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- Embedding VC Newsletter - July 2025
Embedding VC Newsletter - July 2025
Hi friend,
July showed up with sunshine and heat, both outside and in the industry. As the weather turned up, so did the AI talent race, with headlines flying and teams moving faster than ever ⚡️. Hope you’ve been finding your own rhythm in the warmth, whether that means chasing the next big thing or just chasing shade 🌿.
Welcome to the July edition of the Embedding VC Newsletter, where we provide insights into the latest developments in our portfolio and the AI ecosystem.
✨ Insights
Transformers have defined the modern era of AI, but are we reaching their limits? We took a closer look at what might come next, from emerging architectures like state space models and RWKV to the quiet rise of startups rethinking foundational assumptions. If you're curious how shifts in architectural design could reshape efficiency, scalability, and the future direction of model development, this piece explores where we are, and where we might be heading. More on our Substack.
🗞️ Vectors In The News
Updates from Embedding VC portfolio companies:
AI coding assistant for professional software engineers and large codebases
Augment just had their OpenAI-style Launch Week: 4 days, 4 powerful drops redefining what agents can do across your dev stack 👇
Tasklist: Agents no longer operate as black boxes. Tasklist gives structure and visibility with step-by-step plans, editable tasks mid-run, and live progress tracking
Context Lineage: Introduces scoped memory built from Git history so agents can understand code evolution, i.g. reuse past patterns, debug regressions, and answer “why” questions using real commit rationale
Easy MCP: A one‑click setup for MCP servers like CircleCI, MongoDB, Redis, Sentry, and Stripe, so agents can access live system context, not just static files
CLI + App Preview: Launches the agentic CLI, Auggie, and previews the app to enable terminal-first workflows: start agents from tickets or CI, review PRs in the terminal, and orchestrate agents without touching an IDE
—> Check out the launch video for the agentic CLI, Auggie!
A Python framework and cloud platform for building AI-powered search and recommendation systems
Strong H1 progress from Superlinked:
Launched the cloud product in private preview on GCP, already processing terabytes of data and serving real production queries
Strong early adoption across e-commerce and enterprise knowledge management use cases, with published case studies (BrandAlley, Climatebase) showing major performance gains over legacy solutions
Cursor for creatives
The Flora Team continues to ship exciting new features!
Runway Act-Two launched in Flora: Now you can turn your own live performance into fully animated character motion, perfect for cinematic scenes, avatars, or AI-native films
Reimagine your environment with Luma Modify: restyle, retexture, and swap worlds with a click. Perfect for motion capture, puppeteering, and isolated VFX
Last but not least: check out the Pocket Guide to FLORA and turn ideas into cinematic magic with ease ✨
The world's most scalable, privacy-first, ambient intelligence for buildings
New Technology: Heatic™ Wired is the newest addition to the Heatic™ 2 lineup, offering precise thermal-based occupancy sensing with the option to connect via wired or wireless setups. It detects presence and motion without capturing personal data, making it ideal for smart spaces that require flexibility, privacy, and real-time insights.
Senior Living Featured by NVIDIA: Nvidia spotlights Butlr’s AI-powered heat maps which use thermal sensors and neural nets to track motion like falls or restlessness in real time to keep seniors safe without capturing personal data.
Workplace+ Featured by CNBC: CNBC covers Butlr’s body-heat sensor tech as a privacy-first solution for tracking office usage, optimizing space, staffing, and design without cameras or personal data.
Specialized AI agents to automate core engineering workflows
Propel shares some fresh updates:
Rolled out major performance and UX improvements with enthusiastic early feedback; customers are seeing smoother workflows and quicker time-to-value
GTM is gaining traction, with new deals from warm intros and targeted outbound, and valuable large enterprises now in the pipeline
Also, meet the new Propel site! https://www.propelcode.ai/
💡 New Embedding Vectors
Embedding VC invests in Shiplight
Shiplight AI is an AI-native platform that makes end-to-end QA testing 10x easier for fast-moving software teams. Instead of writing and maintaining fragile test suites, teams use Shiplight to achieve full test coverage in days — with >95% bug detection and near-zero maintenance. Founded by ex-Airbnb, Meta, and Google engineering leaders, the team brings deep expertise in infra, developer tools, and agentic AI. We’re excited to back Shiplight because we believe the future of software quality will be AI-native and effortless.
They’re now onboarding early customers with free trials and white-glove support. If you know any teams who might benefit from smarter, faster QA, we’d love to make an intro! 🙌🏼
👋 Catch you in August! Same sunshine, new stories. 🌴
See you soon! We are Embedding VC.
Embedding VC invests in early-stage Generative AI startups.