Sourcery (1/9-1/13)
More Fraud ~ Superscript, Butter, Wunderte, Apperio, C14, Monogram Health, ShiftKey, Carbon Health, Peppy, Paytient, Oula, Digitail, OutSystems, Chronosphere, DeepL, Hack the Box, Worlds, Metaplane
Wow. Last week came back strong.
With a full list of early to growth deals (potentially Microsoft/OpenAI), and a bunch of interesting mergers/acquisitions (Dr. Dre, Oak Street Health, Molekule)… and more fraud uncovered! This one is juicy.
Still, there are nearly zero IPOs/SPACs and that will continue for some time (sorry IBs, it’s M&A szn).
Readings
Structure, Matt Levine
On down rounds, extensions, how to value a company in this environment (cred to Kesar)
The Most Acquisitive Acquihirers in Software, Tomasz Tunguz
The Startup M&A Market Fell 94% Year over Year - But One Segment Thrives, Tomasz Tunguz
I Don’t Get It: Climate Investing, Meera Clark X Yoni Rechtman
Inside the structure of OpenAI’s looming new investment from Microsoft and VCs, Fortune
JPMorgan Says Frank Was Fraud; Also SBF’s Substack and premium bond taxation, Matt Levine
JPMorgan is suing the leaders of Frank, a financial-aid business it bought for $175 million in 2021, alleging they duped the bank by making up millions of fake student accounts to show it had a growing business. According to the bank's lawsuit, co-founder Charlie Javice approached JPMorgan in summer 2021 about a potential acquisition, claiming Frank had 4.25 million users; in reality, says the suit, the startup had fewer than 300,000 real users. The WSJ has more here.
Risk Management In The Age Of YOLO, Betting The Mouse To Save The House, Kyle Harrison
My Interview with Mister Exits, Chess, history, Palantir, and more, Joe Lonsdale
. . .
Last Week (1/9-1/13):
Relevant deals include the 60+ deals across stages below.
I've categorized the deals below into four categories, Fintech, Care, Enterprise & Consumer, and Sustainability, and ordered from later-stage rounds to early-stage rounds. Highlighted deals include Superscript, Butter, Wunderte, Apperio, C14, Monogram Health, ShiftKey, Carbon Health, Peppy, Paytient, Oula, Digitail, OutSystems, Chronosphere, DeepL, Hack the Box, Welcome Homes, Worlds, Metaplane, Personal.ai, Digital Village, Blaze, Attention, T2, Xpansiv; OpenAI/Microsoft, Human Interest, Dr. Dre, Pachyderm/HP, Molekule, Duck Creek Techonologies, Oak Street Health, UserTesting
Final numbers on US VC Capital Availability/Dry Powder at the bottom.
Deals
Fintech:
- Superscript, a London-based insure-tech focused on SMEs and high-growth tech companies, raised £54m in Series B finding. BHL UK led, and was joined by The Hartford and Concentric. https://axios.link/3iqRSuK
- Butter, an SF-based accidental payments mitigation startup, raised $22m in Series A funding. Norwest Venture Partners led, and was joined by Atomic, Transpose Platform and Spring Tide Capital. https://axios.link/3k9naqy
- Joyn, a New York, NY-based insurance technology company, raised $17.7 million in a Series A funding round led by OMERS Ventures, with participation from Avanta Ventures, ManchesterStory, Cohen Circle, SiriusPoint and several individual investors. VC News Daily
- The Easy Co., a social crypto wallet startup, raised $14.2m in seed funding from Lobby Capital, Relay Ventures, 6th Man Ventures, Tapestry VC, Upside Partnership and Scribble Ventures. www.easy.me
- Alkimiya, a Wilmington, DE-based decentralized capital markets protocol, raised $7.2 million in a round of financing co-led by 1kx and Castle Island Ventures, with participation from Dragonfly, Circle Ventures and Coinbase Ventures. CoinDesk
- Wunderite, a Boston-based provider of collaboration software for independent insurance agents, raised $7.2m in Series A funding led by insider Spark Capital, per Axios Pro. https://axios.link/3ZkMLgp
- Apperio, a London-based provider of legal spend analytics and matter tracking software, raised $7m in equity and debt funding. Molten Ventures led, and was joined by Notion Capital, IQ Capital, Nextlaw Ventures, Volution and Hambro Perks. www.apperio.com
- Canary, a fintech startup that helps employers set up emergency relief funds for workers, raised $2.9m in seed funding led by Capital One Ventures, per Axios Pro. https://axios.link/3ZxCflI
- C14, a New York-based web3 payments startup, raised $2.5m in seed funding led by General Catalyst, as first reported by Axios Pro. https://axios.link/3VYcDeM
- Proven Optics, a Columbus, Ohio-based financial management software company, secured strategic funding from ServiceNow. www.provenoptics.com
. . .
