Sourcery (4/17-4/21)
Coachella Wkd 2: Frank < Fred Again ~ Pagaya, Unchained, Clerkie, Capitola, Rally, Fractal, Noah Medical, Cortica, Memora Health, Scan.com, Miovision, CoreWeave, Tonal, Huntress, Odeko, Ynsect...
I love Coachella
Somehow I found myself at both weekends again. Whoops. I blame Fred.
After laying the groundwork on what the festival entails from last week’s Sourcery, let’s transfer that knowledge to something we are all obsessed with: the tech world. Last year we shared the Startup Lessons Learned From a Weekend at Coachella and the Stages as Investors (hm interesting how these panned out). This year, we’ll break down the vibe of the two weekends and the talk-of-the-town artists. There are some noticeable differences in the types of crowds, quality, and order of performances, and strong similarities in how the two worlds overlap (much closer than you’d think).
But first, let’s address Frank Ocean.
The fans deserved a real statement. A tell-all, leave nothing behind, kind of thing. This is the part of crisis management where timely communication and transparency are key to instill trust and respect in your audience. Sure, he might’ve said he injured himself, but something else much deeper was going on underneath that. He should’ve opened up about it. And what have we learned from startups about building audiences? They’re #1. His fans were left feeling taken for granted and unappreciated. It’s going to take time and work to rebuild that relationship and reputation.
As for the two separate weekends. Let’s break it down in startup language.
Weekend 1: The momentum VCs/founders are first weekend attendees, they don’t want fomo, they want to be in the mix, be trendy, and get ahead of everything before anyone else sees it… even if it costs millions to initially build. There will be some hiccups. Late performances, shoddy audio, stages that have to be rebuilt and reimagined hours before the big show. But it’s okay, it’s history, we learn and grow from these moments. And sometimes we knock it out of the park on the first try.
Weekend 2: These festival goers are the real ones, they are disciplined and can hold out for the seasoned artists or second-time performances. The risk of running into a bad set is low because they’re all trained to optimize performance from what they felt the first weekend (shoutout to Jai Paul). From learning from technical glitches to sound quality, to finding the right stage and time to perform. They’ve typically got it nailed down. It also feels much less crowded here, and the people are more normal.
The winner of it all: Fred Again…
If I were an investor in Fred Again, then I’d be an angel in the family and friends round. Because that’s how early I want to think I found him. And if that’s correct, then his Coachella performance was a massively competitive Series A round led by a big name VC based off of explosive early revenue growth, high retention rates, constant innovation in product and sticky GTM motions.
For context, in 2022 he played for the first time at Coachella (let’s call this the Seed) after releasing his 1st album in 2021 (only a year before!) in the smaller ‘up and coming’ indie-rock/alternative stage Mojave (I have a pic walking behind him backstage, it’s legit), and just a year later he’s pulled in for the big bucks Coachella Stage?? Absolutely unbelievable. Fred Again has been able to attract, engage and retain so many fans by keeping them along for the ride. Doing pop up shows here and there. Taking over MSG for a massive rave. Traveling the world to extend reach. Being a genuine and authentic human. And collaborating with Skrillex and Four Tet to pump up the jam. A perfect storm.
“Game met game” on that stage and the crowd wanted more. The three DJs converged their audiences and sounds into one massive fan base, proving the power of partnerships and collaboration. But the cherry on top? They were all having a blast. It was the most energetic yet appreciative performance of the festival. They were truly grateful to be there. They showed up.
Read more here:
Twitter’s going crazy over Skrillex, Fred Again, & Four Tet at Coachella
Bonus if you find the rabbit hole of Four Tet memes & tweets
Did we miss something? Have a controversial take? Just love Sourcery? ⤵️⤵️⤵️
. . .
Last Week (4/17-4/21):
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 Pagaya, Unchained, Clerkie, Capitola, Rally, Fractal, Noah Medical, Cortica, Memora Health, Scan.com, Miovision, CoreWeave, Tonal, Huntress, Odeko, Semgrep, Weaviate.io, Ditto, Orbit Fab, SpecterOps, Optable, GOALS, Lexion, Rock The Bells, Kindred, Groundlight, Mansa, Motion, Primo, Consensus, Ynsect, Whisper, OnZero, Evergrow; Akamai, Religion of Sports, Epic Games, Pagaya; SeatGeek
Final numbers on AI Taking Over Jobs at the bottom.
