Hi there,

Here’s this week’s hot or not.

Hot: a16z in gaming

Seventeen percent of all the deals Andreessen Horowitz (a16z) participated in last year went to the gaming & entertainment industry.

79% of these deals were early-stage.  

We map out where a16z is focusing its attention across areas like game studios, gaming assets marketplaces, and social networks & community in this Investment Thesis Map.

Not: Retail investing app valuations
 

Robinhood’s Q1’23 earnings paint a grim picture of the challenges that retail investing apps face today:

• Heavy operating expenses

• Stalling or falling user growth

• Transaction volumes reaching a plateau

Robinhood’s market cap is down 77% from its IPO. 

Who else is at risk for a valuation haircut? Dig in here.

Hot: GenAI copilots for doctors
 

Generative AI copilots might be just what the doctor ordered.

They work alongside doctors, automating tedious tasks (like note-taking) and providing suggestions to speed things up.

The prospect of more productive doctors has been compelling to investors — genAI copilots for doctors have raised $240M+ since 2018.

While investor momentum has slowed down in 2023 so far, expect activity to pick up as access to powerful genAI models proliferates.

Dive into the generative AI copilots for doctors market in this brief.

CB Insights customers can see all the startups offering copilots for doctors in the CB Insights Generative AI Expert Collection.

API management unicorn Rapid is reportedly laying off 82% of its employees.

The startup reached a $1B valuation after raising $150M of Series D funding in March 2022. It’s now looking to sell. 

Rapid’s troubles could be a sign of things to come for other highly valued companies in the API management space.

We assess how much trouble other unicorns might be in here.

Hot: Cloud security
 

Last week, IBM confirmed its $60M acquisition of Polar Security — a data security posture management (DSPM) startup. 

DSPM is an approach that grants organizations visibility into their cloud data security standing, allowing them to identify/address vulnerabilities.

IBM isn’t the only one exploring acquisitions in the space — Datadog and others are reportedly looking to do the same.

What other DSPM companies are ripe for acquisition?

CB Insights customers can use funding, valuation, and other data in our DSPM Market Report to find out.

Not: AI mega-round funding

AI funding dropped 43% quarter-over-quarter in Q1’23 (excluding OpenAI’s rumored $10B investment).

However, funding from AI mega-rounds (deals worth $100M+) dropped by an even greater margin, falling 59%.

Like broader AI funding, genAI momentum helped keep mega-round funding from falling further.

GenAI startups accounted for $1.2B in mega-round funding in Q1’23 — more than half of the quarter’s total.

Dive deeper into genAI’s position within the broader AI ecosystem in our State of AI Q1’23 Report.

I love you. 

Anand 

@asanwal 

P.S. Successful VCs know how to find, assess, win, and nurture deals. How do they use CB Insights to do all of the above? Dive in right here and try it out for yourself.