Care:
- Monogram Health, a Nashville-based in-home evidence-based care and benefit management services provider for patients living with polychronic conditions, raised $375 million in funding. CVS Health, Cigna Ventures, Humana, Memorial Hermann Health System, SCAN, TPG Capital, Frist Cressey Ventures, Heritage Group, Pura Vida Investments, and Norwest Venture Partners invested in the round.
- ShiftKey, a Dallas, TX-based scheduling platform for the healthcare industry, raised $300 million at a $2+ billion valuation in a round of financing led by Lorient Capital. Crunchbase News
- Carbon Health, an SF-based primary care provider, raised $100m from CVS Health Ventures in an initial close of its Series D round that also will include a pilot of Carbon Health clinics in CVS stores. https://axios.link/3GSK5z3
- Peppy, a London-based B2BBC health services platform focused on women’s reproductive health, raised $45m in Series B funding. AlbionVC led, and was joined by Kathaka, MTech Capital, Simplyhealth, Sony Innovation Fund and insiders Felix Capital, Hambro Perks, Outward VC and Seedcamp. https://axios.link/3IBXL2Z
- Paytient, a Columbia, Mo.-based health payment accounts provider, raised $33m in Series B equity funding (plus $7.5m in debt from SVB). Mercato Partners led, and was joined by Bertelsmann Investments and insiders Lightbank, Felicis Ventures, Box Group, Lachy Groom, Left Lane Capital, Commerce Bank, Crossbeam Ventures, Cultivation Capital and Inspired Capital. www.paytient.com
- Array Behavioral Care, a Mount Laurel, N.J.-based virtual psychiatry and therapy practice, raised $25m from backers like CVS Health. www.arraybc.com
- ReferWell, a Stamford, CT-based digital health company focused on finding and scheduling patient care, closed a Series B funding round led by Viewside Capital Partners, with participation from Essen Ventures (venture arm of Essen Health Care), as well as existing investors Health Catalyst Capital and Connecticut Innovations. VC News Daily
- Oula, a Brooklyn, NY-based maternity center delivering an evidence-based and personalized pregnancy experience, raised a $19.1 million Series A funding round led by 8VC, with participation from existing investors including Metrodora, the Female Founders Fund, Collaborative Fund and Alumni Ventures. VC News Daily
- Digitail, an Austin, TX-based pet care platform, fetched $11 million in a Series A round of financing led by Atomico. TechCrunch
- Inflow, a London-based platform for managing ADHD, raised $11m in Series A funding. Octopus Ventures led, and was joined by Hoxton Ventures and Route66 Ventures. https://axios.link/3X4MBbp
- Nest Genomics, a New York-based provider of software for implementing genomic programs, raised $8.5m in seed funding. B Capital led, and was joined by YC, Casdin Capital, DCVC, Samsung Next, Maven Ventures, iAngels, Arkin Digital Health, LionBird, Anne Wojcicki and Deneen Vojta. www.nestgenomics.com
- BIOHM Health, a Cleveland, OH-based microbiome innovation company, raised a $7.5 million equity financing round led by Middleland Capital's VTC Ventures, with participation from Felton Group, Jobs Ohio Growth Capital Fund, Aztec Capital Management, Cleveland Life Science Advisors, Valley Growth Ventures, Jump Start and other investors. VC News Daily
- Qritive, a Singapore-based digital pathology startup focused on cancer, raised $7.5m. MassMutual Ventures led, and was joined by SEEDS Capital and Exfinity Venture Partners. www.qritive.com
- Ferrum Health, a San Francisco, CA-based enterprise AI platform for healthcare systems, raised $6 million in a round of financing co-led by Urban Innovation Fund, Singtel Innov8 and Cercano Management. FinSMEs
- Porter, a Miami-based home care startup, raised $5.4m in seed funding from Grit Capital Partners, Old Line Capital and JLC Family Office. www.helloporter.com
- Wisdo Health, a New York-based peer support network for reducing loneliness, raised $5m in Series A extension funding from Marius Nacht, Alive Israel Healthtech Fund, Bridge Builders Collaborative, Anne Wojcicki and Avram Miller. www.wisdo.com
- Microsoft invested an undisclosed amount into a Paige, a New York-based clinical AI digital pathology startup. www.paige.ai
. . .
