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The F42 brief #021
Here’s your Monday dose of The F42 Brief.
What’s inside »
📈 Trending Now
The one thing that’s making all the noise …. with a bit of fact checking.
💸 New Funds looking to give you cash
Who has launched a new fund to invest in startups last week.
💡Innovator Spotlight
Founders that are doing stuff differently.
🛠️ Tool of the Week
Something useful to up your startups velocity.
📌 Note to Self
Stuff I constantly remind myself about, don’t want make the same mistakes again.
📈 Trending Now
No, These AI Startups Aren’t Just “Application Layer” – Here’s Why
Everyone’s celebrating how “the money is in the application layer”, pointing at companies like Midjourney, Cursor, and Eleven Labs as proof. And sure, on the surface, they look like classic application-layer plays—consumer-facing interfaces, slick UX, and a focus on usability.
But let’s be clear: they are not just application-layer businesses.
If they were, they’d already be dead.
The reason these companies are scaling so fast isn’t because they’ve built a flashy front-end—it’s because they own a deeper augmentation middle layer that makes them defensible. Yes, there’s an application for the idiots who think the interface is the whole business, but under the hood, they’re operating at a level that weak wrappers never could.
Why These Companies Aren’t Just “Applications”
They’ve built proprietary expertise
Midjourney isn’t just running a Stable Diffusion model and calling it a day—it’s been fine-tuned, iterated on, and refined to create distinct artistic outputs that OpenAI or Stability AI can’t replicate out of the box. That’s years of expertise turned into a defensible moat.They leverage user-generated data to improve continuously
Weak application-layer companies don’t get better over time—they 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.They’ve embedded themselves into workflows
If your AI tool is a nice-to-have, you’re replaceable. If it’s deeply embedded into a workflow, switching costs skyrocket. Eleven Labs isn’t just a text-to-speech tool—it’s a full voice generation and management ecosystem for content creators. Once people build workflows around it, moving to another tool becomes painful.They’ve optimised the infrastructure layer for performance
The best AI startups today aren’t just calling APIs—they’re rewriting how those APIs interact with users. Bolt.new and Lovable aren’t just wrapping OpenAI; they’re optimising latency, fine-tuning prompts, and ensuring that their systems provide faster, more reliable outputs than a raw API call ever could.They’re 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 application—but the application is just the interface. The real magic is in the augmentation, optimisation, and workflow integration happening underneath.
The people claiming “it was always the application layer” are the same ones who thought throwing a ChatGPT UI on a website was a billion-dollar idea. They were wrong then, and they’re wrong now.
If you’re building purely at the application layer without proprietary expertise, data loops, or deep workflow integration, you’re just another weak wrapper waiting to be replaced.
If you have not joined the Fusion42 Community on Telegram — A space for Founders, Framers, and Funders who show up to get **it done,
it is probably time to do so.
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💡Innovator Spotlight
AI-Powered Smart Jackets & Climate Adaptive Clothing—The Future is Here
Last year, I called it—climate-adaptive clothing was going to be a big deal. And now, in 2025, we’re seeing the first real breakthroughs. The idea that clothing could change texture, colour, or insulation based on the environment isn’t sci-fi anymore. It’s happening, and companies are racing to take the lead.
Take the latest innovation from Jeanne Tan and her team at The Hong Kong Polytechnic University—an AI-powered smart jacket designed to stop overheating before it happens. This isn’t your average high-tech coat. It’s 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 comfortable—whether you’re braving the cold or dealing with unexpected warmth.
But it’s not just in labs anymore. Fast fashion brands are jumping on climate-adaptive clothing, bringing AI-enhanced fabrics to the mainstream. We’re 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 good—they actually respond to the world around them. A jacket that shifts from breathable mesh indoors to a warm insulator outdoors? That’s the new power move.
For me, this is bigger than just another fashion trend. It’s the start of a shift towards truly functional, sustainable clothing—less waste, fewer unnecessary purchases, and clothes that last longer because they adapt.
The big question now? Who’s going to dominate this space? Right now, it’s researchers and niche innovators, but I expect the first major consumer brand to crack this will completely reshape the market.
One thing’s certain—this is only the beginning.
🛠️ Tools of the Week.
The Future of AI in Marketing and GTM – 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 differently—faster, 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 – AI that Continuously Optimises Your Website
Imagine if your website could tweak itself in real time to boost engagement—without 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. They’ve already seen a 42% improvement in click-through rates on marketing campaigns. That’s not a minor tweak—it’s a complete rethink of how businesses can approach web optimisation.
Dreamwell AI – Automating Influencer Marketing
Influencer marketing is still a mess—finding 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 – 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 campaigns—email sequences, social posts, SMS, everything—using multiple AI models that adapt to customer behaviour. It’s not just assisting marketers; it’s replacing the need for a traditional marketing team in some cases.
AI Startups Transforming GTM Strategies
Caleida – AI-Powered Sales and Marketing Agents
Caleida is coming out of Spain with some serious backing to develop AI-powered GTM strategies. They’re building intelligent sales and marketing agents that work across industries like automotive, real estate, and finance—markets that have been slow to embrace AI but are now playing catch-up.
Supernatural AI – AI That Runs Ad Campaigns for You
Ad campaigns are still painfully manual. Supernatural AI’s Supercharger platform integrates AI models and market data to automate entire advertising campaigns. This isn’t just about tweaking keywords; it’s AI running the show, making real-time adjustments and optimisations at scale.
Unusual – 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 from—whether that’s an ad, an email, or LinkedIn. It’s conversion rate optimisation on steroids.
Why This Matters
AI in marketing and GTM isn’t about incremental improvements anymore—it’s about fundamental shifts in how we engage, sell, and scale. These startups are proving that AI isn’t just an assistant; it’s the new strategic brain behind revenue growth.
If you’re in marketing, sales, or growth and still relying on traditional tools, now’s the time to start paying attention. These AI-powered startups are reshaping the playbook.
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📌 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.
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Derek