#210 – OpenAI Operator, Walmart Product Testing, & DeepSeek pulls ahead

by | Jan 27, 2025 | Recent Newsletters

Hi Shopifreaks

Ready for another exciting week of e-commerce news? Shopifreaks has got you covered!

Shoutout to Dave Malda who commented on LinkedIn this morning, “Still my favorite newsletter after all these yrs 💯”

Dave's comment really made my day! Honestly, my News Partners keep the lights on, but your positive words about my newsletter keep me motivated to continue writing, growing, and giving Shopifreaks my best each week — so thank you for that!

If you had anything positive to share about this newsletter, please do me a favor and write a quick Google review, which goes a long way in helping me reach new readers. 

And now onto this week's jam packed edition where I cover:

  • OpenAI releases Operator into the wild
  • Walmart launches in-home product testing
  • DeepSeek pulls ahead in the AI race
  • Samsung Wallet gets new features
  • Wix integrates with YouTube Shopping
  • An update on TikTok happenings
  • Instagram's getting a TikTok-makeover
  • Shopify lays off more customer support
  • TumblrTV stages a revival
  • Threads tests ads
  • TikTokToo is coming to the US?

All this and more in this week's 210th Edition of Shopifreaks. Thanks for subscribing and sharing!

Stat of the Week

In Q4 2024, Google search spending rose 10% YoY while click growth remained relatively flat at 3% and CPC increased by 7%. Meanwhile, Meta saw 15% ad spend growth during the same period and TikTok saw 13% growth, a noticeable decrease from its 27% growth in Q3 and 64% growth in Q4 2024. Many advertisers pulled back on TikTok spending during the previous quarter given the uncertainty of the platform's future in the US.


1. OpenAI launches Operator to shop online for you

eBay, DoorDash, Instacart, & Uber are among the companies that have signed on to participate in the research preview of OpenAI's new Operator agent, which the company describes as “an agent that can use its own browser to perform tasks for you.”

Operator acts as a virtual assistant, autonomously preforming tasks across the Internet such as shopping, filling out forms, and booking travel based on the user's instructions. 

OpenAI wrote in its blog post announcing the launch:

“Today we’re releasing Operator⁠, an agent that can go to the web to perform tasks for you. Using its own browser, it can look at a webpage and interact with it by typing, clicking, and scrolling. It is currently a research preview, meaning it has limitations and will evolve based on user feedback. Operator is one of our first agents, which are AIs capable of doing work for you independently—you give it a task and it will execute it.”

Here's how Operator works:

  • It's powered by a new model called Computer-Using Agent (CUA) which combines GPT-4o's vision capabilities with advanced reasoning through reinforcement learning.
  • CUA is trained to interact with graphical user interfaces like buttons, menus, and text fields that people normally interact with on a website.
  • Operator uses screenshots to see and interact with webpages, using all the same actions as a mouse and keyboard, which allows it to engage with websites without the use of API.
  • If Operator gets stuck and needs assistance, it simply hands control back to the user for a collaborative experience.
  • To get started, users describe the task they'd like done and Operator handles the rest. Users can take over control of the remote browser at any point.
  • Operator is trained to proactively ask the user to take over for tasks that require login, payment details, or when solving CAPTCHAs.
  • It is also trained to decline certain sensitive tasks like banking transactions or those requiring high-stake decisions like applying for a job.

Operator and other AI agents like it will be a game changer for the visually impaired when it comes to accessing online services that would have otherwise taken them a significant amount of time to navigate using existing text-to-voice solutions. 

Operator is currently available to Pro users ($200/month) in the US, with plans to eventually expand it to Plus, Team, and Enterprise users as well as integrate the capabilities into ChatGPT in the future. Operator is currently in an early research preview, and OpenAI warns users that while it’s already capable of handling a wide range of tasks, it’s still learning, evolving and may make mistakes.

