India has cleared a $1.1 billion state-backed venture capital program that will channel government money into startups through private investors, doubling down on its effort to finance high-risk areas such as artificial intelligence, advanced manufacturing and other sectors broadly referred to by the industry as deep tech.
First outlined in the January 2025 budget speech by India’s finance minister, the ₹100 billion fund won cabinet approval this week (more than a year after the speech), allowing the government to move ahead with deployment. A previous iteration of the program, launched in 2016, committed ₹100 billion to 145 private funds that have invested more than ₹255 billion (about $2.8 billion) in over 1,370 startups, according to official data released on Saturday.
The program is structured as a fund of funds, a common venture capital model in which governments back startups indirectly by committing capital to private investment firms. It is designed to take a more targeted approach than its 2016 counterpart, focusing on deep-tech and manufacturing startups that typically require longer time horizons and larger amounts of capital, while also backing early-stage founders, expanding investment beyond major cities and strengthening India’s domestic venture capital industry, particularly smaller funds, per the Indian government.
At the announcement on Saturday, IT minister Ashwini Vaishnaw highlighted the scale of India’s startup expansion, pointing to figures shown on a presentation slide indicating the number of startups has grown from fewer than 500 in 2016 to more than 200,000 today. The slide said more than 49,000 startups were registered in 2025 alone, the highest annual total on record.
The cabinet approval follows recent changes to India’s startup rules aimed at easing pressure on deep-tech companies. New Delhi doubled the period for which such firms are classified as startups to 20 years and raised the revenue threshold for startup-specific tax, grant and regulatory benefits to ₹3 billion, or about $33 million, up from ₹1 billion previously.
The approval comes just ahead of the government-backed India AI Impact Summit, where global AI companies including OpenAI, Anthropic, Google, Meta, Microsoft, and Nvidia are set to participate alongside Indian corporates such as Reliance Industries and Tata Group. India, the world’s most populous country and one of its largest internet markets with more than a billion online users, has become an increasingly attractive arena for global tech companies looking to expand their user base.
At the same time, private capital has become harder to secure. India’s startup ecosystem raised $10.5 billion in 2025, down just over 17% from a year earlier, even as investors grew more selective and sharply reduced the number of deals. The number of funding rounds fell nearly 39% to 1,518 transactions, according to data from Tracxn.
Vaishnaw said the new venture capital program would remain flexible, adding that “extensive consultations have taken place with all stakeholders.”
With an eye towards luring more AI investment to the country, India is hosting a four-day AI Impact Summit this week that will be attended by executives from major AI labs and Big Tech, including OpenAI, Anthropic, Nvidia, Microsoft, Google, and Cloudflare, as well as heads of state.
The event, which expects 250,000 visitors, will see Alphabet CEO Sundar Pichai, OpenAI CEO Sam Altman, Anthropic CEO Dario Amodei, Reliance Chairman Mukesh Ambani, and Google DeepMind CEO Demis Hassabis in attendance.
India’s prime minister, Narendra Modi, is scheduled to deliver a speech with French President Emmanuel Macron on Thursday.
Here are all the key updates from the event:
- India earmarks $1.1 billion for its state-backed venture capital fund. The fund will invest in artificial intelligence and advanced manufacturing startups across the country.
- OpenAI CEO Sam Altman said India accounts for more than 100 million weekly active ChatGPT users, second only to the U.S. He also said Indians also account for the most students using ChatGPT.
- Blackstone has picked up a majority stake in Indian AI startup Neysa as part of a $600 million equity fundraise. Teachers’ Venture Growth, TVS Capital, 360 ONE Asset, and Nexus Venture Partners also invested. The company now plans to raise another $600 million in debt, and deploy more than 20,000 GPUs.
- Bengaluru-based C2i, which is building a power solution for data centers, raised $15 million in a Series A round from Peak XV, with participation from Yali Deeptech and TDK Ventures.
- HCL CEO Vineet Nayyar said Indian IT companies will focus on turning profits and not being job creators. These comments come as Indian IT stocks dip as fears of AI disrupting the IT services sector burgeon.
- Vinod Khosla, founder of Khosla Ventures, said that industries like IT services and BPOs (Business Process Outsourcing) can “almost completely disappear” within five years because of AI. He told Hindustan Times that 250 million young people in India should be selling AI-based products and services to the rest of the world.
