction on carbon emissions, while others argue against conducting uncontrolled experiments on the Earth's climate.

### Make Sunsets: The Startup at the Center of Controversy
One such startup, **Make Sunsets**, founded by two individuals from Silicon Valley, has been releasing **weather balloons** filled with hydrogen and sulfur dioxide particles. These balloons burst at high altitudes (over **66,000 feet**), dispersing sulfur dioxide to reflect sunlight and cool the Earth slightly. The company markets **“cooling credits”** based on the estimated warming negated by each release.

### Funding and Scientific Backing
Make Sunsets has raised **$750,000** from investors, including **Boost VC** and **Draper Associates**. Although neither founder is a scientist, the underlying science of **sulfur dioxide** and its role in solar reflectivity is well-supported. The importance of sulfur dioxide in regulating Earth's reflectivity was highlighted when its content in marine shipping fuels was reduced in **2020**, leading to unintended climate effects.

### Potential Risks and EPA's Response
However, the implications of this geoengineering approach remain uncertain. While it could potentially induce rain in some areas, it might also deprive others of rainfall. Concerns over health risks, such as **asthma** exacerbations from ground-level sulfur dioxide, have led the **EPA** to investigate Make Sunsets. The agency's administrator, **Lee Zeldin**, has expressed that sulfur dioxide is regulated as an air pollutant.

Make Sunsets defends its operations, asserting that they comply with the **Weather Modification Act of 1976**, arguing their method is legal. Yet, the interpretation of this law regarding climate modification remains ambiguous.

### Inconsistencies in Pollution Regulation
Interestingly, while the EPA's investigation may be warranted, it raises questions about consistency. The agency's support for **coal**-based energy generation may contribute significantly more sulfur dioxide pollution than the startup's balloon releases. For instance, a single balloon release on **November 15, 2024**, emitted **1,715 grams** of sulfur dioxide, whereas U.S. power plants released **650,000 tons** in 2023, primarily from coal sources. This discrepancy highlights the ongoing debate over pollution regulation and geoengineering practices.

The company sells “cooling credits” for its sulfur dioxide-based geoengineering projects.

Is Geoengineering the Future? The Controversial Moves of Make Sunsets Under EPA Scrutiny

### The Inspiring Journey of Quiet Town

For **Lisa Schulner-Fine** and **Michael Fine**, the path to entrepreneurship began in the quiet hours of night as they struggled to soothe their newborn son. In the darkness, Lisa's mind wandered to an unexpected topic: **shower curtains**. Frustrated by the lack of **stylish and sustainable** options on the market, she envisioned a brand that could transform the bathroom accessory industry.

![Lisa and Michael Fine](https://assets.entrepreneur.com/images/misc/1744746001_lisaandmichaelsittingandleaning.jpg?width=1000)
*Image Credit: Courtesy of Quiet Town*

### The Birth of a Side Hustle

Lisa, who had experience as a director of styling at Madewell, and Michael, a freelance fashion photographer, found themselves disillusioned by the poorly made plastic items dominating retail shelves. **"We'd be at Bed Bath & Beyond with a big shopping cart, picking out terribly made plastic stuff that didn't feel like us at all,"** Lisa recalls.

Seeing an opportunity in what she called the **"biggest underdog category"**, Lisa began brainstorming shower curtain designs while balancing her full-time job and family life. Despite Michael's initial skepticism about the viability of a shower curtain business, he recognized Lisa's creativity and decided to support her vision.

### Crafting Beautiful Products

Lisa's innovative approach led to the creation of shower curtains made from **canvas material**. The couple focused on creating products that improve with age, similar to a well-loved pair of jeans. Capturing the essence of their brand, they conducted their first photoshoot at the beach, showcasing the curtains in a unique and artistic way.

![Quiet Town Shower Curtains](https://assets.entrepreneur.com/images/misc/1744746156_02_13_24_cutouts0136.jpg?width=1000)
*Image Credit: Courtesy of Quiet Town*

### Expanding the Brand

Quiet Town quickly evolved beyond just shower curtains into a **lifestyle brand** focused on functional yet aesthetically pleasing products. Early products were named after tranquil towns, and the brand's ethos was to create beautiful items that people genuinely needed. Lisa also initiated a project called **Re:Canvas**, which transformed production scraps into new products, reinforcing their commitment to sustainability.

### Navigating Challenges

Despite their commitment to sustainability, the couple faced challenges in producing shower curtain liners without adding more plastic to the environment. After much deliberation, they developed the **"sun shower curtain"**, made from **non-toxic EVA vinyl** that is free from harmful chemicals. They also initiated a recycling plan for their products, a complex task for a small business.