A few weeks ago I reported that Perplexity, the AI-powered search engine backed by Jeff Bezos, Tobi Lütke, and other notable investors, debuted a new shopping feature for its paid customers in the US that offers shopping recommendations as well as the ability to place an order without going to a retailer's website. Unlike OpenAI's Operator, Perplexity powers the feature via integrations with websites like Shopify, Amazon, and Best Buy, whereas Operator uses visual browsing and can operate with most websites without an integration. 

2. Walmart to let suppliers test products in customers' homes

Walmart is launching a program allowing verified customers to receive products at their homes, test them, and provide feedback to suppliers.

The in-home user test program is exclusively for suppliers that subscribe to the company's insight platform, Walmart Luminate (being rebranded as Scintilla in February), which helps brands design surveys to collect customer feedback on new or existing products.

The new in-home tests will be exclusively available to Walmart's Customer Spark community, which is an invitation-only group of shoppers that Walmart has used to conduct surveys with since 2018 and began utilizing for Luminate clients in 2022.

Modern Retail notes that suppliers often turn to third-party research companies rather than retailers to perform product testing, but now Walmart can provide the service directly by tapping into its massive customer base and data capabilities.

Duracell was one of the first brands to trial Walmart's user tests back in September ahead of its new packaging launch. The company wanted to ensure that its new paper-based packaging resonated with shoppers, so it targeted Walmart shoppers who had previously purchased batteries. Walmart and Duracell found that battery buyers overwhelmingly preferred the new packaging and appreciated the move to recyclable packaging.

Linda Lomelino, group director of product management for Walmart Data Ventures, said:

“Other research companies may have to tap into their panels or other third-party panels, and so what makes our capability unique is obviously the scale of Walmart, but also the value of our community. Because it’s an invitation-only community that leverages our customer database. We know who these customers are, and we can verify their transactional and behavioral data.”

“What we’re doing is essentially helping de-risk products going to market that maybe don’t resonate with customers, or helping suppliers really understand what may be wrong with a product so that they can correct those, iterate and launch better products in the future.”

Do you think Amazon will launch a similar user testing experience in the near future?

Amazon currently offers a service called Amazon Vine that allows customers to test products and write reviews, but it is meant to inform other customers rather than suppliers. However the company could easily leverage its network of customers, creators, associates, and product testers to offer brands a similar testing ground for products. 

3. DeepSeek, the AI you've never heard of that's winning the race

DeepSeek, a relatively unknown AI research lab from China, released an open source model that's quickly risen in popularity to become the #1 free download on Apple's App Store, leaving ChatGPT behind in second place.

According to a paper authored by the company, DeepSeek-R1 beats the industry's leading models like OpenAI o1 on several math and reasoning benchmarks. It's also significantly cheaper to use because it was significantly cheaper to develop.

Marina Zhang, an associate professor at the University of Technology Sydney, explains: 

“Unlike many Chinese AI firms that rely heavily on access to advanced hardware, DeepSeek has focused on maximizing software-driven resource optimization. DeepSeek has embraced open source methods, pooling collective expertise and fostering collaborative innovation. This approach not only mitigates resource constraints but also accelerates the development of cutting-edge technologies, setting DeepSeek apart from more insular competitors.”

CNBC published a great video report a few days ago that dives deeper into DeepSeek's history, including how it's been able to outperform America’s best AI models despite only taking two months and less than $6M to build, all without access to the top of the line processors that American AI companies are hoarding and the government is withholding from Chinese competitors. 

Liang Wenfeng, a former hedge fund founder who pivoted into the AI research that later became DeepSeek, told the Chinese tech publication 36Kr that the decision to enter the AI space was driven by scientific curiosity rather than a desire to turn a profit. He explained:

“I wouldn't be able to find a commercial reason even if you ask me to. Because it’s not worth it commercially. Basic science research has a very low return-on-investment ratio. When OpenAI’s early investors gave it money, they sure weren’t thinking about how much return they would get. Rather, it was that they really wanted to do this thing.”

When Liang put together DeepSeek's research team, he was not looking for experienced engineers to build a consumer-facing product, but instead focused on finding PhD students from China's top universities who were eager to prove themselves, but lacked industry experience.