- AMD is teaming up with Tata Consultancy Services (TCS) to develop rack-scale AI infrastructure based on AMD’s “Helios” platform.
- Anthropic said that it is opening its first office in India in the city of Bengaluru. The company said that the country is the second biggest user of Claude afte the U.S.
Power, rather than compute, is fast becoming the limiting factor in scaling AI data centers. That shift has prompted Peak XV Partners to back C2i Semiconductors, an Indian startup building plug-and-play, system-level power solutions designed to cut energy losses and improve the economics of large-scale AI infrastructure.
C2i (which stands for control conversion and intelligence) has raised $15 million in a Series A round led by Peak XV Partners, with participation from Yali Deeptech and TDK Ventures, bringing the two-year-old startup’s total funding to $19 million.
The investment comes as data-center energy demand accelerates worldwide. Electricity consumption from data centers is projected to nearly triple by 2035, per a December 2025 report from BloombergNEF, while Goldman Sachs Research estimates data-center power demand could surge 175% by 2030 from 2023 levels — the equivalent of adding another top-10 power-consuming country.
Much of that strain comes not from generating electricity but from converting it efficiently inside data centers, where high-voltage power must be stepped down thousands of times before it reaches GPUs. This process currently wastes about 15% to 20% of energy, C2i’s co-founder and CTO Preetam Tadeparthy said in an interview.
“What used to be 400 volts has already moved to 800 volts, and will likely go higher,” Tadeparthy told TechCrunch.
Founded in 2024 by former Texas Instruments power executives Ram Anant, Vikram Gakhar, Preetam Tadeparthy, and Dattatreya Suryanarayana, along with Harsha S. B and Muthusubramanian N. V, C2i is redesigning power delivery as a single, plug-and-play “grid-to-GPU” system spanning the data-center bus to the processor itself.
By treating power conversion, control and packaging as an integrated platform, C2i estimates it can cut end-to-end losses by around 10% — roughly 100 kilowatts saved for every megawatt consumed — with knock-on effects for cooling costs, GPU utilisation and overall data-center economics.
“All that translates directly to total cost of ownership, revenue, and profitability,” Tadeparthy said.
For Peak XV Partners (which split from Sequoia Capital in 2023), the attraction lies in how power costs shape the economics of AI infrastructure at scale. Rajan Anandan, the venture firm’s managing director, told TechCrunch that after the upfront capital investment in servers and facilities, energy costs become the dominant ongoing expense for data centers, making even incremental efficiency gains highly valuable.
“If you can reduce energy costs by, call it, 10 to 30%, that’s like a huge number,” Anandan said. “You’re talking about tens of billions of dollars.”
The claims will be tested quickly. C2i expects its first two silicon designs to return from fabrication between April and June, after which the startup plans to validate performance with data-center operators and hyperscalers that have asked to review the data, according to Tadeparthy.
The Bengaluru-based startup has built a team of about 65 engineers and is setting up customer-facing operations in the U.S. and Taiwan as it prepares for early deployments.
Power delivery is one of the most entrenched parts of the data-center stack, long dominated by large incumbents with deep balance sheets and years-long qualification cycles. While many newer companies focus on improving individual components, redesigning power delivery end-to-end requires coordinating silicon, packaging, and system architecture simultaneously — a capital-intensive approach that few startups attempt and one that can take years to prove in production environments.
Anandan said the real question now is execution, noting that all startups face technology, market, and team risks when betting on how industries evolve. In C2i’s case, he said, the feedback loop should be relatively short. “We’ll know in the next six months,” said Anandan, pointing to upcoming silicon and early customer validation as the moment when the thesis will be tested.
The bet also reflects how India’s semiconductor design ecosystem has matured in recent years.
“The way you should look at semiconductors in India is, this is like 2008 e-commerce,” said Anandan. “It’s just getting started.”
He pointed to the depth of engineering talent — with a growing share of global chip designers based in the country — alongside government-backed design-linked incentives that have lowered the cost and risk of tape-outs, making it increasingly viable for startups to build globally competitive semiconductor products from India rather than operate only as captive design centers.
Whether those conditions translate into a globally competitive product will become clearer over the coming months, as C2i begins validating its system-level power solutions with customers.
