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VCs abandon old rules for a ‘funky time’ of investing in AI startups

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If there’s one thing that VCs agree on when backing AI startups, it’s that AI requires a different investment approach than prior technological shifts.

“It’s a funky time,” said Aileen Lee, founder and managing partner of Cowboy Ventures, on stage at TechCrunch Disrupt 2025. The longtime VC noted that the rules of investing have significantly shifted now that some AI companies are leaping from “zero to $100 million in revenue in a single year.”

However, Lee also noted that, based on her firm’s research, Series A investors aren’t just seeking rapid revenue growth. “It’s an algorithm with different variables and different coefficients.”

Some of the factors investors now measure, according to Lee, include whether the startup is generating data, the strength of its competitive moat, the founders’ past accomplishments, and the technical depth of the product. “Depending on what your company is, the output of the algorithmic formula is going to be different,” she said.

Jon McNeill, co-founder and CEO of startup creation firm DVx Ventures, stated that even startups that grow rapidly from inception to $5 million in revenue often struggle to secure follow-on funding. “I think this game has changed, and it is changing dynamically,” he said.

McNeill noted that Series A investors are now applying the same rigorous standards to seed-stage startups that they previously reserved for more mature companies.

“I think a lot of investors have figured out that the breakout companies, in most cases, don’t have the best tech,” McNeill said, about why Series A VCs are looking so closely at startups’ ability to attract and retain customers. “They have the best go-to market.”

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Steve Jang, founder and managing partner of Kindred Ventures, disagreed that a strong go-to-market (GTM), an industry term for sales and marketing, holds greater weight for investors. “I don’t think it’s 100% true to say mediocre technology, great GTM wins and raises money and gets customers. I think that it’s a necessary requirement to have both.”

While McNeill later clarified that having a solid product is important, he indicated that his initial comment was related to the founders’ need to develop an exceptionally strong sales and marketing strategy right out of the gate. “Investors are getting much more sophisticated on the go-to market, than they have in the past,” he said.

(The debate over marketing versus tech was brought to the forefront later during the conference when Roy Lee, founder of the viral startup Cluely, said on stage that launching a product that barely worked, even with massive social media fame, may not always be the best idea.)

Lee added that AI startups are now also under pressure to deliver product updates and new features at an unprecedented pace, preempting existing companies that might try to introduce similar products.  “If you look at how much OpenAI and Anthropic are shipping, you’re going to have to figure out how to match how much you ship, how quickly and the quality of it,” she said.

Despite the expectations for breakneck growth and fast product development, panelists agreed that the AI industry is still in its very early stages. As Jang put it, “There are no clear, outright winners, even in LLMs. There are competitors nipping at their heels.”

This means startups still have a path to unseating perceived leaders, whether they are decades-old companies or fast-moving newcomers.

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Waymo starts autonomous testing in Philadelphia

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Waymo is adding another four cities to its growing list of robotaxi rollouts. The company announced Wednesday it has begun testing its autonomous vehicles (with a safety monitor) in Philadelphia, and that it will start manual driving to collect data in Baltimore, St. Louis, and Pittsburgh.

Waymo did not offer a timeline for when it plans to launch commercial services in those locations, nor do we know whether the Alphabet-owned company will partner with other companies to operate robotaxis in each one. That has been the move in cities like Atlanta and Austin, for example, where Waymo has partnered with Uber to advance its robotaxi rollout.

But the new locations join a list of over 20 cities where the company is either offering rides, prepping a commercial launch, or testing. Waymo is also now offering rides on freeways in Los Angeles, Phoenix, and the San Francisco Bay Area. The company plans to be doing one million rides per week by the end of 2026.

Waymo has done all this while claiming to be operating at a level five times safer than humans, according to data the company recently released.

But the expansion has not come without its issues. The National Highway Traffic Safety Administration is investigating how the company’s vehicles operate near school buses, after a Waymo was filmed driving around a stopped bus in Atlanta in September.

This week, Austin news outlet KXAN published a report showing Waymo’s vehicles have driven past school buses that were in the process of unloading or loading children multiple times — including after Waymo claims to have shipped software updates to address the problem.

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Spotify Wrapped 2025 adds its first multiplayer feature with ‘Wrapped Party’

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Spotify Wrapped is back. After last year’s widely criticized flop that included an AI podcast as its highlight, the streamer’s highly anticipated annual review feature has returned to its roots. This year, Spotify is doubling down on what it knows works best: deep dives into your streaming data, creative experiences, messages from favorite artists, and other social features.

The company claims that Wrapped 2025 is its biggest, as it’s introducing nearly a dozen new features in addition to its old standbys, like top songs and artists. Plus, it’s offering more visibility into users’ data than in years past. For the first time, Spotify Wrapped is adding a live multiplayer feature to compare your listening data with friends.

Wrapped Party, Wrapped’s first live interactive experience, allows you to invite up to nine friends to compare listening stats.

Image Credits:Spotify

Also new this year, your Top Songs Playlist will include the play counts for each of the top songs, so you can actually see how much time you spent with your favorite tracks.

Other standout features this year include an interactive Top Song Quiz, a Listening Age feature, and Wrapped Clubs, which match you to one of six unique listening styles.

The company believes these additions will not only bring back the personalized, engaging experience that users have long expected from Wrapped, but will take it a step further by making it more interactive than before.