Enterprise & Consumer:
- Microsoft (Nasdaq: MSFT) reportedly is in talks to invest around $10b into ChapGPT creator OpenAI, per Semafore. Microsoft previously invested $1b, shortly after OpenAI shifted to a for-profit model. Flashback: Microsoft's future with OpenAI
- OutSystems, a Boston-based provider of low-code app development tools, last fall raised around $228m from KKR at around a $4.3b valuation, which is 55% lower than the valuation it secured in February 2021 in a round co-led by Abdiel Capital and Tiger Global, per Forbes. https://axios.link/3J0detZ
- Chronosphere, an Issaquah, Wash.-based data observability startup, raised $115m in Series C extension funding at a $1.6b valuation. GV and Geodesic Capital co-led, and were joined by insiders Addition, Founders Fund, General Atlantic, Greylock, Glynn Capital and Lux Capital. https://axios.link/3QtB2YI
- DeepL, a German language translation AI, raised over $100m at a $1b valuation. IVP led, and was joined by Bessemer Venture Partners, Atomico and WiL. https://axios.link/3CEPJ5F
- Capella Space, an SF-based provider of on-demand Earth observation data via space radar, raised $60m in Series C expansion funding from Thomas Tull’s USIT. https://axios.link/3XkSDo2
- Hack the Box, a gamified “white hat” hacking platform, raised $55m. Carlyle led, and was joined by Paladin Capital Group, Osage University Partners, Marathon Venture Capital, Brighteye Ventures and Endeavor Catalyst Fund. https://axios.link/3X4mOjl
- Welcome Homes, a New York, NY-based Proptech company that delivers streamlined homebuilding solutions, raised $29+ million in a Series A funding round led by Era Ventures, with participation from Parker89, Montage Ventures, Foundamental, Global Founders Capital, Activant Capital, Gaingels, Elefund and Arkin Holdings. VC News Daily
- Worlds, a Dallas-based 4D infrastructure company for metaverse building, raised $21.2 million in Series A1 funding. Moneta Ventures led the round and was joined by Align Capital, Green Park & Golf Ventures, Chevron Technology Ventures, Piva Capital, Perot Jain, and Capital Factory.
- CyberX, a market maker for digital assets, raised $15m from Foresight Ventures. www.cyberx.com
- Forj, a Milwaukee-based platform for managing and engaging professional communities, raised $15 million in Series A funding. Plymouth Growth led the round and was joined by Forj Investors, Baird Capital, and GCI. The company also merged with Web Courseworks, a Madison, Wis.-based learning management system.
- Coho AI, a Tel Aviv, Israel-based company which uses AI to help B2B SaaS companies boost revenue, raised $8.5 million in a financing round led by Eight Roads, TechAviv and angel investors. TechCrunch
- Metaplane, a Boston, MA-based data stack monitoring company, raised $8.4 million in a Seed round of financing led by Khosla Ventures, with participation from Flybridge Ventures, Stage 2 Capital and several angels. BusinessWire
- Personal.ai, a San Diego, CA-based AI-first messaging platform startup, raised $7.8 million from Supernode Global, Differential Ventures, BBG Ventures, Beni VC, Village Global, Keshif Ventures and Good Friends. BusinessWire
- Seek AI, a New York-based generative AI startup focused on data, raised $7.5m co-led by Conviction Partners and Battery Ventures. https://axios.link/3IKhWM2
- Digital Village, a Paris, France-based developer of 3D immersive virtual worlds, raised $4 million from L'Oréal, The Venture Reality Fund, Venrex and the British Fashion Council. TechEU
- Blaze, a non-code app builder, raised $3.5m in pre-seed funding co-led by Flybridge Capital and MaC Venture Capital. https://axios.link/3vV2eGh
- Attention, a New York, NY-based Natural Language Processing (NLP) startup that helps sales reps sell faster, raised $3.1 million in a financing round led by Eniac Ventures, with participation from Frst, Liquid2 Ventures, Maschmeyer Group Ventures and Ride Ventures. TechCrunch
- Baton, a New York-based marketplace for small business acquisitions, raised $2.8 million in pre-seed funding. Giant Ventures led the round and was joined by Bloomberg Beta and other angels.
