Deal of the Week

The Ukraine and Iran wars have underlined two things—both concerning drones. (i) drones can be cheap, effective, and easy to mass-produce compared to expensive, top-of-the-line weaponry; (ii) the US does not have the best domestic supply chain in place to build them.

The Department of Defense has announced plans to spend $1B over the next couple of years to buy 300,000 drones by 2027. In the coming years, we are set to see all manner of drone startups—from Berkeley-founded and friend of the newsletter Aurelius Systems (Michael LaFramboise), a counter-drone directed energy company, to companies focused on bringing drone manufacturing back to the US.

Our deal of the week, Skydio, has been doing exactly this for years and have been building full stack drone systems in the USA (interestingly China sanctioned them in 2024) has announced a $110M round alongside a $3.5B commitment to US drone manufacturing.

History suggests we are in the generalist era of AI.

Early in every major technological cycle, the generalist dominates early knowledge expansion.

During the Renaissance era, Leonardo da Vinci was a painter, engineer, theorist, scientist, and architect.

In the Industrial Revolution, Thomas Edison was an engineer, businessman, and operator.

Even in early computing, Steve Jobs was product, engineering, and distribution.

This happens over and over again: new technology --> low barriers --> generalists win.

Over time, industry matures --> complexity increases --> specialists win.

For AI, the tools are still primitive, not quite defined, and constantly shifting. This favors those who can adapt and experiment across a range. So now is once again the time of the generalist who can achieve huge leverage on the tools available.

The big question is: is the paradigm shift with AI so big that generalists can continue to dominate as AI allows you to learn so fast? Will the future be decided by action-orientated generalists, or will history repeat and specialists rise again?

The future is unclear, but what’s certain, is generalists should make hay while the sun shines because it may not forever.

Time to Double Down on GTM?

I was ejected from the biggest club night in Edinburgh during my first week of undergrad, so I started my own. It became one of the biggest in the city, doing massive events with artists like Kygo.

I realised two things:

1.⁠ ⁠During platform shifts the price of distribution is often misspriced, creating lower customer acquisition costs. 
At the time (2011), Facebook had taken off but hadn’t figured out monetization or anti-bot rules. By inviting people to events, promoting them through well followed pages, and liking posts with dummy profiles I created massive reach for almost no cost. This let me win customers for nothing, keeping all the profit.

2.⁠ ⁠Network effects.
I asked everyone I knew who they knew going to Edinburgh, cold-emailed them, and offered free entry if they helped promote the night. Each new promoter pulled in their own network.

Right now, looking at the growth of consumer companies, it seems like Meta has become too cheap again due to how effective AI targeting is. This has allowed insane growth such as Grüns who hit $300M+ revenue in two years and sold to Unilever for ~$1.2B.

Consumer companies should be quadrupling down on AI-driven targeting on Meta and TikTok before competition increases and the prices rise accordingly.

At times like this, huge companies are created — but the window is short. Eventually marketing costs catch up, the arbitrage disappears, and many of the companies built on it disappear too if the product is easy to replicate.

See our first ever event poster that ended up pulling everyone from the club that kicked me out.

Quick Takes

Berkeley is not just top of the pops for AI, Robotics and Entrepreneurship

Garry Tan of Y Combinator weighs in on ARR debate we discussed last week

Great interview with the Berkeley founder of AppLovin (market cap of $160B+ and $5.5B of revenue). Most impressively they do $10M of EBITDA per employee

💡 Got any ideas or feedback on how to improve this weekly digest? Just hit reply.

🧠 Neurona Therapeutics. $650M M&A 🇺🇸 Regenerative cell therapy. 💰 UCB

🐻 Corey Nicholas, Co-Founder & CEO. BA Neurobiology Article

🤖 Recursive Superintelligence. $500M Series A 🇺🇸 Stealth AI research lab. 💰 GV, NVIDIA, 

🐻 Josh Tobin, Co-Founder. PhD EECS Article

🚁 Skydio. $110.0M Series F 🇺🇸 Autonomous drone technology. 💰 Accel, Andreessen Horowitz, Playground Global

🐻 Abraham Bachrach, Co-Founder & CTO. BS EECS Article

🍽️ Swoop. $7.3M Seed 🇳🇬 Food delivery platform. 💰 Long Journey Ventures, Version One Ventures, Dune Ventures

🐻 Aubrey Niederhoffer, Founder & CEO. BS Global Management Article

🏥 JRNYS. $7.2M 🇺🇸 Telemedicine treatment platform. 💰 Afterburner Capital, Capital Factory, Fourward Ventures

🐻 Henry Legere, Founder & Chief Medical Officer. BA Chemistry Article

⛽ ResFrac. Later Stage 🇺🇸 Fracturing simulation software. 💰 Altira Group, Banneker Partners

🐻 Charles Kang, Co-Founder & CTO. BS Physics Article

💧 Cyclopure. Later Stage 🇺🇸 Water purification services. 💰 Cornell University, Kurita Water Industries, National Science Foundation

🐻 Frank Cassou, CEO & Founder. BS Econ & JD Law Article

Our goal is to document the startup ecosystem of Berkeley-founded companies. Please share this newsletter with any Cal Bears in your network so we can crowdsource information about all investment rounds and job opportunities.

Built By Berkeley is not affiliated with UC Berkeley, but maybe we will be one day if we get enough subscribers….

Built By Berkeley, where we announce all the funding rounds by Berkeley-founded companies. This is a community effort, so please let us know if we missed a company here. 🐻