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Crypto chaos: FTX files for bankruptcy, CEO departs
In a shocking development in the cryptocurrency industry, exchange FTX announced Friday that it filed for bankruptcy protection and Sam Bankman-Fried resigned as CEO.
The development came after the world's largest crypto exchange, Binance, made an offer Tuesday to buy the second-largest exchange, FTX, after the former more or less caused a liquidity crisis at the latter, Bay Area Inno reports.
By Wednesday, the deal had already fallen apart. Binance pulled out of the deal as a "result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations."
The originally proposed deal spun out of a feud between the firms' founders, Binance's Changpeng Zhao and FTX's Sam Bankman-Fried, respectively, over Bankman-Fried's crypto lobbying in Congress. Zhao had been one of FTX's first investors, but that put the two founders at odds.
On Monday, Zhao went on Twitter to say that he was pulling out of FTX by selling off its native token en masse, casting doubt on the company's finances. This caused a rush by users to withdraw funds from FTX. According to Reuters, withdrawals reached $6 billion in the 72 hours before Tuesday morning. Zhao's actions also caused the price of FTX's native coin, FTT, to crash.
But ultimately, the FTX-Binance deal quickly fizzled, with FTX's Bankman-Fried writing on Twitter Thursday morning that he was sorry and "should have done better."
The move leads to plenty of questions. What does this mean for the future of crypto? What does this mean for the industry's political influence? And what does this mean for the Bay Area's tech and crypto scene? Bay Area Inno dives into the impact of the news here.
Startups to watch
- TMRW Sports, a Winter Park, Florida-based golf technology company from Tiger Woods, announced its newest investors, which included Steph Curry, Serena Williams and Justin Timberlake. Founded in August, TMRW Sports is creating a tech-focused golf league called TGL. The TGL will consist of six teams of PGA Tour golfers competing in 15 regular-season, Monday night matches. Players, include Woods and Rory McIlroy.
- Plum, a Durham, North Carolina, vacation home co-ownership startup, raised funding from Netflix’s first CEO, Marc Randolph. The startup secured $175,000 in Entrepreneur magazine’s Elevator Pitch contest, where entrepreneurs step into an elevator and have just 60 seconds to pitch their business on camera.
- Birmingham, Alabama, startup BACKR helps enable fans to keep up with their favorite college players. It's created a sports media platform for following athletes, not teams, and was recently selected for the Techstars Minnesota Twins Accelerator's cohort.
- Vizit, a Boston image analytics software startup, measures what makes an effective image for a company’s target customers. The company analyzes the online interactions consumers have with commercial imagery and uses those interactions and AI to build artificial consumer audiences to test visuals for companies. It raised $10 million Series A round.
- Stooty Technologies is an Airbnb-type platform that connects creators with music studios. The Buffalo, New York, startup allows people with a home studio to rent it out to artists who need space.
- Chicago logistics startup project44 raised $80 million at a $2.7 billion valuation. The company, which counts Amazon and P&G as customers, says a public offering is in its future.
- Cincinnati startup Enable Injections is aiming to build a 150,000-square-foot headquarters as the company plans to more than double its headcount in the next five years. The firm is developing a device called the enFuse, a wearable drug-delivery device that has the potential to replace traditional IV therapy.
- Houston-based GoCo.io, a software firm providing human resources, benefits and payroll services to small and medium-sized businesses, raised $15 million in funding. The startup has grown to 130 employees, doubling in the last two years.
- Fursure, a Miami insurance marketplace and mobile banking platform for pet owners, secured $3 million in seed funding. Investors included Winklevoss Capital, a family office led by entrepreneurs Cameron and Tyler Winklevoss.
- Garret Brown, a prolific Philadelphia inventor and creator of the SkyCam, a camera that slides across a suspended cable above the fields at NFL stadiums, has launched a new product called The Zeen, an alternative to a wheelchair and a walker that can manually boost someone from a sitting position to a standing one without a battery or motorization.
- Jeffrey Jordan, son of Michael Jordan, and Tim Gobet, a 15-year Nike alum, recently launched Äktiiv, a sustainable, plant-based apparel brand. The products, which biodegrade within five years, are created by weaving three materials together in a way that makes the products durable, but with less permanent damage to the planet.
- Factory-built, carbon-negative homebuilder Aro Homes recently came out of stealth mode and announced it has raised $21 million in funding led by former Google CEO Eric Schmidt’s venture capital fund. The company was founded in June 2021 to design and build ultra-efficient homes inside of a factory setting.
- Founded just over two years ago in Columbus, Ohio, boutique software consulting and development firm Augustwenty is headed for $7 million revenue. Its 31-person team is made up almost entirely of former employees of Pillar Technology, one of central Ohio's most lauded and fastest-growing software firms until its surprise acquisition.
Tracking tech layoffs
After a year of massive growth in 2021, this year has been a different story for startups and major technology companies alike. The industry has seen 100,000 laid off employees this year, according to startup layoff tracker Layoffs.fyi, which tracks cuts at tech companies across the world.
To keep tabs on the U.S. tech firms undergoing layoffs, American Inno is keeping a running tally on the major cuts happening across the country's tech sector based on reporting from the Inno network and The Business Journals.
The top schools for startup founders
Which colleges produce the most venture-backed startup founders?
Stanford University; University of California, Berkeley; and Harvard University, according to a new report from venture capital data firm Pitchbook, which compiled a list of the 100 top colleges for startup founders.
While elite coastal schools topped the rankings, there was plenty of geographic diversity near the top of the list. See the rankings here.
Weird and wired
Relief from your allergies may soon come in the form of a lollipop. New Mexico-based AllerPops just wrapped up clinical trials of its flagship product — lollipops that help relieve allergies. Subjects in the trials showed relief from nasal allergy symptoms for up to a week after the treatment stopped.
