Hereâs your Monday dose of The F42 Brief.
Whatâs inside Âť
đ Trending Now
The one thing thatâs making all the noise âŚ. with a bit of fact checking.
đ¸ New Funds looking to give you cash
Who has launched a new fund to invest in startups last week.
đĄInnovator Spotlight
Founders that are doing stuff differently.
đ ď¸ Tool of the Week
Something useful to up your startups velocity.
đ Note to Self
Stuff I constantly remind myself about, donât want make the same mistakes again.
đ Trending Now
No, These AI Startups Arenât Just âApplication Layerâ â Hereâs Why
Everyoneâs celebrating how âthe money is in the application layerâ, pointing at companies like Midjourney, Cursor, and Eleven Labs as proof. And sure, on the surface, they look like classic application-layer playsâconsumer-facing interfaces, slick UX, and a focus on usability.
But letâs be clear: they are not just application-layer businesses.
If they were, theyâd already be dead.
The reason these companies are scaling so fast isnât because theyâve built a flashy front-endâitâs because they own a deeper augmentation middle layer that makes them defensible. Yes, thereâs an application for the idiots who think the interface is the whole business, but under the hood, theyâre operating at a level that weak wrappers never could.
Why These Companies Arenât Just âApplicationsâ
Theyâve built proprietary expertise
Midjourney isnât just running a Stable Diffusion model and calling it a dayâitâs been fine-tuned, iterated on, and refined to create distinct artistic outputs that OpenAI or Stability AI canât replicate out of the box. Thatâs years of expertise turned into a defensible moat.They leverage user-generated data to improve continuously
Weak application-layer companies donât get better over timeâthey just exist. The winners today, like Cursor and Eleven Labs, are using every interaction as training data to refine their models, improve responses, and tailor their systems to specific use cases.Theyâve embedded themselves into workflows
If your AI tool is a nice-to-have, youâre replaceable. If itâs deeply embedded into a workflow, switching costs skyrocket. Eleven Labs isnât just a text-to-speech toolâitâs a full voice generation and management ecosystem for content creators. Once people build workflows around it, moving to another tool becomes painful.Theyâve optimised the infrastructure layer for performance
The best AI startups today arenât just calling APIsâtheyâre rewriting how those APIs interact with users. Bolt.new and Lovable arenât just wrapping OpenAI; theyâre optimising latency, fine-tuning prompts, and ensuring that their systems provide faster, more reliable outputs than a raw API call ever could.Theyâre not easily replaceable
This is the big one. A thin wrapper that just calls an API is one OpenAI update away from being obsolete. The companies winning today are those that add real augmentation, intelligence, and infrastructure that make them irreplaceable even if OpenAI changes the game.
The Bottom Line
Yes, these companies have an applicationâbut the application is just the interface. The real magic is in the augmentation, optimisation, and workflow integration happening underneath.
The people claiming âit was always the application layerâ are the same ones who thought throwing a ChatGPT UI on a website was a billion-dollar idea. They were wrong then, and theyâre wrong now.
If youâre building purely at the application layer without proprietary expertise, data loops, or deep workflow integration, youâre just another weak wrapper waiting to be replaced.
If you have not joined the Fusion42 Community on Telegram â A space for Founders, Framers, and Funders who show up to get **it done,
it is probably time to do so.
For the â¤ď¸ of Startups
đ¸ New Funds Looking to Give You Cash
This section has moved to a new publication out every Wednesday, subscribe now so you donât miss all the new early stage funds being launched.
đĄInnovator Spotlight
AI-Powered Smart Jackets & Climate Adaptive ClothingâThe Future is Here
Last year, I called itâclimate-adaptive clothing was going to be a big deal. And now, in 2025, weâre seeing the first real breakthroughs. The idea that clothing could change texture, colour, or insulation based on the environment isnât sci-fi anymore. Itâs happening, and companies are racing to take the lead.
Take the latest innovation from Jeanne Tan and her team at The Hong Kong Polytechnic Universityâan AI-powered smart jacket designed to stop overheating before it happens. This isnât your average high-tech coat. Itâs built with silver-coated yarn for heat generation and thermochromic yarns that shift colour based on temperature. And with an AI-powered temperature control system, it adjusts dynamically to keep you comfortableâwhether youâre braving the cold or dealing with unexpected warmth.
But itâs not just in labs anymore. Fast fashion brands are jumping on climate-adaptive clothing, bringing AI-enhanced fabrics to the mainstream. Weâre talking about jackets, shirts, and even business suits that adapt to their surroundings. Some adjust breathability in real time, others respond to humidity and air quality, and the smartest ones personalise their settings for each wearer.
