Shrinking teams, warped views, and risk aversion in this week's startup news

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This week once again proved that the startup world isn't homogeneous when it comes to risk-taking. Let's have a look.

Most interesting startup stories from the week

Layoffs after an acquisition or controversy after a risky decision aren't exactly a surprise, but there is more encouraging news on the innovation front.

Shrinking teams: Italy-based app company Bending Spoons is planning to lay off 75% of the staff of WeTransfer, the Dutch file transfer startup it bought in July. This follows earlier job cuts at other companies it acquired: Evernote, Filmic, and Meetup.

Warped views: Warp, a YC alum payroll startup, found itself embroiled in controversy and ultimately disavowing one of its affiliate accounts on X, where it seemed to have been following an unusual — and risky — marketing strategy.

Level-headed: Sydney-based Neurode developed a headband that uses light electrical stimulation in the prefrontal cortex to treat ADHD symptoms such as lack of focus. Currently in private beta, the company hopes its wearable will become an FDA-approved medical device.

Most interesting fundraises this week

The market is how it is, but fundraising is still happening — even if in some cases, it's actually a mix of equity and debt.

Fauxmage: Berlin-based food tech startup Formo raised a $61 million Series B round to keep scaling production of its dairy-free cheese.

Less paper: Frankfurt-based startup Qualifyze raised a $54 million Series B round that it will use to grow, specifically in the U.S., and add more analytics and AI to its products, which help pharmaceutical companies control their supply chains.

Insurtech: Neat, a Paris-based embedded insurance startup, raised €50 million in debt and equity funding. The Series A round is led by Hedosophia.

Smart cat: Smartcat, a vendor of automated translation tools geared toward enterprises, raised a $43 million Series C led by Left Lane Capital. This will help the startup grow its team and invest in its product, marketing, and sales.

One more round: Finally, a Miami-based AI-enabled bookkeeping, accounting, and finance startup targeting SMBs raised a $50 million Series B round of funding and secured a $150 million credit line.

Most interesting VC and fund news this week

Optionality: London-based VC firm Atomico raised $1.24 billion across two funds. One, Atomico Venture VI, will mostly invest in Series A rounds; the other, Atomico Growth VI, will be for Series B through pre-IPO — and, presumably, for more risk-averse limited partners.

Follow-on: Alpha Partners announced a $153 million third fund that will double down on what was once a novel idea — helping seed investors exercise pro rata rights in later rounds by writing $5 million to $10 million checks alongside them.

Last but not least

The U.S. is a more fragmented legal environment than it may seem. Startups are learning this the hard way, as some of them are getting fined, and sometimes banned, by individual states. As TechCrunch's Rebecca Szkutak noted, "the upshot is that state-level regulations need to be factored into a founder’s business plans as soon as feasible, be it through investing in compliance software or through hiring legal experts."