India has 100 million weekly active ChatGPT users, making the country one of OpenAI’s largest markets globally, CEO Sam Altman said ahead of a government-hosted AI summit.
On Sunday, Altman outlined ChatGPT’s growing adoption in India in an article published in the Indian English daily Times of India, as OpenAI prepares to formally participate in the five-day India AI Impact Summit in New Delhi, beginning Monday. Altman is attending the event alongside senior executives from several of the world’s leading AI companies.
The growth comes as OpenAI, like other leading AI firms, looks to India’s young population and its more than a billion internet users to fuel global expansion. The ChatGPT maker opened a New Delhi office in August 2025 after months of groundwork in the country, and has adjusted its approach for India’s price-sensitive market, including rolling out a sub-$5 ChatGPT Go tier that was later made free for a year for Indian users.
In the article, Altman said India is ChatGPT’s second-largest user base after the United States, highlighting the South Asian nation’s growing weight in OpenAI’s global strategy. The disclosure comes as ChatGPT’s overall usage has surged worldwide, with the platform reaching 800 million weekly active users as of October 2025 and reported to be approaching 900 million.
Altman also highlighted the role of students in driving adoption, saying India has the largest number of student users of ChatGPT globally.
Indian students have become a key growth segment for leading AI companies more broadly, as rivals race to embed their tools in classrooms and learning workflows. Google has similarly targeted the market, offering Indian students a free one-year subscription to its AI Pro plan in September 2025. Separately, India accounts for the highest global usage of Gemini for learning, Chris Phillips, Google’s vice president and general manager for education, said last month.
“With its focus on access, practical Al literacy, and the infrastructure that supports widespread adoption, India is well positioned to broaden who benefits from the technology and to help shape how democratic AI is adopted at scale,” Altman wrote.
ChatGPT’s rapid growth also highlights a broader challenge for AI companies in India: translating widespread adoption into sustained economic impact. Indian government initiatives such as the IndiaAI Mission — a national program aimed at expanding computing capacity, supporting startups and accelerating AI adoption in public services — seek to address those gaps. However, the country’s price-sensitive market and infrastructure constraints have made monetization and large-scale deployment more complex than in developed economies.
“Given India’s size, it also risks forfeiting a vital opportunity to advance democratic AI in emerging markets around the world,” Altman wrote, warning that uneven access and adoption could concentrate AI’s economic gains in too few hands.
Altman also signaled that OpenAI plans to deepen its engagement with the Indian government, writing that the company would soon announce new partnerships aimed at expanding access to AI across the country. He did not provide details, but said the focus would be on widening reach and enabling more people to put AI tools to practical use.
The India AI Impact Summit is expected to draw a wide cross-section of global technology and political leaders, including Anthropic CEO Dario Amodei, Sundar Pichai of Google, and senior Indian business figures such as Mukesh Ambani and Nandan Nilekani. Political leaders including Emmanuel Macron, Sheikh Khaled bin Mohamed bin Zayed Al Nahyan, and Luiz Inácio Lula da Silva are also expected to attend, spotlighting India’s ambition to position itself as a central player in global AI debates.
For global AI firms, including OpenAI, the summit underscores how India’s vast user base is translating into growing influence over how the technology evolves.
OpenAI did not respond to a request for comment.
Neysa, an Indian AI infrastructure startup, has secured backing from U.S. private equity firm Blackstone as it scales domestic compute capacity amid India’s push to build homegrown AI capabilities.
Blackstone and co-investors, including Teachers’ Venture Growth, TVS Capital, 360 ONE Asset, and Nexus Venture Partners, have agreed to invest up to $600 million of primary equity in Neysa, giving Blackstone a majority stake, Blackstone and Neysa told TechCrunch. The Mumbai-headquartered startup also plans to raise an additional $600 million in debt financing as it expands GPU capacity, a sharp increase from the $50 million it had raised previously.
The deal comes as demand for AI computing surges globally, creating supply constraints for specialized chips and data center capacity needed to train and run large models. Newer AI-focused infrastructure providers — often referred to as “neo-clouds” — have emerged to bridge that gap by offering dedicated GPU capacity and faster deployment than traditional hyperscalers, particularly for enterprises and AI labs with specific regulatory, latency, or customisation requirements.