In the Top Song Quiz, for instance, you can try to guess which top song soundtracked your year before seeing the results.

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Image Credits:Spotify

The new interactive Wrapped Party feature isn’t just about comparing the personal streaming data you’ve already received to your friends’ data, as that’s something people already do on social media. Instead, the feature presents unique data stories for your group, like who’s the “most obsessed fan,” the “early bird,” the most “picky listener,” or even something as nice as the “dinner table explainer,” meaning the person who listens to the most news podcasts.

Image Credits:Spotify

Spotify says these awards update dynamically every time you join a Wrapped Party, so no two sessions are ever the same — even if you run through them again with the same group of friends.

The new Wrapped Clubs, meanwhile, will group you into one of half a dozen listening styles, like the “Soft Hearts Club,” the “Club Serotonin,” the “Full Charge Crew,” the “Cosmic Stereo Club,” and others. You’ll also receive a role in the club based on your listening data. You might be a club leader if your listening choices strongly matches the club’s values, a scout if you’re always seeking out new releases, or an archivist if you listen to music from past eras.

Image Credits:Spotify

Another feature, Listening Age, compares your 2025 music listening to others in your age group. To calculate your age, the feature considers the release years of the tracks you listen to most. From there, it identifies the five-year span of music that you engaged with more than other listeners your age.

Image Credits:Spotify

As in prior years, you’ll see your top songs, top artists, top genres, and, for the first time, top albums. If you engaged with audiobooks and podcasts, you’ll see metrics for those as well. Artists, writers, and podcasters will have their own version of Wrapped as before. And top fans will again receive video messages from their favorite artists, podcasters, and, now, authors.

You’ll also receive a playlist of your top songs of the year, as before.

Image Credits:Spotify

What you won’t find in this year’s Wrapped is any feature that advertises it was made with AI.

In a press briefing on Tuesday, Spotify’s Senior Director of Global Marketing, Matt Luhks, admitted the company received a “lot of feedback” about its 2024 AI-focused Wrapped experience, saying it was a “mix of positive and ‘more constructive feedback,’” despite the feature driving more engagement than prior years.

“We take all of that in. We use that as information, insights, [and] inspiration for how we approached Wrapped this year,” he said in a press event ahead of today’s launch.

“What our users tell us about Wrapped means a lot to us, so it was really informative in how we approached Wrapped this year. And what we tried to build was the most creative, most innovative, most engaging Wrapped ever,” he added, setting a high bar for the 2025 edition of the now 11-year-old annual year-in-review feature.

“We’re the original and, we believe, still the best,” Luhks said.

Image Credits:Spotify

Still, AI was a part of the Wrapped experience. Though the company claims the overall experience was not made with AI, it does leverage a LLM (large language model) to add a storytelling layer to Wrapped’s facts and figures, and natural language summaries in other parts of its experience, looking back on your data.

Spotify’s attempt to fix Wrapped after a notable stumble comes as the streamer faces increased competition from Apple, Amazon, YouTube, and others, which have all launched their own annual review features, inspired by Wrapped.

“Everyone seems to have their own version of Wrapped. Now, there’s a lot of reviews and replays and rewinds out there, but we believe that Wrapped still sets the bar for these year-end recaps,” Luhks said.

Along with the consumer experience, Spotify shared its top artists, songs, albums, podcasts, and audiobooks for the year, with top winners that included, respectively, Bad Bunny (top song and album), Joe Rogan (“The Joe Rogan Experience” podcast), and Rebeca Yarros (author of “Fourth Wing”).

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Nothing looks to its community to raise $5M, wants to be ‘IPO-ready’ in 3 years

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Hardware maker Nothing is letting its user base buy its stock as part of a new community investment round of $5 million. The new round, which opens on December 10, will enable consumers to buy the company’s shares at its Series C valuation of $1.3 billion.

The company said it has so far raised $8 million in total from over 8,000 people across two previous community investment rounds. It held its first community funding event in 2021, aiming to raise $1.5 million.

“This isn’t about raising capital, it’s about giving our community/fans a chance to invest while we’re private and join us on the journey,” a spokesperson for Nothing told TechCrunch.

Community investors have a rotating seat on the company’s board, but it is unclear what else they get for investing in the company through such rounds.

Nothing raised $200 million in its Series C back in September from investors including Tiger Global, GV, Highland Europe, EQT, Latitude, I2BF and Tapestry. The company has raised $450 million to date.

The community round comes as Nothing makes changes to its corporate structure as it tries to increase its share of a smartphone market dominated by giants like Samsung and Apple. The company is spinning off its budget CMF brand, and plans to explore AI-centric devices while it keeps building smartphones and audio products. And Nothing claims it crossed $1 billion in cumulative revenue this year, up 150% from 2024.

The startup is working to be “IPO-ready” in three years, CEO Carl Pei told TechCrunch in an email. “The timing will depend on market conditions and what makes sense for the business at that point in time,” he said.

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“What’s important is that we’re already operating with that discipline now. We’re building the systems, the governance, the financial discipline that a public company needs. It forces us to think longer-term and make smarter decisions that prioritise sustainable growth,” Pei added.

It’s not clear if Nothing aims to raise another round before an IPO. When asked about its fundraising plans, a Nothing spokesperson said the company is not thinking about raising capital immediately, but it wouldn’t be averse to those conversations.

Those interested in investing in the community round can use platforms like Wefunder and Crowdcube to participate.

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