In October 2022, when the US government started putting together export controls that restricted Chinese AI companies from accessing chips like Nvidia's H100, DeepSeek had to come up with more efficient methods to train its models. Born out of necessity, the firm optimized their model architecture using a mix-and-match approach of various engineering models and new ideas the team came up with, which they eventually combined to produce a cutting edge-model.

DeepSeek’s willingness to share these innovations with the public has earned it considerable goodwill within the global AI research community, which put Meta into panic mode

An anonymous Meta employee shared:

“Engineers are moving frantically to dissect DeepSeek and copy anything and everything we can from it. I'm not even exaggerating. Management is worried about justifying the massive cost of GenAI org. How would they face the leadership when every single ‘leader’ of GenAI org is making more than what it cost to train DeepSeek V3 entirely, and we have dozens of such ‘leaders’… DeepSeek R1 made things even scarier. I can’t reveal confidential info, but it’ll be public soon.”

Yann LeCun, Meta's chief AI scientist, looks at things differently. He said in a post on Threads, it's not that China's AI is “surpassing the US,” but rather than “open source models are surpassing proprietary ones.”

Days after DeepSeek's announcement, Meta CEO Mark Zuckerberg said Meta planned to spend more than $60B in 2025 as it doubles down on AI. That would pay for a lot of DeepSeek models!

4. Samsung Wallet adds BNPL management and peer-to-peer payments

Alongside the launch of the Galaxy S25 series last week, Samsung announced two updates coming soon to its Samsung Wallet that mirror existing features on iPhones with some improvements. Here's what's new: 

Instant Installment is a new Wallet feature that facilitates customer purchases and turns payments into what Samsung says is “the first offline payment plan experience.” Samsung isn't offering credit to consumers directly, but instead is simplifying the process for users to turn their purchases into installments at checkout and then letting the customer keep track of their installment payments through the Wallet app. Exact details on how it'll work and which BNPL platforms it'll integrate with is still unknown, other than that it'll be available at brick-and-mortar stores or online, with Visa or Mastercard credit cards.

Tap To Transfer is the company's new peer-to-peer payments feature, similar to Apple's Tap to Cash, which allows iPhone owners to hold their phones together to send money to each other. However unlike Apple's solution, Samsung's method will work with third-party digital wallets as well, and rather than tying the transaction directly to Samsung Wallet, the feature works with the debit or credit card linked to the users' Samsung Wallet account.

Although announced at the same time, neither of these features are tied to the launch of the Galaxy S25, but will roll out later this year, likely around March or into Q2. The features will also be available on older Galaxy devices as well, making them accessible to a wide user base right out the gate.

5. Wix integrates with YouTube Shopping

Wix launched an integration with YouTube Shopping that enables merchants to sell their products directly through the platform with increased visibility across their profile. Here's what's new: 

  • The update allows merchants to display their products in a dedicated store format on their YouTube profiles.
  • Merchants can tag products in YouTube videos, livestreams, and shorts.
  • Products appear on the YouTube store tab, making it easy for viewers to purchase.
  • Wix automatically syncs product details like descriptions and images between platforms.
  • Merchants can gain insights into customer shopping behavior via YouTube's analytics.

Merchants can oversee YouTube Shopping via the Google & YouTube Sales Channels section through the Wix dashboard, while accessing features like product tagging and drops, with Wix handling backend processes like inventory management and checkout.

Several other e-commerce platforms have integrated with YouTube Shopping to enable merchants to showcase and sell products directly through YouTube including Shopify, Fourthwall, Spreadshop, and Spring (formerly Teespring). BigCommerce doesn't offer a direct integration, but third-party apps make it possible. 

6. What's happening with TikTok?

Last week I reported that the US Supreme Court unanimously upheld the federal law mandating that TikTok's Chinese parent company, ByteDance, divest its US operations by January 19, 2025, or face a ban in the United States. 

On Saturday (Jan 18th), ByteDance subsequently shut down service in the US to TikTok and its other apps including CapCut, Lemon8, Gauth, and Marvel Snap. 

