Instinct Eyes $10 Billion Valuation as Meta's Muse Resets the Agent Race

AI agent startup Instinct, fresh off a round valuing it at $2.5 billion, is now reportedly seeking new funding at a $10 billion valuation — even as Meta pushes its personal assistant Muse into the mass market with national advertisements, a cute logo, and heavy ambition, according to Newcomer's weekly briefing.

The two companies sit at the center of a category that has abruptly arrived as a consumer product: personal agents that promise to lighten users' administrative load and shift the balance of power away from big platforms and toward individuals. Investors appear convinced. The Information first reported Instinct's $10 billion talks.

The form factor is already expanding beyond the phone. Meta CEO Mark Zuckerberg debuted plans on Wednesday for a Tamagotchi-like device called "Muse Charm," a palm-sized gadget for using the assistant on the go, according to Bloomberg. Meta is targeting a rollout in time for the holidays.

Partnerships are multiplying fast. Shopify CEO Tobi Lütke announced a deal on Monday to let Muse check out across shops on Shopify's platform, and Shopify stock jumped more than 10% on the news. The deal likely won't stay exclusive, according to a source familiar with the matter, as Shopify aims to work with all parties.

The friction beneath the hype

A lot has to happen before personal agents become ubiquitous utilities. Neither the plumbing of online commerce nor its business norms can currently handle an army of bots replacing humans, Newcomer notes. Early adopters of Instinct complain the agent keeps prompting them to solve CAPTCHAs — to prove that it's human. Amazon has announced it will block Muse from shopping on its platform.

Popular restaurants are watching agents swarm their reservation systems, driven partly by agent marketing pitches that cite painless restaurant booking as a feature. Banning them looks like the obvious next step for eateries and reservation platforms alike.

Partnerships won't be a silver bullet for companies whose business models face a genuine threat. Expedia announced an integration with Muse, yet its stock still sank alongside travel booking peers on fears of disintermediation by an agent army.

A new version of the "SaaS-pocalypse" hit markets this week. Whole categories now dubbed the "consumer inertia" sector saw shares tank on the perceived agent threat. Banks, brokerages, and mobile carriers fell on the prospect of consumers switching effortlessly for better terms. Third-party services like OpenTable and DoorDash, which could be bypassed, got hit. So did subscription-based media businesses vulnerable to agents rationalizing purchases — New York Times Co. shares are down 15% since late last week.

As with the SaaS-pocalypse, Newcomer argues this is likely an overreaction. For consumers and businesses alike, software and services can be far stickier than they look.

Open questions

It's hard to imagine Amazon sustaining a "no outside agents allowed" policy if its customers want to use them. But it seems reasonable that the company would want to treat humans and agents differently, for technical reasons if nothing else. It's also intuitive, though perhaps less reasonable, that Amazon will do everything in its power to prevent agents from taking over its customer relationships.

The questions compound. Will Muse function less well with travel sites other than Expedia? Will it need them at all if it can access underlying data via Amadeus and Sabre? If Muse is your agent, will Meta decide which booking service you use — and will that choice benefit the customer?

For all the open questions, the prize is real: tools that could extricate users from the tedium created by their predecessors — and, as Newcomer puts it, a future where no one has to pass a Completely Automated Public Turing test to tell computers and humans apart.

Also this week: Corgi's café freeze

Insurance startup Corgi, which has more than doubled its valuation from $1.3 billion to $3.4 billion since January according to PitchBook, is showing strains behind its headline-grabbing marketing. CEO Nico Laqua has celebrated a seven-days-a-week office culture and said he'd rather die at 50 than live until 80 if it ensured Corgi became a $1 trillion company. The company recently bought a San Francisco building from basketball legend Steph Curry for $11 million — a price local real estate pros called high.

But Corgi green-lit 16 new café leases in San Francisco just two weeks ago, according to the San Francisco Business Times, then abruptly sacked its head of café expansion last week. One café was shut down for lacking a valid health permit. The dramatic expansion of its 24/7 café chain now appears to be on ice.

Corgi's Head of Underwriting Josh Shih says the ambition is to build a financial infrastructure company. Anna Martin, who works in European partnerships, describes the value as providing "normal insurance to the same audience at a different pace." As Corgi expands into reinsurance, trucking, liquor, and real estate insurance, it faces a talent question in specialty lines: Bain & Company partner Mario Conde notes complex commercial markets like cyber liability revolve around specialist individual underwriters — talent Laqua must attract from an industry he described as "run on fax machines and with boomers."

Head of Brand Erika Lee has a simple answer. The company hires an industry veteran to lead each new vertical, and "some of these executives have been underwriting longer than other staff members have been alive."