Neysa operates in this emerging segment, positioning itself as a provider of customized, GPU-first infrastructure for enterprises, government agencies, and AI developers in India, where demand for local compute is still at an early but rapidly expanding stage.
“A lot of customers want hand-holding, and a lot of them want round-the-clock support with a 15-minute response and a couple of our resolutions. And so those are the kinds of things that we provide that some of the hyperscalers don’t,” said Neysa co-founder and CEO Sharad Sanghi.
Ganesh Mani, a senior managing director at Blackstone Private Equity, said his firm estimates that India currently has fewer than 60,000 GPUs deployed — and it expects the figure to scale up nearly 30 times to more than two million in the coming years.
That expansion is being driven by a combination of government demand, enterprises in regulated sectors such as financial services and healthcare that need to keep data local, and AI developers building models within India, Mani told TechCrunch. Global AI labs, many of which count India among their largest user bases, are also increasingly looking to deploy computing capacity closer to users to reduce latency and meet data requirements.
The investment also builds on Blackstone’s broader push into data center and AI infrastructure globally. The firm has previously backed large-scale data centre platforms such as QTS and AirTrunk, as well as specialized AI infrastructure providers including CoreWeave in the U.S. and Firmus in Australia.
Neysa develops and operates GPU-based AI infrastructure that enables enterprises, researchers, and public sector clients to train, fine-tune, and deploy AI models locally. The startup currently has about 1,200 GPUs live and plans to sharply scale that capacity, targeting deployments of more than 20,000 GPUs over time as customer demand accelerates.
“We are seeing a demand that we are going to more than triple our capacity next year,” Sanghi said. “Some of the conversations we are having are at a fairly advanced stage; if they go through, then we could see it sooner rather than later. We could see in the next nine months.”
Sanghi told TechCrunch that the bulk of the new capital will be used to deploy large-scale GPU clusters, including compute, networking and storage, while a smaller portion will go toward research and development and building out Neysa’s software platforms for orchestration, observability, and security.
Neysa aims to more than triple its revenue next year as demand for AI workloads accelerates, with ambitions to expand beyond India over time, Sanghi said. Founded in 2023, the startup employs 110 people across offices in Mumbai, Bengaluru, and Chennai.
As India’s first AI company to IPO, Fractal Analytics didn’t have a stellar first day on the public markets, as enthusiasm for the technology collided with jittery investors recovering from a major sell-off in Indian software stocks.
Fractal listed at ₹876 per share on Monday, below its issue price of ₹900, and then slid further in afternoon trading. The stock closed at ₹873.70, down 7% from its issue price, lending the company a market capitalization of about ₹148.1 billion (around $1.6 billion).
That price tag marks a step down from Fractal’s recent private-market highs. In July 2025, the company raised about $170 million in a secondary sale, at a valuation of $2.4 billion. It first crossed the $1 billion mark in January 2022 after raising $360 million from TPG, becoming India’s first AI unicorn.
Fractal’s IPO comes as India seeks to position itself as a key market and development hub for AI in a bid to attract investment amid increasing attention from some of the world’s most prominent AI companies. Firms such as OpenAI and Anthropic have been engaging more with the country’s government, enterprises, and developer ecosystem as they seek to tap the country’s scale, talent base, and growing appetite for AI tools and technology.
That push is on display this week in New Delhi, where India is hosting the AI Impact Summit, bringing together global technology leaders, policymakers and executives.
Fractal’s subdued debut followed a sharp recalibration of its IPO. In early February, the company decided to price the offering conservatively after its bankers advised it to, cutting the IPO size by more than 40% to ₹28.34 billion (about $312.5 million), from the original amount of ₹49 billion ($540.3 million).
Founded in 2000, Fractal sells AI and data analytics software to large enterprises across financial services, retail and healthcare, and generates the bulk of its revenue from overseas markets, including the U.S. The company pivoted toward AI in 2022 after operating as a traditional data analytics firm for over 20 years.
Fractal touted a steadily growing business in its IPO filing, with revenue from operations rising 26% to ₹27.65 billion (around $304.8 million) in the year ended March 2025 compared to a year earlier. It also swung to a net profit of ₹2.21 billion ($24.3 million) from a loss of ₹547 million ($6 million) the previous year.