### Growth Amidst a Pandemic

The pandemic significantly increased demand for home products, leading Quiet Town to transition from a side hustle to a full-time business in 2020. With revenue skyrocketing to over **$3 million a year**, the couple decided to relocate to the West Coast, where they felt more at home and closer to their roots.

### Lessons from the Journey

After nearly a decade in business, Michael emphasizes the importance of having a **partner** with complementary skills and maintaining a **work-life balance**. Lisa highlights the necessity of being **passionate** about your business, stating, **"No matter how small or big you grow [the business] to, you have to believe in it so passionately."**

Their story is a testament to how a simple idea can flourish into a thriving business when driven by creativity and a commitment to sustainability.

Michael Fine and Lisa Schulner-Fine started a sustainable side hustle focused on the bathroom category in 2016. Read more about their business success, here.

From Sleepless Nights to $3M: How a Couple Turned Shower Curtains into a Sustainable Business

### Startup Radar: Early Stage Companies Utilizing AI for Innovative Solutions  
From **AI** to **crypto**, **voice agents**, and **healthcare** apps, the latest startup radar highlights a fascinating array of early-stage tech companies. These startups are primarily based in the **Seattle area** or have founders connected to the region. Dive deeper into their unique offerings below.  

![Startup Founders](https://cdn.geekwire.com/wp-content/uploads/2025/04/Screenshot-2025-04-17-at-10.21.42%E2%80%AFPM-630x628.png)  
*From top left, clockwise: Trellis Health CEO Estelle Giraud, SelfFull CEO Anya Smith; Eve Wealth CEO Sadie Raney; Tursio CEO Alekh Jindal; and Omnivista CEO Anand Tyagi.*  

### **Eve Wealth**  
**Founded:** 2021, re-launch in 2025  
**The business:** Eve is an **investing platform** focused on **digital asset investment portfolios** and an **education community** to help investors navigate the **crypto markets**. The startup has successfully raised **$1.75 million**.  
**Leadership:** CEO **Sadie Raney**, with a background in co-founding Seattle crypto startups, leads the charge alongside former Strix executives.  
**Quotable:** “We have rebuilt the platform and community for a full launch next month,” Raney shared.  

### **Omnivista**  
**Founded:** 2025  
**The business:** Omnivista enables companies to seamlessly integrate **voice agents** into their websites, enhancing customer interaction and providing insights into customer interests.  
**Leadership:** Founder **Anand Tyagi** is a former software engineer with a vision to optimize customer interactions.  
**Quotable:** “Our goal is to help companies increase the amount of information they can extract per interaction,” Tyagi stated.  

### **SelfFull**  
**Founded:** 2024  
**The business:** SelfFull leverages **AI** to assist coaching groups in scaling their impact, offering personalized support and tracking client progress.  
**Leadership:** Founder **Anya Smith** has a rich history in analytics and research at Meta, and incubated SelfFull at Harvard Innovation Labs.  
**Quotable:** “We’re framing our vision around this idea: To leapfrog coaching practices into AI — authentically, simply, securely,” Smith expressed.  

### **Trellis Health**  
**Founded:** 2022  
**The business:** Trellis provides a platform for managing health, particularly in **pregnancy and postpartum**, integrating medical data and personalizing guidance. The startup recently announced a **$1.8 million seed round**.  
**Leadership:** CEO **Estelle Giraud** has a background in biotech and aims to redefine health experiences.  
**Quotable:** “We’re aiming at a health experience that feels not just ‘better’ but … decadent,” Giraud remarked.  

### **Tursio**  
**Founded:** 2023  
**The business:** Tursio helps employees utilize AI to analyze structured data efficiently, focusing on regulated industries.  
**Leadership:** CEO **Alekh Jindal**, a former Microsoft executive, co-founded Tursio to harness transformative AI technologies.  
**Quotable:** “What seemed like a terrible timing two years back to start an AI company, turned out to be the perfect moment for us,” Jindal noted.

From top left, clockwise: Trellis Health CEO Estelle Giraud, SelfFull CEO Anya Smith; Eve Wealth CEO Sadie Raney; Tursio CEO Alekh Jindal; and Omnivista

Discover How These Innovative Startups are Leveraging AI for Transformative Solutions

### The AI Paradox in Venture Capital

If AI is meant to **boost productivity**, why are startups securing larger funding rounds? This intriguing question arises as **early-stage venture deals** continue to grow, even when removing the influence of AI giants.

### By the Numbers
According to **PitchBook** data, median early-stage round sizes are increasing across various sectors, well above inflation rates:
- **Pharma/Biotech**: +29%
- **Media**: +41%
- **IT Hardware**: +71%
- **Health-Care Systems**: +30.5%
- **Energy**: +79%

For PitchBook, the term **"early-stage"** refers to companies under five years old, typically categorized as Series A or B.

