Gm. Close readers of Homescreen’s Fresh Powder section know that yesterday our parent company, Launch House, announced a $10 million venture fund called House Capital (yes, we love naming stuff after houses).

One quick ask: We’ll be posting a behind-the-scenes look into what it's like to run a venture fund on the House Capital Twitter account, so make sure to toss it a follow if that sounds interesting.

FRESH POWDER

Looking at three funds that recently topped up their coffers.

ECONOMY

Adding some context to this recession

Are we in a recession? According to data released yesterday by the Commerce Department, the answer is yes.

• Annualized GDP growth fell 0.9% in the second quarter, following a 1.6% contraction in the first three months of the year.

• Two months of contractions in a row = recession.

But the R-word is a blanket term. So let's dig into how it’s affecting parts of the economy that we care about at Homescreen: Big tech, crypto, and startups.

Big Tech

Five companies—Alphabet, Apple, Amazon, Microsoft, and Meta—reported earnings in the past week. The major themes were 1) the cloud continues to be a massive money maker and 2) advertising revenue is slowing. Alphabet, Amazon, Microsoft, and Amazon all reported more than 20% growth in their cloud storage businesses, but ad-reliant Meta and Snap both struggled. Meta actually reported its first-ever quarter of revenue contraction since going public.

The takeaway: The ad market appears to be stalling a bit, but other revenue streams are as healthy as ever.

Crypto

This is the first crypto winter that has coincided with an economic downturn. Back in 2014, it was the fall of Mt. Gox that shook the industry to its core. Same with 2018 and the out-of-control ICO market. But now, people are pulling money out of risker assets like crypto because of the broader macroeconomic slowdown. Couple that with the bankruptcies of 3AC, Voyager, and Celsius, and there’s no doubt that this recessionary period is hitting crypto the hardest.

The takeaway: If crypto can recover from all it’s had to weather in recent months, it will be the strongest signal yet that the industry is here to stay.

Startups

The startup market is giving off conflicting signals. Funds have more dry powder at their disposal than at any time in history. But the IPO market is completely stagnant with only 6% of the exit volume as last year. It’s an awkward time for many startups: they are running out of cash, but can’t get it from tight-fisted funds that don’t want to invest at the outlandish valuations created during the funding boom of 2020.

The takeaway: Startups never truly enter a bear market. Airbnb, WhatsApp, Uber, and other companies founded during the last downturn are proof that great founders will continue to build regardless of what's going on at a macro level.

SCIENCE

AI reads nature's mind

DeepMind, Alphabet’s AI affiliate, announced yesterday that its AlphaFold tool has mapped the structures of close to all proteins known to science. Protein structures, which affect every aspect of life from human health to bacteria, have long been considered one of the “grand challenges” of biology.

AI finally conquered it

While text-to-image AI’s like DALL-E 2 have been grabbing all the headlines recently, AlphaFold’s protein database is “probably the most major contribution from the AI community to the scientific community ever,” Jian Peng, a CS and computational biology professor at Illinois told the MIT Tech Review.

• Understanding how proteins are shaped can help scientists better understand diseases and potential drug solutions.

• AlphaFold has already paid dividends: since 2020 researchers have used it to understand proteins that impact the health of honeybees and develop a malaria vaccine.

Looking ahead…never one to lose out on a potential new revenue stream, Alphabet has also launched a company called Isomorphic Labs that will use its AI tech to discover new drugs.

QUICK HITS

Seed Round

Stat: Saudi Arabia has unveiled a design for a 100-mile long, 200-meter wide mirrored vertical city in the desert. Named “The Line”, it will be car-free, run on 100% renewable energy, and sources say that Jonny Cash plays every time you walk the city. Robot maids, flying taxis, and a giant artificial moon are other features shown by the Saudi Government in a slick marketing video released earlier this week. The Line is part of a broader development project headed by Crown Prince Mohamed bin Salman and is expected to cost in the $500 billion range.

Story we’re watching: Jack Ma, the Chinese billionaire who founded Alibaba, is reportedly set to give up control of the Chinese fintech Ant Group after coming under pressure from the Chinese government. It’s a shocking turn of events for Ant Group which was mulling over an IPO just two years ago that would have been the biggest ever. But Beijing cracked down, Ma even went missing for a spell, and now he is set to step away from the company he founded. Life comes at you fast when you run a major tech company in China.

Rabbit hole: The wonderful world of necrobotics (The Verge).

WHAT ELSE IS GOING ON

• JetBlue has agreed to purchase Spirit Airlines for $3.8 billion after a merger with Frontier failed to materialize.

• Gmail rolled out its biggest design update in years to all its users.

• Snap is launching a creator fund to support independent artists with ​​up to $100,000 in grants each month.

• Juul’s valuation was slashed 70% yesterday to $1.3 billion by its owner Altria following the FDA’s ban on e-cigarettes.

GUESSTIMATE

The Federal Reserve hiked interest rates once again by 0.75 percentage points to fight inflation.

The increase puts interest rates at their highest level since:

a. 1935

b. 1986

c. 2009

d. 2018

FUNDRAISING FRIDAY

This thread is 24 karat gold for anyone who is raising.

LAYOFFS TRACKER

Notable layoffs this week:

Rivian: 840 people (6%)

Vox Media: 39 people (2%)

FOUNDERS CORNER

The best resources we came across this week that will help you become a better founder, builder, or investor.

🧑‍💻 How to write React from someone with 8 years of experience

️⛳️ 10 top resources from Y Combinator’s startup library

🗣 7 sales copy sentences to close more deals

GUESSTIMATE ANSWER

It was in December 2018.