Charlie Javice, the founder of student loan application startup Frank that was purchased by JPMorgan for $175 million, was found guilty on Friday of defrauding the bank by greatly inflating the customer count.
After a five-week trial, the jury found Javice guilty, agreeing with prosecutors’ claims that she fabricated the vast majority of Frank’s customer list to deceive JPMorgan into acquiring her startup.
When JPMorgan bought Frank in 2021, the bank thought the startup had 4 million customers. The bank found out that the actual customer count was only 300,000 when it later sent test marketing emails to alleged Frank users and approximately 70% of those messages bounced back.
Javice allegedly hired a math professor to create fake customer data, which she submitted to JPMorgan when the bank was considering buying her company.
Defense attorneys argued that the suit was a result of buyer’s remorse due to a government change in the way financial aid forms are filled out. Javice pleaded not guilty and didn’t take the stand during the trial.
Javice, who is now 32, could be sentenced up to decades in prison. The sentencing is expected to take place in August, according to a CNBC report.
Javice founded Frank in 2017 when she was in her mid-20s. In 2019, she was named to the Forbes 30 Under 30 list.
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Welcome to Startups Weekly — your weekly recap of everything you can’t miss from the world of startups. Want it in your inbox every Friday? Sign up here.
This week reminded us that creative accounting doesn’t only happen in Hollywood. Some hopes were dashed, but startups are delivering on all sorts of promises, from nuclear reactors to small EVs.
The startup news this week was very much a mixed bag, with one public exit finalized and another delayed and a flurry of other developments, both promising and disappointing.
Churn concerns: TechCrunch learned that several companies with logos on 11x’s website were not actual customers of the a16z- and Benchmark-backed startup. Sources also said used 11x used creative ways to calculate annual recurring revenue.
Further delays: Cerebras Systems saw its IPO delayed again. The AI chipmaker filed to go public in 2024, but its national security review has been dragging on.
Nuclear: Terrestrial Energy, a U.S. nuclear startup that develops small modular reactors, went public via SPAC and is expecting to net $280 million. Meanwhile, Bill Gates-backed Commonwealth Fusion Systems hit a key milestone to construct its demonstration reactor.
Not enough: Vertical farming company Plenty filed for bankruptcy after raising nearly $1 billion in funding from investors, including SoftBank Investment Advisers, Walmart, Bezos Expeditions, and Jeff Bezos as an angel investor.
Layoffs: Block, the fintech startup co-founded by Jack Dorsey, laid off 931 people, according to a leaked email. The company, which owns Cash App and Square, already conducted layoffs in 2024.
Rumors: Nvidia is reportedly nearing a deal to acquire Lepton AI, a startup that rents out servers powered by its AI chips. And FuriosaAI, a South Korean startup that makes chips for AI applications, is said to have rejected an $800 million acquisition offer from Meta.
From pre-seed to a Series E, here are some rounds that caught our attention this week. Plus, some fresh funding for VCs to invest in new deals.
Hot thermometer: Digital banking startup Mercury raised $300 million in primary and secondary funding, including a Series C led by Sequoia. This also more than doubled its valuation to $3.5 billion post-money.
Valuation bump: Island, a company that makes enterprise browsers, secured $250 million in a Series E led by Coatue that valued the Dallas-based startup at $4.85 billion — a significant valuation bump less than one year after its previous round.
Also: Rivian spun out a new micromobility startup called Also, which already received $105 million from Eclipse Ventures. Its goal is to build small EVs, with a flagship product going into production next year for consumers in the U.S. and Europe.
Automated: Fast-growing Berlin-based workflow automation startup n8n raised $60 million in a round of funding led by Highland Europe, with HV Capital and previous investors Sequoia, Felicis, and Harpoon also participating. Sources said the valuation was close to $270 million.
Ramp for LatAm: Mexico City-based YC alum Mendel raised a $35 million Series B and expects its business to reach profitability by late 2025.
Rugs to riches: Arcade, a generative AI marketplace for designing jewelry, simultaneously announced its $25 million Series A funding round and its expansion to home goods, starting with rugs.
No free labor: Former Outreach CEO Manny Medina launched Paid, a new startup that has already raised $11 million in pre-seed funding to make sure AI agents get paid.
More AI: San Mateo, California-based Emergence Capital closed a $1 billion seventh fund to back B2B companies, with a keen interest in AI.
Blue checks: French VC firm Daphni announced the first closing of its third fund, Daphni Blue, with around $215 million secured out of its overall $270 million target.
Beyond voice: Amazon’s Alexa Fund expanded its scope beyond voice startups, with a broader focus on AI investments.