- DashLX (fka PWR Lab), a Flagstaff, AZ-based platform for product innovation, customer engagement and insights based on active experience data sourced from wearables, raised $2.5 million in a Seed round of financing led by Sonoran Founders Fund, with participation from EPIC Ventures, BaseLayer Ventures, Arizona Venture Development Corporation, Accelerator Ventures, New Mexico Vintage Fund and others. FinSMEs
- Giga Fun Studios, a casual gaming startup, raised $2.4 million in a Seed funding round co-led by Lumikai and Fireside Ventures, with participation from All In Capital, Kettleborough VC and Riverwalk Holdings. VentureBeat
- Playstream, a Tel Aviv, Israel-based content creation and entertainment platform for creators, raised $2 million from Vgames. VentureBeat
- T2, a Twitter alternative launched by Gabor Cselle (ex-Twitter, Google), raised $1.1m in seed funding from angels like Bradley Horowitz, Rich Miner and former Wikipedia CEO Katherine Maher. https://axios.link/3CKamNE
. . .
Sustainability:
- Xpansiv, an SF-based market infrastructure platform for global carbon and environmental commodities, raised $125m from backers like Bank of America and Goldman Sachs. It also acquired Evolution Markets, a provider of transaction and advisory services for the carbon and energy transition markets. www.xpansiv.com
- ReelData AI, a Halifax, Canada-based data and automation provider to farmers, raised $8 million in Series A funding. Buoyant Ventures led the round and was joined by S2G Ventures and The Nest Family Office.
Acquisitions & PE:
- BlackRock, a New York, NY-based investment management and technology company, acquired a minority stake in Human Interest, a San Francisco, CA-based SMB 401(k) provider that has raised a total of $336.7 million in funding from the likes of The Rise Fund (TPG’s global impact investing platform), SoftBank Vision Fund 2, Crosslink Capital, NewView Capital, Glynn Capital, U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital, Susa Ventures and others. TechCrunch
- Dr. Dre is selling a collection of music assets in separate transactions to Shamrock Holdings and Universal Music Group for about $200m, per Billboard. https://axios.link/3IJFtgi
- Hewlett Packard Enterprise, a Houston, TX-based edge-to-cloud company, acquired Pachyderm, a San Francisco, CA-based open-source data-driven pipeline company that had raised $28 million in funding from the likes of M12, Y Combinator and Benchmark. VentureBeat
- AeroClean Technologies (Nasdaq: AERC) completed its acquisition of Molekule, an SF-based maker of connected indoor air purifiers. AeroClean backers now own 55.5% of the merged company, which has a market cap just north of $50m. Molekule had raised over $140m from backers like RPS Ventures, Crosslink Capital, Foundry Group, Uncork Capital, Founders Circle Capital, TransLink Capital, Flight Ventures, Sand Hill Angels, Amazon Alexa Fund, Kevin Love and Maisie Williams. www.molekule.com
- DataStax, a Santa Clara, CA-based real-time AI company last valued at $1.7B, acquired Kaskada, a Seattle, WA-based company that creates and operates predictive models with event-based data and had raised $9.8 million in funding from the likes of Voyager Capital, NextGen Venture Partners, Founders’ Co-op and Walnut Street Capital Fund. VentureBeat
- Vista Equity Partners agreed to acquire Duck Creek Technologies (Nasdaq: DCT), a Boston-based provider of insurance industry SaaS, for $2.6b, or $19 per share (46% premium). www.duckcreek.com
- CVS Health (NYSE: CVS) is exploring a takeover of Chicago-based Oak Street Health (NYSE: OSH), a Medicare-focused operator of a network of value-based primary care centers, per Bloomberg. A deal could be valued north of $10 billion, including assumed debt.
