Welcome to the weekly startup recap, where we cover the most significant events in the startup world. To receive this recap in your inbox every Friday, sign up here.

The concept of hype can have both positive and negative implications. This week, we witnessed startups experiencing both sides of this phenomenon, with those on the positive side securing substantial funding rounds.

Notable Startup Stories of the Week

As the week draws to a close, it’s time to assess the accomplishments and setbacks of various startups.

Noteworthy Achievements: A peer-reviewed journal highlighted the plans of German startup Proxima Fusion, lending credibility to its concept and design for a reliable and continuously operating fusion power plant.

Setbacks: Y Combinator removed its posts about the demo from YC W25 company Optifye.ai after it went viral, but not in a positive way. The startup claims to be developing “AI performance monitoring for factory workers,” but others labeled it as “sweatshops-as-a-service.”

Breakthroughs: Palo Alto-based startup Inception claims to have developed a diffusion-based large language model (DLM), which differs from existing diffusion models mainly used for creating images, videos, and audio.

Notable VC and Funding News of the Week

Several startups secured substantial funding rounds this week, while new funds are being prepared for deployment at the growth stage.

Record-Breaking Round: Israeli startup Quantum Machines secured a $170 million Series C round, one of the largest funding rounds for a quantum computing company to date, led by PSG Equity and with participation from Intel Capital and Red Dot Capital Partners.

Full Circle: Shop Circle, an e-commerce app suite, raised a $60 million Series B round, which also financed the acquisition of Aiden, an AI-powered “guided-selling” software maker.

Magic Arms: Polish startup Nomagic, which develops robotic arms for logistics operations, raised a $44 million Series B led by the European Bank for Reconstruction and Development (EBRD) and plans to use some of the funding to expand into North America.

Magic Touch: Taktile, a New York-based startup, raised a $54 million Series B led by Balderton Capital to help fintechs build automated decision-making workflows.

Idea Relay: Relay secured a $35 million Series A round to bring Asia’s “asset-free” last-mile parcel delivery model to Europe, reducing energy consumption and relying on e-bikes.

Loved: Lovable, a Swedish app-building AI platform, secured $15 million in a pre-Series A round and reached $17 million in annual recurring revenue after scaling to 30,000 paying customers with minimal spending.

European Growth: Private equity firm Thoma Bravo closed its inaugural $1.9 billion European fund to increase its presence in the region and invest in midsized software companies.

Cambridge Growth: Cambridge Innovation Capital (CIC) launched a $126 million opportunity fund to support the ecosystem around the University of Cambridge.

Finally

This week marked the third anniversary of Russia’s invasion of Ukraine, prompting a wave of innovation among Ukrainian dual-use and defense tech startups, which TechCrunch highlighted here.

Last week’s newsletter contained an error; Augury first achieved unicorn status in 2021.