### The Best Explanation
The **disconnect** may stem from the fact that AI hype has not yet translated into many actionable use cases. The primary applications so far—**coding assistance** and **customer service automation**—can reduce startup costs but aren't necessarily transformative.

This scenario contrasts sharply with the advent of **cloud computing**, which significantly lowered startup costs for equipment and real estate, contributing to the NYC tech boom.

### Real-World Cost Increases
While costs are rising in areas like **Bay Area housing**, the growth rate of VC round sizes is significantly outpacing these increases.

### A Cynical Perspective
Sometimes, the size of funding rounds does not reflect a startup's actual capital needs. **Venture capitalists** often have their own calculations based on fund dynamics and ownership stakes. They may opt to invest larger amounts to create competitive advantages, particularly in winner-take-all markets.

Founders might find themselves accepting more funding than desired due to lack of better options or fears of future fundraising challenges. This can align both parties in a cycle of **gluttony**, as larger checks often lead to higher valuations.

### The Academic Explanation
The **Jevons Paradox**, articulated by a British economist over 160 years ago, suggests that increased efficiency can lead to increased consumption. This theory, traditionally discussed in the contexts of energy and agriculture, may soon apply to AI as well.

### The Bottom Line
Venture capital frequently discusses the **AI revolution**, yet it appears to be investing more money than the actual results warrant.

If AI is supposed to supercharge productivity, why are startups raising more money?

Why Are Startups Raising More Money Despite AI's Promise of Efficiency?

### Archer Aviation's Bold Vision

Archer Aviation, an innovative **California-based electric airplane startup**, has unveiled an ambitious plan for an **air taxi service** in **New York City**. This service aims to connect various locations in Manhattan to three major airports: **JFK, LaGuardia, and Newark**.

### Quick and Efficient Transportation

Imagine cutting your travel time to the airport from over an hour to **less than 15 minutes**! With Archer's **Midnight electric plane**, passengers will enjoy a **5 to 15-minute ride** from select spots in Manhattan to designated **vertiports** at the airports. This service will be available as an **add-on** when booking regular flight tickets.

### The Midnight Electric Plane

The **Midnight** is a **four-passenger electric VTOL (Vertical Take-Off and Landing)** aircraft, powered by **six batteries** and equipped with **12 rotors**. It can travel between **20 and 50 miles** on a single charge, making it an ideal option for quick airport transfers.

![Archer Aviation's proposed air taxi routes in NYC](https://cdn.motor1.com/images/mgl/XBqJbE/s5/archer-aviation-s-proposed-air-taxi-routes-in-nyc.jpg)
*Photo by: Archer Aviation*

### Starting Points and Partnerships

Archer plans to utilize existing facilities like the **East 34th Street Heliport**, **Downtown Skyport**, and **West 30th Street Heliport** as departure points for travelers. The startup has garnered support from **United Airlines**, the **New York Port Authority**, and the **New York City Economic Development Corporation (NYCEDC)**. Additionally, they have received airworthiness criteria approval from the **Federal Aviation Administration (FAA)**, making them one of only two air taxi companies in the U.S. to achieve this milestone, alongside **Joby Aviation**.

### Challenges Ahead

Despite these advancements, Archer still lacks the **FAA Type Certification** required for operations. Critical details such as the **number of daily flights**, **operating hours**, and **pricing** have yet to be disclosed. Previously, Archer had similar air taxi proposals for cities like **San Francisco**, **Los Angeles**, and **Chicago**. The future of air travel is looking up, but there are still many hurdles to overcome before this vision becomes a reality.

The company says it would take less than 15 minutes to get passengers from various locations in Manhattan to the neighbouring airports.

Why AI Evaluation Startups Are Struggling to Generate Revenue Despite Investor Interest

Summary:

Overview of AI Evaluation Startups

The Revenue Dilemma

The Market Landscape

Conclusion

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Other Latest News

Techstars Boosts Startup Investment to $220,000: How Does It Compare to Y Combinator?

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Is Geoengineering the Future? The Controversial Moves of Make Sunsets Under EPA Scrutiny

From Sleepless Nights to $3M: How a Couple Turned Shower Curtains into a Sustainable Business

Discover How These Innovative Startups are Leveraging AI for Transformative Solutions

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Other Latest News

Techstars Boosts Startup Investment to $220,000: How Does It Compare to Y Combinator?

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Is Geoengineering the Future? The Controversial Moves of Make Sunsets Under EPA Scrutiny

From Sleepless Nights to $3M: How a Couple Turned Shower Curtains into a Sustainable Business

Discover How These Innovative Startups are Leveraging AI for Transformative Solutions

Why Are Startups Raising More Money Despite AI's Promise of Efficiency?

Revolutionizing Travel: Archer Aviation's Air Taxi Service Promises 15-Minute Rides to NYC Airports