However by Sunday (Jan 19th), TikTok began restoring its services after Trump said he would revive the app's access in the US when he returns to power on Monday. Trump said he would “extend the period of time before the law's prohibitions take effect, so that we can make a deal to protect our national security” — but the catch is that Trump wants TikTok to operate under 50% US ownership in a joint venture. 

Here's what's happened since then: 

  • On his first day in office, President Trump came through on his promise and signed an executive order delaying the enforcement of the TikTok ban for 75 days, providing additional time to negotiate a resolution.
  • Despite President Trump's executive order delaying the enforcement of the TikTok ban, Apple and Google have not reinstated TikTok in their US app stores because they don't want to risk the $5k fine, per user, for violating the law if Trump's executive order doesn't withstand the test of time.
  • Consequently, new downloads and updates of the app remain unavailable for US users.
  • As a result, people are selling smartphones with TikTok pre-installed on platforms like eBay and Facebook Marketplace for thousands of dollars!
  • Initially, Beijing was opposed to a forced sale of TikTok. However, recent reports suggest that Chinese officials are now more open to the idea, especially if it helps prevent a nationwide ban in the US.
  • Several parties have expressed interest in acquiring TikTok's US operations, including Perplexity AI which submitted a revised merger proposal to ByteDance, suggesting the creation of a new entity where the US government could own up to a 50% stake post-IPO.
  • There have also been discussion about a proposal where Oracle and American investors would manage TikTok's US operations, with ByteDance retaining a stake.

I'll keep you posted in the coming weeks as the story progresses. 

7. IG's beginning to look a lot like TikTok!

Instagram is about to look a lot more like TikTok after implementing changes to its app like a vertical grid to replace its historically square profile grid. 

Some users were upset over the changes because they had spent time carefully aligning their square profile grids into beautiful experiences, but I'm sure they'll get over it, as Instagram says it has additional changes in the works to give users more control over how their profiles look.

Instagram head Adam Mosseri wrote in a caption on an Instagram post:

“We launched a new tall grid on profile this week and I got a lot of feedback, both positive and quite negative. The goal is a simpler, cleaner place that maintains, and even increases, creator control.”

Here's what else is changing at Instagram: 

  • Users will be able to adjust the crop of grid images.
  • They'll also be able to reorder their grid entirely.
  • Users will be able to post directly to their grid without simultaneously posting to their feed. (Love that one!)
  • Highlights, which allow users to pin stories to the top of their profile, are also moving to the grid.
  • Length of Reels are being increased from 90 seconds to up to 3 minutes.

Mosseri says that vertical post format is here to stay “because most photos and videos that are uploaded to Instagram at this point are vertical and rectangles do a better job showing off those photos and videos.”

The changes make sense, but why not give users the ability to filter their feeds by photos or videos so that they can view only the type of content they desire during a particular scroll session? Meta has made some smart updates over the years, but the one thing it's historically lacked for the past decade is giving users control over what they want to see and when they want to see it. I do understand that algorithmically generated feeds allow for more discovery and subsequently more advertising, but it comes at the expense of user experience. 

Every platform turning into a TikTok-like discovery content feed is leaving a huge gap in the market for people who want to do what social media was originally designed for — to keep up with their friends and family. Not every user wants to have videos of creators they've never met shoved down their throats across every platform.

8. Shopify quietly lays off more customer support staff

Shopify laid off even more employees from its customer support division, according to Business Insider sources. It's not clear how many were let go, but one person familiar with the matter estimated that it was at least a dozen.

So what, right? 12 employees got let go from a company with over 8,000 workers? That's not exactly headline news. Or is it….

Three people told Business Insider that Shopify has quietly laid off workers several times since its major restructuring in May 2023, in a manner similar to this week's layoffs. It appears that instead of performing massive layoffs that garner media attention, Shopify has been slowly but surely churning customer support staff without replacing them. 

