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In today’s newsletter: 

• Third Wave Coffee brews bitter layoffs
• Bhavish Aggarwal’s Krutrim joins the AI race
• Revenue concerns keep startup founders up at night

Event alert: CNBC TV18 & Moneycontrol will be hosting the most definitive summit on Artificial Intelligence with top global and Indian voices tomorrow in Bengaluru. Can’t make it? Catch the live stream here. 

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Bengaluru's favourite hangout, a haven for founders, dealmakers, and friends, has become a less-than-ideal workplace for its own employees.

Nikhil Kamath-backed Third Wave Coffee has laid off 100-120 employees, employees told us late last night. 

• The company began the layoffs on Wednesday and the process is ongoing, so the final number could be even higher

• Employees were informed that their roles no longer fit within the restructured company, but no further details were given

Third Wave's decision, to sack employees, was a surprise, particularly given that it had just raised around Rs 290 crore ($35 million) three months ago and was valued at around $150 million.

“Layoffs have been going on for the past two days and there is going to be another round on December 15. The best part? No one knows what a restructured organisation means. I thought we were doing well as a company,” an employee told us.

Employees across divisions like tech, marketing, finance, business development were let go. 

• Even senior leaders were impacted by the decision, a few have already said they’re ‘open to work’ on LinkedIn
  
  
• Affected employees lost access to their mailbox and were offered two months’ pay to leave immediately

Find out more

India should build its own AI that can understand the country's unique cultural context, says Ola co-founder Bhavish Aggarwal as he unveiled the ambitions of his latest venture Krutrim today. 

Krutrim, meaning "artificial" in Sanskrit, unveiled its first family of foundational AI models.

• It will come in two sizes:  a base Krutrim model available now, and a more powerful multimodal Krutrim Pro arriving in Q4-FY24

Krutrim will power a namesake conversational assistant, similar to ChatGPT, that will understand 22 Indian languages and generate text in 10. The AI models, according to the company, already outperform OpenAI's GPT-4 in Indic language performance.

"With an India-first cost structure, Krutrim will have the largest representation of Indian data, enabling us to create novel models beyond LLMs across sectors," Aggarwal said.

The new AI model is a key to Krutrim's plan to build a comprehensive AI computing stack. 

• The company is working on AI infrastructure to develop indigenous data centers and eventually, server-computing, edge-computing and super-computers

• Krutrim will also build its own silicon and design its own chips, Aggarwal said

Krutrim will operate as a separate company within the Ola Group, similar to the IPO-bound Ola Electric and its cab business. 

• The company does not use data from these businesses to train its AI models, Aggarwal’s said

Krutrim opens for sign-ups today, with public release slated for January 2024. Developer APIs will follow in February 2024.

• Ola plans to integrate Krutrim across its group companies by March 2024, leveraging the technology for sales, service, support, and other key processes

Find out more

Even as tech investors in India steer away from growth-first startups and push portfolio companies to chase profitability, revenue growth concerns continue to haunt founders.

Among the 250 startup founders surveyed by Elevation Capital, 65% identified revenue growth as their biggest concern, even exceeding worries about cash burn and fundraising.

• B2C founders, in particular, expressed concerns about cash burn, secondary only to revenue growth

• For B2B SaaS founders, the primary challenge lies in longer and tougher sales cycles

• Majority of fintech founders are concerned about the regulatory environment

Despite monthly funding to Indian startups hitting a 6-year low in November, 50% of surveyed founders expect fundraising to become easier in 2024.

• This comes amidst a recent uptick in the past two weeks, suggesting a potential shift in the funding landscape

However, founders are prioritising profitability in the current climate, and suggest a cash runway of at least 18 months to weather the storm.

A majority of surveyed founders, the report revealed, have successfully reduced their burn rate by at least 30%. 

• Among those who managed to bring down their burn in the past year, 38% identified marketing as the primary area where spending cuts were made

Go deeper

• Karnataka's Deputy Chief Minister DK Shivakumar announced the state government's intention to employ AI for traffic management and crime prevention in Bengaluru.
  
  
• US regulators warn of potential financial system risks from rapid AI adoption without proper supervision, calling for both industry and regulatory vigilance.

Embark on a laughter-filled journey with Kevin Hart & Chris Rock: Headliners Only, a captivating documentary directed by Rashidi Harper. 

• The documentary delves into the dynamic careers and enduring friendship of comedy legends Kevin Hart and Chris Rock. Watch it on Netflix

And if you're still craving more chuckles, check out Asteroid City. Directed by Wes Anderson, this star-studded comedy features Tom Hanks, Willem Dafoe, Scarlett Johansson, and Margot Robbie in lead roles. Stream it on Amazon Prime Video

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