Deals
Fintech:
- Pagaya (Nasdaq: PGY), an Israeli credit analysis firm, raised $75m from longtime venture backer Oak HC/FT, per Axios Pro. https://axios.link/40sg7bT
- Unchained, a provider of financial services for bitcoin holders, raised $60m in Series B funding. Valor Equity Partners led, and was joined by NYDIG, Trammell Venture Partners, Ecliptic Capital and Highland Capital Partners. https://axios.link/41l1tnV
- Clerkie, a San Francisco-based financial automation platform, raised $33 million in Series A funding. Left Lane Capital led the round and was joined by Wellington Management Company, Flourish Ventures, Citi Ventures, CMFG Ventures, and Vestigo Ventures.
- TaxCloud, a Norwalk, Conn.-based e-commerce sales tax compliance platform, raised $20m led by Camber Partners. www.taxcloud.com
- Capitola, a Mountain View, Calif.-based digital marketplace for commercial insurance, raised $15.6 million in Series A funding led by Munich Re Ventures
- Rally, a Portland, Ore-based checkout platform for e-commerce brands, raised $12 million in Series A funding. March Capital led the round and was joined by Felix Capital, Commerce Ventures, Afore Capital, Alumni Ventures, and Kraken Ventures.
- Fractal, a New York-based digital asset clearing and settlement startup, raised $6m from QCP Capital, 6th Man Ventures, Archetype, Blizzard and CMT Digital. https://axios.link/3L8frnK
- Bixby, a Chicago, IL-based provider of credit information on private syndicated loan issuers, raised $5.5 million in a Series A funding round led by Fitch Ventures. FinTech Collective
- Coinflow Labs, a Chicago-based Web3 payment stack provider, raised $1.45 million in pre-seed funding. Jump Crypto and Reciprocal Ventures co-led the round and were joined by CMT Digital, Digital Currency Group, Gumi Cryptos, Builder Capital, Prompt Ventures, Blocktech Ventures, and other angels.
. . .
Care:
- Noah Medical, a San Carlos, Calif.-based medical robotics developer, raised $150m in Series B funding. SoftBank and Prosperity7 Ventures co-led, and were joined by Tiger Global and insiders Hillhouse, Sequoia China, Shangbay Capital, Uphonest Capital, Sunmed Capital, Lyfe Capital, 1955 Capital and AME Cloud Ventures. https://axios.link/3MVFGij
- Cortica, a San Diego-based autism care provider, raised $75m in Series D funding. Deerfield Management and Optum Ventures co-led, and were joined by RA Capital, Echo Health Ventures, Longitude Capital, .406 Ventures, Questa Capital, Ajax Health, Aperture Venture Partners and the Autism Impact Fund. https://axios.link/41gXitf
- Memora Health, a San Francisco-based clinical automation company, raised $30 million in funding. General Catalyst led the round and was joined by Northwell Holdings, NorthShore – Edward-Elmhurst Health, PagsGroup, and others.
- Scan.com, a diagnostic imaging startup with offices in Atlanta and London, raised $12m in Series A funding from Aviva Ventures, YZR Capital, Oxford Capital, Triple Point Ventures, Simplyhealth Ventures and Forefront Venture Partners. https://axios.link/41Ar5x8
- Cure, a functional hydration brand, raised $5.6m in Series A funding. Lerer Hippeau led, and was joined by Valedor Partners, Simple Food Ventures, Great Oaks Venture Capital, Joyance Partners, Silas Capital and Kim Clijsters. https://axios.link/3A2oyjt
. . .
Enterprise & Consumer:
- EquipmentShare, a Columbus, Mo.-based equipment and digital solutions provider for the construction industry, raised $290 million in funding. Funds affiliated with BDT Capital Partners led the round and was joined by RedBird Capital Partners, Tru Arrow Partners, Sound Ventures, and Brown Advisors.