Here's a quick recap of recent layoffs and changes that have particularly impacted Shopify's customer support division: 

  • Several years ago, Shopify began embracing AI for customer support, as well as hiring third-party vendors from the Philippines and Canada to assist with customer-service tickets, which employees said contributed to a decline in overall quality in response.
  • In early 2023, the company began “Code Yellow,” a project aimed at improving customer service levels that leaders said had “deteriorated beyond acceptable ranges.”
  • In July 2022, Shopify laid off 10% of its workforce, or roughly 1,000 employees.
  • In May 2023, it cut an additional 20% of staff while also selling its newly acquired logistics business.
  • Shopify's support division experienced a lot of turnover in its management ranks in 2024, with former leaders Glen Worthington, Clovis Cuqui, and Jen Bebb all departing the company.

There was a period of time a couple years ago when I also became critical of Shopify's customer support, but I've since seen a noticeable improvement. At the end of the day, the dozen customer support employees that got let go might have just been terrible at their job! I think sometimes companies get a lot of heat for layoffs, despite the old saying, “Hire slow, fire quick.”

9. Other e-commerce news of interest

Remember Tumblr TV? Me neither… Tumblr launched the GIF discovery feature in 2015 as an experimental product, but now, given all the TikTok drama and the fact that every other platform is launching a TikTok competitor, Tumblr has decided to add video to Tumblr TV and make the feature official. Users will now see a prominent tab in the app promoting the video feed, which leaves a lot to be desired at the moment because creators hadn't been making vertical videos for it, but may improve over time if folks start uploading videos. 


Threads began rolling out a “limited, early test of ads” within the app, beginning with a handful of brands in the US and Japan. The ads will appear as images between posts in your home feed, and Meta will use your activity on Threads and Instagram to deliver a personalized advertising experience. Man, I'm sure Zuckerberg and the team at Meta have been chomping at the bits to get ads onto Threads and now the day has finally arrived!


eBay is hoping to increase the number of buyers on its platform by incentivizing new sellers to become buyers too, offering a $15 coupon to spend on a purchase of $50 or more, if they sell an item for more than $10. Liz Morton of Value Added Resources notes that CEO Jamie Iannone's willingness to give up fee revenue in order to boost GMV and Active Buyers was a strategy that he had been highly critical of when the previous CEO Devin Wenig implemented it back in 2018-2019. eBay's active buyers grew to 133M in the most recent quarter after being stuck at 132M for 5 quarters, but the company has still had 10 consecutive quarters with less active buyers than Q1 2018.


In other eBay news… the company acknowledged a problem with its search engine yielding unrelated items in its results. Buyers and sellers have been discussing the poor search experience on the platform for several months, such as the issue of adding a word to a search query bringing back more results instead of fewer, which is contrary to typical search expectations. eBay says it is working on the issues. They should simply power their search engine with Google, Perplexity, or OpenAI. 


President Trump signed a full and unconditional pardon for Ross Ulbricht, aka: Dread Pirate Roberts, who operated the dark web marketplace Silk Road, which facilitated the sale of illicit items from 2011 until it was shut down in 2013. (Anyone else mis-remember Silk Road as operating for longer? Everyone knew about it!) Ulbricht was convicted in 2015 in a narcotics and money-laundering conspiracy and sentenced to two life sentences, plus 40 years, which the judge at the time said was to set an example for any potential copycats. The pardon is basically a free pass for Andy Jassy and any other online marketplace leaders to do whatever illegal things they want with immunity. “Well, if Ulbricht got out…”


Amazon restarted the application process for foreign workers to obtain green cards after a two-year pause in which the company suspended new PERM filings. Amazon didn't provide a specific reason for resuming the program, but likely its to prepare for a more competitive labor market. The Program Electronic Review Management process, or PERM, requires companies to prove that hiring foreign employees won't harm job opportunities or wages for US workers, and the process takes between 2-3 years and can cost up to $20,000 per employee.


TikTok launched GMV Max in the UK, a new AI-powered tool that brands can use to minimize the time it takes to create a campaign for their TikTok shopping efforts. The new solution was designed to maximize gross merchandise value by using AI to optimize brands' product listings within the app.