The company plans to use the IPO proceeds to repay borrowings at its U.S. subsidiary, invest in R&D, sales and marketing under its Fractal Alpha unit, expand office infrastructure in India, and pursue potential acquisitions.
Without a doubt, one of the hottest new startup accelerators in tech right now is Andreessen Horowitz’s Speedrun program. Launched in 2023, the accelerator has an acceptance rate of less than 1%. In a January blog post, the program said that over 19,000 startups pitched and fewer than 0.4% were accepted into the latest cohort.
The program used to focus on gaming startups, then expanded into entertainment and media, and is now a “horizontal program,” Joshua Lu, the program’s general manager and a partner at a16z, told TechCrunch. Today, founders of any type of startup can apply, and the program runs for about 12 weeks in San Francisco. It once had a program in Los Angeles, but Lu said the focus will be on SF from now on.
There are two cohorts a year, and around 50 to 70 startups are accepted into each. The program invests up to $1 million into each company, though the downside is that it’s a bit pricey. It typically invests $500,000 up front in exchange for 10% of the startup’s company via a SAFE note, and another $500,000 if the next round is raised within 18 months, at whatever terms agreed to by the other investors.
In comparison, Y Combinator typically takes a fixed 7% of the company for $125,000, with another $375,000 “invested on an uncapped MFN safe.”
Speedrun said its program is more “equity expensive” because of what it offers founders. It provides them with access to a16z’s advisory and business networks that assist with tasks like go-to-market, brand development, media strategy, and talent sourcing. Plus it offers the startups perks like $5 million in credits to vendors such as AWS, OpenAI, Nvidia, and Deel.
Given the high interest, and low acceptance rate, TechCrunch spoke to Lu for some tips on how startups can best stand out. The latest cohort began in January and will end in April with a Demo Day. Applications for the next cohort open in April, though it looks at off-season applications year-round, Lu said.
Focus on the founding team
Speedrun focuses on early-stage startups. Because of this, they really examine who is on the founding team and whether their skills complement each other, Lu said.
“That doesn’t mean one has to be technical and one has to be commercial and one has to be marketing,” Lu said. It means that “we prefer not to see any glaring holes in capabilities or interests. We want the founding team to be self-aware and for that to be part of the hiring plan.”
They also like to see teams that have worked together before or have a shared history.
“There are lots of things that a founding team has to navigate in their startup journey and having a bit of pattern recognition, being able to work with each other, knowing how to disagree and how to come out the other side of a disagreement, those are all things people on founding teams with shared histories have an easier time with, on average,” he continued.
Even though AI has lowered the barriers to building software, it’s still incredibly helpful for a founding team to be technical, Lu said. At the same time, because AI has made it much faster to build and validate hypotheses and get a product out there, Lu said the Speedrun team likes to see when a startup already has a little bit of market validation or traction for their product.
“Speedrun as a program is really great at helping teams pour gasoline on a very small spark or fire,” he said. “We look for teams that have endeavored to build and try to show us that there’s a little spark we can fan the flames on.”
Limit the market “theory”
Lu said one common mistake founders often make in the application process is spending too much energy talking about the market theory or why there is a defined problem and why their solution is the right one. “All of that may be true,” he said.
At the same time, he added, even the biggest, most successful tech companies faced unexpected blockades when they were young, sometimes even pivoting completely. What a company thinks it’s going to build at the beginning isn’t necessarily what will make it successful at the end.
“What we really want to hear about is why this founding team is really good together,” he continued, “why they’re a great founding team, the best possible founding team to solve this particular problem.” And then on top of that, any validation on the idea itself.
It’s okay to use AI for the application, but…
Lu said the program encourages every founder to use AI to “clean up” their application. He said there is now no excuse for grammar errors or misspellings given the rising sophistication of AI tools. He also said AI can help founders sort out their thoughts, making them clearer, more concise, and more coherent.
But if AI did all the work in explaining the startup, that may backfire. If a founder makes it to the next round, it will be a live video-call interview. “At that point, their live narration explanation skills are going to be put to the test,” he said. So founders should be prepared to talk cogently about their startup without the help of AI.
Only about 10% of founders make it to the video-call stage. There are typically two to three investors on the judging panel at a time.