A new report showcased the world’s 20 hottest open source startups. You can find the full listing and more details here. As you may have guessed, more than half of these have AI at their core.
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Lucid Motors plans to resume customer deliveries for its new all-electric Gravity SUV at the end of April. Getting the Gravity into customer hands is a big milestone for Lucid, whose success will hinge on being able to offer vehicle types popular with American drivers.
The Gravity is Lucid’s second vehicle and its first SUV after the Lucid Air sedan series. Lucid opened up orders for the seven-seater SUV in November 2024 and began first deliveries to employees, friends, and family in December.
“We nearly finished building all the vehicles that we wanted to build to put them into our studio and for test drives,” Marc Winterhoff, interim CEO of Lucid, said Thursday evening at a brand activation event in New York City. “And by the end of April, we will resume customer deliveries of the Gravity.”
Lucid employees who spoke to TechCrunch at the event — which featured a surprise mini performance from Cautious Clay — confirmed that the EV maker is busy ramping up Gravity production at its Casa Grande, Arizona factory. Barring any hiccups, that U.S.-based factory will no doubt be a boon for the EV startup amid President Donald Trump’s new 25% auto tariffs.
The $94,900 Gravity has an official EPA range estimate of 450 miles and the performance of a sports car, which the company attributes to its advanced battery technology that allows for a denser, lighter-weight battery that packs a punch.
“With the Lucid Gravity, you don’t have to compromise. You can have it all,” Winterhoff said.
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When British doctor Ahmed Kerwan began working as a physician, the paperwork burden shocked him. On some days, he would spend only three hours actually caring for patients, with the rest of his workday spent on things like dealing with insurance claims.
There are already dozens, perhaps hundreds, of startups using AI to reduce the notoriously complex admin burden in healthcare. From note-taking specialists like Abridge to AI assistants startup Ambience, these startups are racing to streamline efficiencies. Kerwan, now an entrepreneur, is the founder and CEO of one of such company called Taxo. His startup offers an app that doctors and others use for tasks like getting prior authorizations from insurers, patient intake, and medical billing.
What sets Taxo apart, Kerwan says, is its AI “reasoning engine,” which transparently explains the process behind its decisions to users, helping it build trust with doctors. Reasoning models went mainstream in the AI world late last year by fleshing out their logic openly to users. At Taxo, the tech helps reduce hallucinations while increasing prior authorization approval rates to 98%, compared to an industry average of about 80%, according to Kerwan.
Taxo built its ‘reasoning engine’ by adding a healthcare-specific layer on top of existing models like OpenAI’s and Anthropic’s. It says the system is trained on hard-to-access healthcare data that makes it difficult for others to scrape overnight. “We didn’t want to be steamrolled every time OpenAI launches a new model,” Kerwan told TechCrunch.
The reasoning trend in AI remains early and only really gained traction with the rise of Chinese startup DeepSeek. Investor interest in Taxo, however, suggests there’s a chance for the technique to gain broader adoption beyond foundational AI companies. The startup recently closed a $5 million seed round led by Y Combinator, General Catalyst, and Character Capital.
Founded last year and based in San Francisco, Taxo tells TechCrunch it passed $1 million ARR six months after its launch. It now serves about 15 customers, ranging from clinics to government providers.
When ChatGPT was released, doctors were understandably cautious about using it because they couldn’t trace why and how it was making specific recommendations, Kerwan told TechCrunch. He’s hoping Taxo changes that. “You can see exactly where we got the information and why it’s being given,” he said.
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Krafton, South Korea’s gaming giant known for titles including PUBG: Battlegrounds and Battlegrounds Mobile India (BGMI), has acquired a controlling stake in 12-year-old Indian gaming studio Nautilus Mobile for $14 million in an all-cash deal.
On Friday, the South Korean gaming company confirmed to TechCrunch that it has acquired a “north of 75% stake” in Nautilus, the gaming studio popular for its cricket enthusiast-focused Real Cricket franchise.
The Pune-based studio will continue to operate independently after the deal, which is expected to close by the end of the month, with all its 45 employees remaining on Nautilus’s payroll, Krafton told TechCrunch.
Founded in 2013, Nautilus has garnered millions of downloads for its Real Cricket franchise, which currently has five titles, including Real Cricket 24 and Real Cricket Premier League.
Krafton aims to strengthen Nautilus’s “core competence” in mobile cricket games — where demand is high in cricket-loving India — by refining its existing titles in the short term and exploring new genres in the long term, Sean Hyunil Sohn, CEO at Krafton India, said in an interview.
“Our development capability in Nautilus will help Krafton double down on its India gaming strategy, and together, we can probably build more games, more genres, both for the Indian market and global market going forward,” Nautilus CEO Anuj Mankar told TechCrunch.