WhatsApp users will soon be able to sync their accounts to Instagram and Facebook, allowing single sign-on and the ability for users to share status updates across all three platforms. The link won't be activated automatically, which means it's up to users to choose whether to connect their accounts. 


The U.K.’s antitrust regulator opened investigations into Apple and Google over their business practices in the mobile market to determine whether the companies engage in anticompetitive practices. The probe picks up where the agency left off last August, when it closed a pair of investigations that it had launched in 2021 and 2022. The agency explained at the time that it was planning to restart the reviews under the UK's DMCC Act, which went into effect earlier this year.


Sheryl Sandberg, Meta's former COO and board member, was sanctioned by a Delaware judge for allegedly deleting e-mails related to the Cambridge Analytica privacy scandal, despite being instructed not to do so by a court. The e-mails were from her personal Gmail account, which she apparently used to communicate about business related to the scandal.  Now Sandberg must prove her defense by “clear and convincing” evidence


IMDb's founder and CEO, Col Needham, is stepping down as CEO after 35 years to be replaced by Nikki Santoro, who has served as the company's COO since 2021. Santoro has been with IMDb since 2016, leading the company in expanding its database and improving its Pro membership. She previously held leadership positions at Amazon (which acquired IMDb in 1998), Microsoft, and The Weather Channel.


Ulta Beauty's chief marketing & e-commerce officer, Michelle Crossan-Matos, is stepping down from the position, which she's served in since January 2023. Her departure comes on the hells of a CEO shakeup at the company. Dave Kimbell is retiring as CEO to be succeeded by Kecia Steelman, the company's president and COO.


In a leaked e-mail reviewed by The Wall Street Journal, Elon Musk said that X's “user growth is stagnant, revenue is unimpressive, and we're barely breaking even.” Musk denies ever sending that e-mail, but nonetheless, banks are getting ready to sell billions of dollars in debt borrowed by Elon Musk for the acquisition.


Meanwhile in Europe… an increasing number of European politicians and government agencies have suspended their accounts on X in response to Elon Musk's antics. The “X-odus” is part of a growing trend of European leaders looking for ways to reduce their dependency on Donald Trump-aligned US tech. Probably a smart move for the EU.


The UK's Competition and Markets Authority, a watchdog agency which has repeatedly investigated Amazon's business practices, will now be run by former Amazon executive Doug Gurr for some reason. The decision was explained as wanting to see regulators “supercharging the economy with pro-businesses decisions that will drive prosperity and growth, putting more money in people's pockets.”


ByteDance plans to spend more than $12B on AI infrastructure this year, about half of which would be used to acquire AI chips, doubling the amount it spent last year. The other half would be invested overseas to beef up its foundation model training capabilities using advanced Nvidia chips. ByteDance released its AI chatbot Doubao in August 2023, which has since become China’s most popular AI app.


Checkout.com, which was once Europe's most valuable private tech startup, turned a profit at the end of 2024 and is now targeting a full-year of profitability in 2025. The London-based payment processor reported a 45% YoY net revenue growth across its processing business last year after adding 300 new enterprise partners including Alibaba, Adidas, Delivery Hero, and Uber Eats.


Meta is offering deals to creators to promote Instagram on other short-form video apps including TikTok, Snapchat, and YouTube, attempting to seize the opportunity to promote the app while TikTok is not currently available for download from Apple and Google's app stores. As part of the deals, creators must promote Instagram twice a month on other platforms and exclusively post their content on Instagram for three months before posting it elsewhere. That sounds highly anti-competitive, but unfortunately anyone in the government who would've done something about it will soon no longer be in the position to do so. I'll miss you Lina Kahn!


Amazon announced that it will shut down its facilities in Quebec in the coming weeks and cut nearly 2,000 jobs to instead outsource deliveries to smaller contractors. The company insisted that the decision was not related to the recent unionization of 300 employees at one of its Quebec warehouses, and that it only has to do with cost savings. LOL, but you happened to choose to save cost at the unionized warehouse? Definitely sends a message to other facilities thinking about unionizing. 