After the live interview, the team typically conducts a few more screening calls with the founders, and then a final decision on the cohort is made.
Be greedy to network
There are, of course, other accelerator programs for startups to choose from. Lu said Speedrun itself was inspired by some of these other programs.
Still, he said, this accelerator prides itself on giving founders access to a large, specialized operating team. In fact, he said the best teams that get the most out of the program are the ones most “greedy about getting exposure to the amazing people and programs” Speedrun has to offer.
Lu listed off just a few points: a16z has around 600 people, and 10% of that staff is on the investment team, he said; everyone else is an operator who supports the companies the firm works with. As a result, founders in Speedrun will have access to experts who can help with marketing, banking, finance, management, and many other functions. So it helps to know who the startup wants to connect with and why.
“We tell founders that come through the program, what you get out of Speedrun is what you put into it,” he said. “We think founders who want to take advantage of world experts in many different domains early in their startup journey would be really smart to choose us.”
Advice from a founder in the program
Founder Mohamed Mohamed, who is in the recent cohort, just announced a $5 million raise for his proptech startup Smart Bricks led by a16z’s Speedrun. He was attracted to the program because he said it stood out as one of the few “explicitly designed for co-founders working on frontier AI applications,” and he picked it because he wanted a program that would allow him to “stress-test an ambitious technical vision.”
Mohamed said he treated the application like an internal strategy memo rather than a pitch. “Instead of polishing buzzwords, we focused on clarity — the real problem, why it’s structurally hard, and why our team is unusually well-positioned to solve it,” he said. “We were explicit about what was working, what wasn’t, and where we needed help. I think that honesty and clear articulation of why this problem matters” is what helped the company in the application process.
He called the whole process “rigorous but refreshingly thoughtful,” and said it was designed to understand how founders think, not just what they have built so far. “The conversations went deep into product architecture, data strategy, and long-term ambition. It felt closer to a partner-level discussion than a typical accelerator interview, which was a strong signal for us,” he said.
His overall advice is to be “intellectually honest and precise.” For example, he said in his application he avoided “over-optimizing” for the sake of hyping up his company. “If you’re vague, derivative, or overly defensive about your idea, it shows quickly. Don’t try to sound bigger than you are; clarity about where you actually are is far more compelling than inflated narratives,” he said.
In the end, “Speedrun isn’t looking for perfect companies; they’re looking for founders who can reason clearly about complex problems and build with conviction,” he said. “Articulate the hard parts of what you’re doing and why they’re worth tackling. Depth beats polish every time.”
Correction, story originally misstated YC’s investment for its 7%. It has been corrected.
Gabriel Vasquez, a partner at Andreessen Horowitz, recently revealed he took nine flights from NYC to Stockholm in one year. While his visits included stops at companies like Lovable — where he posted from its office — the trips were also about finding future Swedish unicorns before they cross the Atlantic.
This all came to light when news emerged that a16z had led a $2.3 million pre-seed round into Dentio, a Swedish startup that uses AI to help dentists’ practices with admin work. While this is a small check for a firm that just announced new funds totaling $15 billion, it confirms that U.S. VCs are actively seeking deal flow outside of the U.S., even without local offices.
Stockholm is a natural stop for a16z, which previously achieved significant returns from backing Skype, cofounded by Swedish entrepreneur Niklas Zennström. Since then, a significant number of fast-growing startups have been created in the Swedish capital, and the VC heavyweight tracked down where many of them were coming from.
“We spend a lot of time developing a deep understanding of specific markets and knowing where innovation is emerging. In Sweden, that has meant closely tracking ecosystems like [SSE Business Lab] — the startup incubator of the Stockholm School of Economics — and the companies coming out of it,” Vasquez told TechCrunch.
Like fintech giant Klarna, legal AI startup Legora, and e-scooter company Voi, Dentio is an alum of SSE Business Lab — a startup incubator that has produced several successful Swedish companies. The three former high school classmates Elias Afrasiabi, Anton Li and Lukas Sjögren joined the incubator after reconnecting as students at both the SSE (Stockholm School of Economics) and KTH (Royal Institute of Technology), then joined the incubator with additional backing from KTH’s Innovation Launch program. They tackled a problem close to home: Li’s mom, a dentist, had told them how admin work detracted from clinical care.