- Miovision, a Canadian traffic management software provider, raised C$260m co-led by TELUS Ventures, Maverix Private Equity and Export Development Canada. It also acquired Global Traffic Technologies, a St. Paul, Minn.-based maker of emergency pre-emption and traffic signal solutions. https://axios.link/3L6mxcf
- CoreWeave, a Roseland, N.J.-based cloud provider, raised $221 million in Series B funding. Magnetar Capital led the round and was joined by NVIDIA, Nat Friedman, and Daniel Gross.
- Tonal, an SF-based connected weight training startup, raised $130m in from L Catterton, Cobalt, Dragoneer, Kindred Ventures and THVC. https://axios.link/43CY3P6
- Razor Group, a Berlin-based Amazon merchant acquisition platform, raised €80m in Series C funding from Upper90, L Catterton, Presight Capital, Blackrock, GFC, LatinLeap and Redalpine and 468 Capital. The company also bought rival Stryze Group. https://axios.link/3GMYn41
- Odeko, a New York-based operations partner for independent coffee shops, raised $53 million in Series D funding. B Capital led the round and was joined by GGV Capital, Tiger Global Management, Amex Ventures, KSV Global, and FJ Labs.
- Semgrep, a San Francisco-based code security solution company, raised $53 million in Series C funding. Lightspeed Venture Partners led the round and was joined by Felicis Ventures, Redpoint Ventures, and Sequoia Capital.
- Weaviate.io, an Amsterdam-based vector database developer, raised $50 million in funding. Index Ventures led the round and was joined by Battery Ventures, NEA, Cortical Ventures, Zetta Venture Partners, and ING Ventures.
- Ditto, a San Francisco-based distributed data platform developer, raised $45 million in Series A funding. Acrew Capital led the round and was joined by U.S. Innovative Technology Fund, True Ventures, and Amity Ventures.
- Orbit Fab, a Lafayette, Colo.-based on-orbit refueling startup, raised $28.5m in Series A funding. 8090 Industries led, and was joined by Stride Capital, Industrious Ventures, Lockheed Martin Ventures, Tribe Capital, Good Growth Capital, and Massive Capital Partners. https://axios.link/3A8lsu8
- SpecterOps, a Seattle-based cybersecurity solutions provider, raised $25 million in Series A funding led by Decibel.
- Innovamat, a Barcelona-based math education startup, raised $21m in Series A funding. Reach Capital led, and was joined by Kibo Ventures, Bonsai Partners, Axon Partners, 10x and Dozen Investments. https://axios.link/3UHrv2k
- Optable, a Montreal-based data collaboration and clean room platform for publishers and advertisers, raised US$20m in Series A funding from Hearst Ventures, Brightspark Ventures, Desjardins Capital, Deloitte Ventures and asterX. https://axios.link/3L9pHvN
- GOALS, a Stockholm-based soccer-focused game studio, raised $20 million in Series A funding. Seven Seven Six led the round and was joined by Northzone, Moonfire, and Cassius.
- Lexion, a Seattle-based contract management and operations workflow platform, raised $20 million in Series B funding. Point72 Ventures led the round and was joined by Citi Ventures, Khosla Ventures, Madrona Venture Group, and Wilson Sonsini.
- Rock The Bells, a Los Angeles-based hip-hop culture platform, raised $15 million in Series B funding. Raine Venture Partners, Irving Azoff, and Paramount co-led the round and were joined by Amex Ventures, Wildcat, Capstar Ventures, and others.
- Kindred, a home swapping network, raised $15m in Series A funding from NEA, Andreessen Horowitz, Bessemer Venture Partners, Caffeinated Capital and Onset Capital. www.livekindred.com
- Groundlight, a Seattle-based computer vision accessibility platform, raised $10 million in funding. Madrona, Greycroft Partners, and Founders Co-Op invested in the round.
- Fluree, a Winston-Salem, N.C.-based graph ledger database and data pipeline toolset developer, raised $10 million in Series A funding. SineWave Ventures led the round and was joined by Eve Atlas, Augment Ventures, Nanban Ventures, Wave Financial, Good Growth Capital, and Rise of the Rest.
- Mansa, a Los Angeles-based streaming platform for Black cultural content, raised $8 million in seed funding. MaC Venture Capital led the round and was joined by WndrCo, Galaxy Investment Partners, Base Ventures, Dubin & Co, Rainmaker Films, and Robert F. Smith.
