Pathfounders Newsletter: We found out how much SAP paid for Prior Labs; Join our next London event

Scarcity to Saturation: Picking Winners Amid AI Fever
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• Not a story but a quick update: This week we ran a live podcast recording with Richa Kaul, Founder & CEO of Complyance, in conversation with Pathfounders Editor Mike Butcher. This will be released next week. Ahead of the podcast, you can watch a ‘sizzle reel’ here. Ok, on with the news…

• While most people in the UK were on vacation on Monday, Pathfounders broke the story that Germany’s SAP was buying Freiburg-based Prior Labs, one of the leading startups in tabular foundation models, to push enterprise AI beyond chatbots and into the structured data that runs companies. SAP said Prior Labs would continue to operate independently, while investing more than €1 billion over four years. Exact terms of the deal were not disclosed due to regulatory reasons. However, two well-place sources told Pathfounders that this was an “almost all cash” deal, with the founders getting well over half a billion dollars in cash up front (we heard 750m in total), even before the €1 billion investment spread over time. Prior Labs had previously raised €9M in funding over one Pre-Seed round raised in February 2025 with Balderton Capital. Journalist Chris O’Brien later confirmed our story, saying he had heard that SAP had paid 700m cash upfront, with a 300m earnout. This means Balderton did a 17x exit. With 40 technical people, the team would have made around 20M a head. In other words, this was a Valley-style acquihire, with another €1bn for scaling. Welcome to the Prior Labs mafia…

• Last weekend Anthropic reportedly held early discussions with London-based chip startup Fractile about purchasing the company's inference accelerators. Anthropic already uses chips from Nvidia, Google, and Amazon. Fractile's chips (which are made in Bristol) aren’t expected arrive until 2027. Founded in 2022 by Oxford PhD Walter Goodwin (who I interviewed on video last year) Fractile’s chip co-locates memory and compute on the same die using SRAM rather than shuttling data to separate DRAM chips, removing the main bottlenecks in running large AI models at speed.

• Ethos, an AI platform matching skilled professionals to opportunities, secured a $22.75M (£16.7m) Series A round. The round was led by Andreessen Horowitz, with participation from XTX, Evantic and General Catalyst, which led the company’s seed round in 2024. Ethos employs AI to evaluate people, doing away with CVs and job applications, which are increasingly written by AI, and therefore becoming worthless. It does this by capturing voice conversations and existing portfolios of work such as academic papers, code repositories and professional content. Clients are coming from accounting, banking, consulting, law, technology and healthcare backgrounds, as well as (even!) electricians and plumbers.

• Voice AI company ElevenLabs announced new investors who joined its $500 million Series D fundraise. These included BlackRock, Wellington, D.E. Shaw, and Schroders; enterprises like Nvidia, Salesforce Ventures, Santander, KPN, and Deutsche Telekom; and individual investors such as celebrities Jamie Foxx, Eva Longoria (we always knew she had it in her), and Squid Game creator Hwang Dong-hyuk. It also claimed to have surpassed $500 million in ARR, and it’s only May. Stringing its announcements together, it looks like ElevenLabs took 20 months from launch to get to $100m ARR, 10 months to hit $200m, 5 months to hit $330m, and now 3 months to get to $500m ARR. This means it could hit 1bn ARR by the end of the year. For context, last year’s year-end figure was nearly $350 million ARR. It’s now gone from a $6.6 billion valuation last September to $11 billion this February. You can watch an interview with Co-founder and CEO (and honorary energizer bunny, as the guy seems so psyched all the time) Mati Staniszewski on CNBC here.

• UK-based Nyobolt raised a $60 million in Series C funding at a $1 billion+ valuation to expand its ultra-fast charging and high-power battery systems for autonomous robots and AI infrastructure. The round was led by Symbotic with participation from IQ Capital, Latitude, Scania Invest and CBMM. The company also reported revenue growth of five times year over year. The background to this is the rise of warehouse, and soon humanoid-style, robots, as well as data centre build-outs. Conventional battery and backup power systems have limitations. Autonomous machines operating in warehouses, hospitals and other industrial environments require continuous uptime and rapid charging cycles. Nyobolt delivers fast charging and high cycle life. “Nyobolt is enabling the always-on, always-moving infrastructure that physical AI demands,” Co-founder and CEO Sai Shivareddy noted in the announcement. His other co-founders are Clare Gray, a professor at Cambridge University, and Kent J. Griffith · 2nd Asst Prof, UC San Diego.

• QuTwo, the Finnish AI lab founded by former AMD Silo AI CEO Peter Sarlin, hit a valuation of $380 million after raising a $29 million angel round. Angel round you say?! Well, Sarlin had an answer for that: “I had a lot of investors who would have wanted to pour a lot of money into making Silo into Europe’s OpenAI, but I didn’t believe in that play.” Respect! He said QuTwo wants the freedom to think long term: “We are on a mission to build the globally leading AI company for the next paradigm, given that Europe did not succeed in building the AI company for this era.” OUCH. The company’s core product, QuTwo OS, is an orchestration layer that directs tasks to classical, quantum, or hybrid architectures, the idea being that enterprise use cases are often best served by “quantum-inspired” computing, which uses classical chips to simulate quantum behaviour, but on more reliable hardware than fragile and scarce quantum computers. The lucky angels to be picked out of the line include Yuri Milner, Xavier Niel, Nico Rosberg, Dieter Schwarz, and Niklas Zennström, as well as many startup founders from Hugging Space, Legora, Miro, Skype, Supercell, Wolt, and more.

Watch, Listen, Subscribe: YouTube, Spotify, LinkedIn, Apple

AI coding agents have made software dramatically faster to build, but that’s left product managers with a huge headache: they are becoming the new bottleneck.

That’s the bet behind rezonant, the London startup founded by former Stripe UK CTO Emma Burrows, which has just launched out of stealth after raising $6m from General Catalyst and firstminute capital.

Rezonant sits above tools like Cursor, Claude Code and GitHub Copilot, giving product teams a workspace to turn ideas into structured specs and tasks that AI agents can execute, grounded in the codebase, not scattered across Notion, Linear, Slack and Figma.

As Burrows told Pathfounders in our latest podcast:

“Coding agents have made software delivery much, much faster… but now that coding is almost the fastest bit of the whole process, that has really turned a lot of things on its head.”

Her view is that product managers need help to move as fast as AI-powered engineers, without ending up just producing bad software, faster.

So this is a new emerging startup category to watch: AI-native product management.

Expect more startups to emerge in this space. 

• ​YourStory PR and Pathfounders are bringing together founders, investors and enterprise leaders for an exclusive evening in London exploring the rise of AI-native startups: Get your tickets here!

• PLUS: Pathfounders is partnering with the new Renaissance Summit (tickets here). Exclusive Early Bird Discount to the Pathfounders community.

• PLUS: Exclusive 20% off for the Pathfounders community to WSAI in Amsterdam.

GP living abroad and fancy a side-hustle? This is the platform for you.

Cody is their AI agent for non-technical teams that lets users describe a business task in plain English, then builds and runs it.

AI has sped up engineering, leaving product managers with a headache. The former CTO of Stripe UK aims to fix the problem with her new startup.

Prior Labs is one of the leading startups in tabular foundation models

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