The trio intuited that they could leverage LLMs to help people like her — an idea that they also validated with her and her colleagues. This led them to Dentio’s initial product, a recording tool that uses AI to generate clinical notes. But it’s only a matter of time before AI scribes become a commodity product, and Dentio needs to prove its value to dentists so they aren’t tempted to switch providers when that happens, Afrasiabi said.
Potential competitors include fellow Swedish startup Tandem Health, which raised a $50 million Series A round last year to support clinicians with AI across multiple medical specialties. Dentio, by contrast, focuses exclusively on dentists, but it believes it can still reach the scale VCs expect through international expansion
“Now we’re a team of seven people, and we think that it’s possible to build a unified way of handling administration all over Europe, and maybe even all over the world,” Afrasiabi said. While Europe’s healthcare systems are fragmented, they share similarities, and Dentio’s assumption is that what works in Sweden could work elsewhere in the EU.
Dentio prominently features its “Made in Sweden” branding and emphasizes that “all relevant data is processed in Sweden and Finland in compliance with Swedish and EU law.” It signals data protection to privacy-conscious European customers. But it also signals potential to VCs — a callback to Sweden’s history of producing breakout companies.
“We went to zero meetups. I reached out to zero investors,” Afrasiabi said. While the team was heads down building, the word spread out. “I think it was mostly through referrals and people talking to each other that the news got all the way over to the U.S.,” he said.
This wasn’t happenstance: a16z has eyes around the world in order to spot these companies as early as local funds might, Vasquez said. “In Sweden for example, we partnered with top founders abroad like Fredrik Hjelm, founder of Voi, and Johannes Schildt, founder of Kry, by turning them into scouts and mapping the best local talent.”
For Vasquez, who focuses on AI application investments for a16z, this isn’t just about Sweden, but about “a pattern of great global companies being born abroad and scaling quickly,” from Black Forest Labs in Germany to Manus, the Singapore-based AI startup recently acquired by Meta.
Born and raised in El Salvador, he has also been spending time in São Paulo. “I’m really excited about what’s brewing in Brazil and across Latin America in AI,” he wrote on LinkedIn at the time. “I believe AI is the great equalizer,” he added. “Most people now have access to PhD-level intelligence on a phone, and ultimately, Silicon Valley is a state of mind.”
Corrections: This story originally stated that a16z is an investor in Lovable owing to an editing error. The name of SSE’s incubator has also been corrected.
After the Justice Department released a trove of new documents tied to infamous sex offender Jeffrey Epstein, journalists digging through them have found extensive connections to Silicon Valley.
TechCrunch’s Sean O’Kane examined how a mysterious businessman named David Stern built a relationship with Epstein and pitched him investments in multiple electric vehicle startups, including Faraday Future, Lucid Motors, and Canoo.
On the latest episode of the Equity podcast, Kirsten Korosec and I talk to Sean about what he learned, and we discuss whether the Epstein revelations will lead to broader fallout in Silicon Valley.
You can read a preview of our conversation, edited for length and clarity, in the transcript below.
Sean: There are always people at the edges who don’t necessarily want to be front and center in the investment scene. And that was why I started looking through these files, in part because a long time ago, flashback 10 years ago on my beat especially, there was just a ton of Chinese investment in the space.
This was before even the rush of EV startups in China that we see today […] In autonomous vehicles, but electric vehicles especially, there was this moment where Chinese investors and Chinese companies, state-owned automakers, all they wanted to do was to be looked at like Silicon Valley startups. So they came here and they invested in companies and helped get them off the ground, or in some cases even set up offices in Silicon Valley.
And it was in that environment that a lot of the companies that I’ve covered for a long time popped up. There was just never a full picture of how a lot of them were funded.
One in particular, this company called Canoo, which is now bankrupt and out of business, had maybe the most mysterious set of investors of all of them. They really were not upfront about it when they first sort of came out of stealth in early 2018. And it frankly took until there was a lawsuit between some people who ran the company near the top that the investors were revealed.
At the time, it was this businessman in China who was relatively close, the son-in-law of the former sort of like the fourth most senior CCP official under the previous leader of China and a giant electronics magnate from Taiwan. And then there was this really strange guy named David Stern, who was the third founding investor. And there was so little information about this guy.