- LeanTaaS, a Santa Clara, Calif.-based portfolio company of Bain Capital, acquired Hospital IQ, a Newton, Mass.-based provider of hospital automation software that had raised $48m from firms like Baxter Ventures, Health Velocity Capital, Allscripts Healthcare Solutions and Pierpoint Capital. https://axios.link/3GTLfKI
- Fidelity Investments acquired Shoobox, a Boston-based provider of automated equity management operations and financing software for private companies. Shoobox had raised over $10m from backers like Steve Papa and Salient Ventures. https://axios.link/3QvXhgx
- Pagaya (Nasdaq: PGY) acquired Darwin Homes, an Austin, Texas-based real estate investment management platform that had raised over $20m from firms like Canvas Ventures, Wave Capital, Pear VC, Khosla Ventures, Fifth Wall, TQ Ventures and Camber Creek. www.pagaya.com
- CertifiKID, a Potomac, Md.-based kid and family activity site backed by Kevin O'Leary, acquired Red Bank, N.J.-based digital media brand Hulafrog, per Axios Pro. https://axios.link/3Xoa5bh
- Buildout, a Chicago-based portfolio company of The Riverside Company, acquired Oval Room, a provider of visual media solutions to the commercial real estate market. www.buildout.com
- Thoma Bravo and Sunstone Partners completed their $1.3b acquisition of UserTesting (NYSE: USER), an SF-based user experience testing platform. https://axios.link/3XgRE8i
- Procter & Gamble (NYSE: PG) agreed to buy Mielle Organics, a Merrillville, Ind.-based maker of Black hair care products. Sellers include Berkshire Partners. https://axios.link/3CId9Hb
- Deel, an SF-based remote hiring and payroll company valued by VCs at $12b, acquired cap table management startup Capbase, a cap table management startup that raised $6m in seed funding from backers like Glider Capital, Adventure Fund, Aviso Ventures and Launch Fund. https://axios.link/3k9J5xU
- MessageGears, an Atlanta-based customer engagement platform for consumer brands, acquired Swrve, an SF-based mobile app marketing platform that had raised around $80m from firms like Atlantic Bridge Capital, WestSummit Capital, ACT Venture Capital, Evolution Media and Acero Capital. MessageGears backers include Long Ridge Equity Partners, The Argentum Group and Atlanta Ventures. https://axios.link/3QDuuac
- Morning Brew acquired Our Future, a New York-based business-focused media company. Financial terms were not disclosed.
. . .
IPOs:
Nothing to see here…
. . .
SPACs:
- World View, a Tucson, Ariz.-based developer of surveillance balloons, agreed to go public via Leo Holdings Corp. III (NYSE: LHC), a SPAC formed by Lion Capital. World View raised over $50m in VC funding from backers like Accel, Canaan Partners and Norwest Venture Partners. https://axios.link/3IMwUBo
Funds:
- Ares Management raised around $5b for its fifth infrastructure debt fund. www.aresmgmt.com
- Cartograph Ventures, an seed-stage consumer VC firm led by ex-Juul exec Alexander Cantwell, is raising its debut fund, per an SEC filing.
Charted: Capital availability
Data: PitchBook; Chart: Thomas Oide/Axios
In 2022, VCs raised a grand total of $162.6 billion across 769 funds in fresh capital, per PitchBook’s latest data. That followed 2021’s own venture fundraising record of $154.1 billion.
As of Sept. 30, 2022, there was about $298.5 billion of dry powder, per PitchBook.
While VCs have raised a lot of capital and continue to write checks, it has become harder for startups to raise new funding — largely because the bar is higher now.
This tension can be seen in capital availability. PitchBook calculations show the relationship between the demand for venture dollars — estimates based on historical capital needs by companies at each stage — and the funding invested each quarter.
Data: PitchBook; Chart: Tory Lysik/Axios Visuals
The material presented on Molly O’Shea’s website are my opinions only and are provided for informational purposes and should not be construed as investment advice. It is not a recommendation of, or an offer to sell or solicitation of an offer to buy, any particular security, strategy, or investment product. Any analysis or discussion of investments, sectors or the market generally are based on current information, including from public sources, that I consider reliable, but I do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. My views and opinions expressed in any website content are current at the time of publication and are subject to change. Past performance is not indicative of future results.