Google agreed to take firmer action against British businesses that use fake reviews to boost their star ratings on its platform. This includes deactivating the ability to add new reviews for businesses found to be using fake reviews, and deleting all existing reviews for at least six months if they repeatedly engage in suspicious review activity, as well as placing prominent warning alerts on the profiles of businesses using fake reviews.


LinkedIn is being sued in California for sharing private user data with 3rd party companies for AI training without adequately notifying users or giving them the opportunity to opt out. The lawsuit also accuses the Microsoft-owned network of concealing its actions a month later by changing its privacy policy to say user information could be disclosed for AI training purposes. Half of LinkedIn is AI at this point, so does that mean AI companies are paying LinkedIn to train their LLMs on AI-generated content? 


Amazon removed statements advocating for LGBTQ rights and racial equality from its public listing of corporate policies. This move follows the company's deletion of statements to commit to “equity for Black people” and “LGBTQ+ rights” in December, along with any mentions of the word “transgender.”


Meanwhile north of the border, Shopify removed pages from its website for its Build Native with Shopify, Empowered by Shopify, and Social Impact programs. The Build Native program provided resources and incentives for Indigenous-led companies to grow their e-commerce presence, while the other two programs were employee-initiated directories of Black and Indigenous-owned businesses. 


YouTube users are experiencing extremely long, unskippable ads that are sometimes up to an hour long. Google says the ads are part of its global effort to “urge viewers with ad blocks enabled to allow ads on YouTube or try YouTube Premium for an ad free experience.” So effectively Google is bullying ad blocker users into ditching the software or subscribing to premium? Okay, I get that… but what companies are making these ridiculously long ads in the first place?


PayPal was fined $2M by regulators in New York over cybersecurity failures which exposed personally identifiable information including names, social security numbers, and e-mail addresses of tens of thousands of customers. The fine follows an investigation by the New York State Department of Financial Services into shortcomings in cybersecurity practices that led up to the December 2022 breach, which determined that PayPal failed to use ‘qualified personnel' to manage key cybersecurity functions and didn't provide adequate training to address risks in cybersecurity.


Generic User Acquisition Organization, a newly launched company based out of New York, announced plans for TikTokToo, a social media platform designed to “redefine digital interaction” by simply copying TikTok. In a two and a half minute introduction video, the company's founder Mr. Lee says, “China steals everything from US. Why we no steal from China?” Likely this is a troll video and TikTokToo won't ever see the light of day, but we all deserve a good laugh once in a while!

10. Seed rounds, IPOs, & acquisitions

Anthropic, a San Francisco-based AI research company and OpenAI rival, raised $1B from Google, just two weeks after it became public that the company was in advanced discussions to raise $2B from Lightspeed Venture Partners at a $60B valuation, and two months after Amazon invested an additional $4B in the startup. Around the same time, the company unveiled a new feature called Citations that lets its AI models provide detailed references to the exact sentences and passages from documents they used to generate responses. 


Infinite Reality, a Norwalk-based innovation company that develops immersive 3D websites, apps, games, digital media, and e-commerce platforms through AI and spatial computing, acquired Obsess, a virtual platform that has launched over 400 discovery-driven 3D digital stores and experiences, for an undisclosed amount. The acquisition follows Infinite Reality's $3B fundraising round announced earlier this month and marks the company's first acquisition since raising the capital. 


Amplience, a London-based provider of headless content management solutions that helps companies create, manage, and distribute digital content across multiple channels, raised €37.9M from AsheGrove's €650M Specialty Lending Fund II, bringing its total amount raised to over €249M. The company plans to use the funds to enhance its platform capabilities and product roadmap for its enterprise customers across EMEA and North America.


Package.ai, a Tel Aviv-based AI-powered platform that unifies last-mile delivery operations and customer engagement, raised $14M in a Series A round led by Susquehanna Growth Equity. The platform delivers what it calls the “full package” for retail operations using AI tools by combining high-touch customer engagement and an “Uber-like” delivery experience, which works especially well for service providers that rely on legacy systems with disparate fulfillment, customer service, and logistics departments. 