I could tell, back then, that he was some sort of German businessman, that he had some connections to China, but it wasn’t really clear how he had gotten involved. The only thing I really remember hearing at the time was that he was close with Prince Andrew, which I just thought was very strange, this idea that someone had even told me a long time ago, probably in 2018 or 2019, that Prince Andrew was involved with this company Canoo in some way, maybe not invested, but advising or something.
It was something that stuck in my head for a very long time, clearly, because I went looking for that information as more of these files came out, assuming that proximity to Prince Andrew means proximity to someone like Epstein.
And that was the case here, more so than I could have imagined, because this guy Stern turned from an enigma or a ghost into someone who was present through all this dealmaking 10 years ago, where we see him pitching, in the span of about a year and a half, investments in Faraday Future, trying to convince Epstein to maybe throw a couple hundred million dollars into that company, trying to buy the 30% stake that Faraday Future’s founder had bought or acquired in Lucid Motors arrival at the time, which I feel is an overlooked dynamic [in] how those companies grew around then — and then also in Canoo.
Epstein never invested in any of those companies despite that proximity, but it was just such a revealing thing. And I get into it in the story that I wrote last week, but we get this sweep of a decade of relationship that Stern had with Epstein from approaching him initially in 2008, kind of hat in hand, and introducing himself and saying, “Hey, I want to invest in China. Will you throw in some money?” to being someone who was seemingly very close to him by the end.
Kirsten: The whole thing is really interesting, and it goes back to my initial comments about how sometimes when you get a chance to look back at with new information at how deals were unfolding, it really just changes your perception and perspective of the time.
And for those who didn’t follow quote-unquote “mobility,” think of it as how we’re thinking about physical AI these days. Everyone was talking about it. Every automaker wanted to have a piece of quote-unquote “the future of transportation” or “mobility.” And so it makes a lot of sense that some of these more secretive types were also jumping in.
Sean, one of the points you made to me as I was working on the story with you, in terms of editing it, you were [saying], it was very clear that Epstein and David Stern weren’t really about investing and building companies. It was all about how to make the most money the fastest. And that, I think, is really historically important and interesting and gives you a little bit of an insight into — in addition to all the horrible, horrifying, terrible things he did to human beings, [Epstein] was a complete operator as well, in order to make money as quickly as possible. And you see that in these emails and exchanges between David Stern and Epstein.
Sean: Yeah, to both of those points really, I open the story with a moment in time where Lucid Motors […] they had been basically a battery supplier for a long time and then they pivoted into the passenger vehicle startup that we know them as today, but they were really struggling to raise their Series D at the time, and they really needed that money to start production of their first electric sedan.
They were struggling, behind the scenes in large part because the founder of Arrival quietly amassed this major stake and was kind of pushing people away and making it look like an uninvestable company in some ways, but the hype around all of that at the time was creating opportunities for people like Stern and Epstein, and we see them talk in these emails about, you know, Stern comes to Epstein and basically says, “I heard that they’re raising. Can you get information from Morgan Stanley?”
Epstein turns around and passes that information back, and then you see this discussion about, okay, well, Morgan Stanley says Ford — which was reported at the time — had kind of an investment offer, potential acquisition offer, on the table for Lucid Motors [and] was going to come in in that Series D. And they’re chopping up — do we invest in this and maybe get a big return down the road? Or is it something that we sell as Ford comes in a couple months later, if we can get this stake now at fire sale prices?
Ultimately, they didn’t go through with that, but Stern did eventually invest in Canoo and help get that company off the ground.
Anthony: One thing — maybe pulling back a little bit from the specific industries or investments — that’s also an important piece of context that generally gets mentioned in any of these stories about Epstein in Silicon Valley, but is worth repeating here, is that he [pleaded] guilty to soliciting prostitution from a minor in 2008.
Almost all the emails that we’re talking about with these stories [and] in pretty much any other story about Epstein in Silicon Valley comes after that. So it’s also partly a story about how people get comfortable with the idea that, okay, this guy has a pretty shady past already. He wasn’t the infamous criminal that he eventually [became], but there were things that were already known about him, and because he was a source of connections to power, to famous names, to money, a lot of people were just willing to look past that.