And, naturally, the VCs are moving fast. The Patagonia vest crowd is already swapping their fleece for smart fabrics that do more than just look goodâthey actually respond to the world around them. A jacket that shifts from breathable mesh indoors to a warm insulator outdoors? Thatâs the new power move.
For me, this is bigger than just another fashion trend. Itâs the start of a shift towards truly functional, sustainable clothingâless waste, fewer unnecessary purchases, and clothes that last longer because they adapt.
The big question now? Whoâs going to dominate this space? Right now, itâs researchers and niche innovators, but I expect the first major consumer brand to crack this will completely reshape the market.
One thingâs certainâthis is only the beginning.
đ ď¸ Tools of the Week.
The Future of AI in Marketing and GTM â Startups You Should Be Watching
AI is taking over marketing and go-to-market (GTM) strategies, but not in the way the big tech names would have you believe. The real innovation is coming from smaller, agile startups that are doing things differentlyâfaster, smarter, and more personalised than ever.
I've been keeping an eye on some of the most exciting companies pushing AI into marketing and sales, and these are the ones that stand out.
AI Startups Changing the Marketing Game
Coframe â AI that Continuously Optimises Your Website
Imagine if your website could tweak itself in real time to boost engagementâwithout you lifting a finger. That's exactly what Coframe does. It uses generative AI to adjust website text, visuals, and even code to maximise conversions. Theyâve already seen a 42% improvement in click-through rates on marketing campaigns. Thatâs not a minor tweakâitâs a complete rethink of how businesses can approach web optimisation.
Dreamwell AI â Automating Influencer Marketing
Influencer marketing is still a messâfinding the right people, negotiating, tracking results⌠it's all manual and inefficient. Dreamwell AI wants to change that. Their AI automates up to 90% of the influencer marketing workflow, predicting campaign performance and even handling outreach. For brands looking to scale partnerships without drowning in admin, this is a game-changer.
Typeface â AI That Builds Entire Marketing Campaigns
Most AI marketing tools help you write better copy. Typeface takes it further. Their AI, called Arc, orchestrates entire marketing campaignsâemail sequences, social posts, SMS, everythingâusing multiple AI models that adapt to customer behaviour. Itâs not just assisting marketers; itâs replacing the need for a traditional marketing team in some cases.
AI Startups Transforming GTM Strategies
Caleida â AI-Powered Sales and Marketing Agents
Caleida is coming out of Spain with some serious backing to develop AI-powered GTM strategies. Theyâre building intelligent sales and marketing agents that work across industries like automotive, real estate, and financeâmarkets that have been slow to embrace AI but are now playing catch-up.
Supernatural AI â AI That Runs Ad Campaigns for You
Ad campaigns are still painfully manual. Supernatural AIâs Supercharger platform integrates AI models and market data to automate entire advertising campaigns. This isnât just about tweaking keywords; itâs AI running the show, making real-time adjustments and optimisations at scale.
Unusual â Personalised Website Experiences for Every Visitor
Another Y Combinator-backed startup, Unusual, is using AI to tailor websites for each individual visitor. Instead of a one-size-fits-all landing page, the site adapts based on where the user came fromâwhether thatâs an ad, an email, or LinkedIn. Itâs conversion rate optimisation on steroids.
Why This Matters
AI in marketing and GTM isnât about incremental improvements anymoreâitâs about fundamental shifts in how we engage, sell, and scale. These startups are proving that AI isnât just an assistant; itâs the new strategic brain behind revenue growth.
If youâre in marketing, sales, or growth and still relying on traditional tools, nowâs the time to start paying attention. These AI-powered startups are reshaping the playbook.
đĄ Join Our AI Startup Calls
We run bi-weekly calls on AI for startups, diving into the latest trends, workshopping real "how-toâs," and exploring cutting-edge tools. Whether youâre looking to stay ahead of the curve or get hands-on with the latest innovations, these sessions are built for you. Donât miss outâbe part of the conversation shaping the future of AI.
đ Note to Self
Thank you for reading. If you liked it, share it with your friends, colleagues and everyone interested in the startup Investor ecosystem.
If you've got suggestions, an article, research, your tech stack, or a job listing you want featured, just let me know! I'm keen to include it in the upcoming edition.
Please let me know what you think of it, love a feedback loop đđź
đ Get a different job.
Subscribe below and follow me on LinkedIn or Twitter to never miss an update.Â
For the â¤ď¸ of startups
âđź & đ
Derek