The company plans to expand Nautilus’ presence to other geographies over time.
India’s mobile gaming market is growing steadily, driven by a large base of young smartphone users. Mobile games dominate the country’s overall gaming industry by spending, accounting for 77.9% of total revenue, per market intelligence firm Niko Partners. The firm also estimates that the country’s mobile gaming revenue will grow from $640 million in 2023 to $1.1 billion by 2028.
Krafton, which saw 119.3% year-over-year growth in its net profit last year to roughly $889 million (KRW 1.3 trillion), sees India as a promising and key market to continue its success. However, most of the growth from India has so far come from its flagship title for the local audience, Battlegrounds Mobile India (BGMI), which hit its highest-ever sales last year and surpassed 200 million downloads.
The company has other titles, including Bullet Echo India, Road To Valor, and CookieRun. However, they have not yet helped repeat the success story of the battle royale game, a localized version of PUBG.
The deal could help Krafton move beyond BGMI and explore new avenues of success, including cricket and other sports games, to attract new gamers.
In 2020, Indian digital entertainment and technology company JetSynthesys acquired a 100% stake in Nautilus Mobile. That was followed by Krafton’s strategic investment of $5.4 million in 2022.
Sohn told TechCrunch that while Nautilus’ potential was the reason for the initial investment, Krafton found its role as a minority stakeholder limiting in terms of supporting the studio’s content development. Gaining a controlling stake, he said, would allow for deeper collaboration and greater involvement in core development efforts with Nautilus.
“We strongly believe that cricket games have a lot of potential. And we want to work with Nautilus to make the best effort possible to really realize the potential of this market, not just in India, but in other cricket-playing nations and other countries, which are becoming more active in cricket,” said Nihansh Bhat, corporate lead development at Krafton India, told TechCrunch.
JetSynthesys will remain a “significant minority” investor in Nautilus Mobile and will continue to work with the studio on areas, including eSports. The company has already worked with the studio to help partner its Real Cricket game with cricket teams, including those associated with the Indian Premier League, the world’s most lucrative cricket tournament in India.
“We will, over a long period of time, want to look at, of course, increased revenue, increased user base, improved retention, all the usual things, and hopefully new deals as well,” Bhat said on the question of how Krafton would measure the deal’s success post its completion.
Until now, Krafton has invested over $200 million in India, excluding the Nautilus Mobile.
Krafton’s 20% investments in India have been in gaming and gaming-adjacent companies, though the company also invested in Indian startups, including the payments platform Cashfree, audio platform Kuku FM, and influencer marketing platform One Impression. It also backed funds, including gaming-focused Lumikai and IMM Investment’s first India fund.
“We are looking at the opportunity for acquisitions, moderate investments, and even business collaboration with notable players in the country,” Sohn said.
Nautilus will join the 14 other game studios Krafton operates in markets around the world.
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Certification platform Certiverse raised an $11 million Series A led by Cherryrock Capital, it announced this week.
The company was founded by Ruben Garcia, Pablo Meyer, and Federico Lopez in 2023. It lets organizations develop certification exams at, its founders say, far less cost than traditional methods.
Certifications are an age-old method to gain technical skills to boost job prospects, as well as gain mastery over a particular subject.
The company says it works with a range of companies, from the technology nonprofit The Linux Foundation to the software company HashiCorp.
CEO Garcia is not new to the certification industry. He previously co-founded (and sold) Innovative Exams, a testing-service company that also provided exam delivery services.
Becoming certified can be “life changing events for leaders and professionals,” he said, but added that it can cost a company as much as $150,000 to develop certification programs and exams.
“Our clients have developed up to 10 in one year on our platform for less than $10,000 per exam,” he continued.
He added that it usually takes about a year to create an exam using legacy providers (such as Pearson, Vue, and Prometric).
“Our business model is aligned with our clients’ interests and we generate the majority of the revenue once their exams are launched and professionals are taking them,” Garcia continued.
He used the word “focused” to describe his fundraising efforts. Certiverse started fundraising in early January, pitching to around 50 firms over the course of 45 days.
“I stayed focused on the outcome,” Garcia said. “Find the right investors, quickly, who believe in the vision and can help us scale from here.”
He met the Cherryrock team through one of his existing investors. Chingona Ventures, Hyde Park Venture Partners, and Zeal Capital Partners also participated in the round. Certiverse has raised a little more than $16 million in total to date, the company told us.
Garcia said the fresh capital will be used to add more automation to the platform, making it easier for anyone to create exams.
“Our goal is to focus on scale and build out the platform to launch 1,000 new clients and partners on Certiverse,” he said.
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