Palona AI, a Palo Alto-based startup focused on making AI-powered customer sales agents more emotionally attuned, raised $10M from friends and family, UpHonest Capital, Fusion Fund, Neo, others. The company's engineering leads, who used to work at Google, Meta, and Samsung, developed a model that runs on top of OpenAI's LLMs to act as a supervisor to chatbots and keep conversations on track and make them come across as more polite and aware of a brand's identity.


OUTFINDO, a Prague-based AI technology startup focused on simplifying the selection of complex products for customers, raised €1.2M in a round led by Eleven Ventures. The company's flagship product offers ready-made product guides that lead customers through a series of intuitive questions, enhancing the shopping experience and increasing conversion rates.


Qomodo, an Italian fintech specializing in BNPL solutions and smart payment systems for brick-and-mortar merchants, raised €13.5M in a Series A round led by RTP Global and LMDV Capital. In its first year of business, the company say it quintupled the number of offline merchants it serves and onboarded tens of thousands of new customers, while launching SmartPOS, a platform that manages merchant transactions. 


Highnote, a San Francisco payments platform that enables businesses to issue cards, accept payments, and manage credit programs, raised $90M in a Series B round led by Adams Street Partners at a $750M valuation, bringing its total amount raised to $145M. Alongside the funding round, the company announced the launch of a new API-based acquiring solution that provides a customizable plug-in checkout software to enable companies to accept online card payments. 


Caffeinated Capital, a San Francisco venture capital firm started by Raymond Tonsing, is raising $400M for its fifth fund. The firm was an early investor in Airtable, Affirm, Optimizely, and Saronic and has already raised $160M towards its new fund.


Databricks, a San Francisco-based data and AI company that provides a cloud platform to help organizations process and analyze large-scale data efficiently, raised $10B in a Series J round participated in by newcomer investor Meta at a $62B valuation, bringing its total amount raised to $19B. The company will use the funds to provide liquidity to current and former employees, make acquisitions, and expand overseas. 


Daniel Supernault, the developer behind Pixelfed, Loops, and Sup, open source alternatives to Instagram, TikTok, and WhatsApp, is raising funds on Kickstarter to fuel the app's further development. The apps are part of the fediverse, which is powered by the same ActivityPub protocol used by Mastodon. The campaign has already doubled its $35k goal since launch.


ShopMy, a marketing platform for content creators to connect with brands and monetize their content, raised $77.5M in a Series B round led by Bessemer Venture Partners and Bain Capital Ventures alongside notable investors from Shopify, Pinterest, and LinkedIn. The company will use the funds to grow its team and expand across new verticals including health & wellness, food & beverage, hospitality, and family. 


Vertice, a spend optimization platform designed to help businesses manage and reduce their SaaS and cloud expenditures, raised $50M in a Series C round led by Lakestar, bringing its total amount raised to $100M. The startup built a “large software procurement model” to build a picture of what a company does, how much it usually spends, and what it might need or want to buy next, cutting purchasing cycles in half and saving up to 30% on procurement. 


Fundraise Up, an online fundraising platform that helps nonprofits increase donation revenue through AI-driven conversion optimization and modern payment methods, raised $70M in a round led by Summit Partners, bringing its total amount raised to $80M. The company says that it incorporates AI into its offerings, which enables it to do more than the average fundraising tool, such as tailoring donation suggestions to individual donors, recommending that donors upgrade to recurring donations, and offering retention options when a donor is about to cancel. 


Clutch, a San Francisco fintech that partners with credit unions to enhance their digital banking capabilities, raised $65M in a Series B round led by Alkeon Capital Management. The company will use the funds to invest in AI and expanded platform capabilities to help credit unions compete more effectively for tech-savvy consumers.

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PAUL

Paul E. Drecksler
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PS: What did the ocean say to the beach? Nothing, it just waved.

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