- Melon, a startup that was building a “brain twin” using AI, plans to shut down on March 24.
- The company had raised $1.5 million, but founder Sanne Fouquet said it “faced challenges.”
- Consumer startups like Melon have faced a tougher fundraising environment than in years past.
Melon, a startup that was building a “brain twin” for users with AI, plans to shut down on March 24, Business Insider has learned.
Founded by former Palantir engineer Sanne Fouquet, the company has been leveraging generative AI to help users save, organize, and connect information from online and social-media sources.
Users could make their lists public and allow others to follow them and discover the content they’d saved. Melon used AI and machine learning to resurface content that users had saved and help them write, brainstorm, and research based on the information the user had collected.
Fouquet told Business Insider that the company “faced challenges in gaining sufficient traction to achieve profitability or attract further investment.”
“The team has been executing flawlessly and I take full responsibility for not guiding the company towards a more successful path,” she added.
Melon had raised a £1.2 million pre-seed round (about $1.5 million) led by early-stage VC fund Peak in late 2022, and officially launched in September 2023.
Consumer startups, like Melon, have faced a tougher fundraising environment than in years past — even if they incorporate AI, the hot topic of the moment. Already in 2022, when Melon raised its pre-seed round, VC funding in startups had experienced a sharp decline, with investments dropping 35% compared to 2021.
In 2023 and early 2024, things are not looking much rosier. The Information reported in January that VCs were ‘”giving up” on betting their careers on consumer investments like social media.
MaC Venture Capital’s founding partner Marlon Nichols told BI earlier this year that it was “hard to underwrite anything on the consumer side these days just because of the lack of visibility into revenue and everything else that flows underneath that.”