- Qdrant, a Berlin-based vector database and search platform, raised $7.5 million in seed funding. Unusual Ventures led the round and was joined by 42cap, IBB Ventures, Cloudera cofounder Amr Awadallah, and other angels.
- Floodlight, a London-based smart business account for e-commerce, raised $6.4 million in seed funding co-led by Aleph and 83 North.
- Motion, a Toronto-based analytics platform for creatives, raised $6 million in seed funding. Headline led the round and was joined by Sugar Capital, Abstract Ventures, and Habitat Partners.
- Vinci Games, a San Francisco-based VR game studio, raised $5.1 million in seed funding. Makers Fund led the round and was joined by Y Combinator, Soma Capital, Pioneer Fund, Anorak Ventures, BonAngels, and Twitch cofounder Kevin Lin.
- TiiCKER, a Detroit-based shareholder loyalty and engagement platform, raised $5 million in seed funding co-led by Baysore Advisory Group, Red Cedar Ventures, and Flipturn Ventures.
- CurbWaste, a New York-based vertical SaaS provider for the waste management industry, raised $4 million in seed extension funding. TTV Capital led the round and was joined by B Capital Group and Mucker Capital.
- Primo, a Paris-based IT-as-a-service startup, raised $3.4 million in seed funding co-led by Headline and GFC.
- Consensus, a Boston, MA-based AI-powered search engine designed for scientific research, raised $3 million in a Seed funding round led by Draper Associates, with participation from Nomad Capital, Winklevoss Capital and a number of individual investors, bringing the total amount raised to $4.25 million. FinSMEs
- EVEN, a platform for music creators, raised $2.2m in seed funding led by CSA Partners. https://axios.link/403IJbe
- BrandLovrs, a São Paulo-based influencer marketing platform, raised $2 million in seed funding. Canary led the round and was joined by TheVentureCity.
- TicketRev, a Miami-based live event ticket platform, raised $1.1 million in pre-seed funding. 500 Startups, Soma Capital, Groove Capital, Techstars, the Minnesota Twins, and other angels invested in the round.
. . .
Sustainability:
- Ynsect, a French insect protein farm startup, raised €160m from undisclosed backers. It previously raised over $360m from firms like Upfront Ventures and FootPrint Coalition. https://axios.link/3L38K6m
- Whisper, a Crossville, Tenn.-based developer of quieter and more energy-efficient electric propulsion devices, raised $32m in Series A funding from Menlo Ventures, EVE Atlas, Capricorn Investment Group, Connor Capital, Kindred Ventures, Abstract Ventures, Moving Capital, AeroX Ventures, Cosmos Ventures, Linse Capital and LaunchTN. https://axios.link/3MSlNJd
- Novalith Technologies, an Australian lithium extraction startup, raised A$23m in Series A funding. Lowercarbon Capital led, and was joined by The Clean Energy Finance Corporation, the Grantham Environmental Trust, TDK Ventures and Investible. www.novalith.com.au
- OnZero, a Reno, Nev.-based carbon accounting and management platform, raised $16m in Series A funding. Fifth Wall led, and was joined by Piedmont Capital Investments and Henry Kravis. www.nzero.com
- Fervo Energy, a Houston-based geothermal technology company, raised $10 million in funding from Devon Energy Corporation.
- Evergrow, a San Francisco-based clean energy tax credits platform, raised $7 million in funding co-led by First Round Capital, XYZ Venture Capital, Congruent Ventures, and Garuda Ventures.
Acquisitions & PE:
- Descartes acquired Localz, a Melbourne-based location and messaging technology company, for approximately $6.2 million.
- Hubspot Ventures acquired a minority stake in Switchboard, a remote-based digital collaborative workspace. Financial terms were not disclosed.
- Akamai (Nasdaq: AKAM) agreed to buy Neosec, a Milpitas, Calif.-based API detection and response platform that raised over $15m in VC funding from backers like True Ventures, SixThirty Ventures, TLV Partners and New Era Capital Partners. www.neosec.com
- ZeroFox (Nasdaq: ZFOX) agreed to buy LookingGlass Cyber Solutions, a Reston, Va.-based external attack surface management company that had raised over $85m from firms like NewSpring Capital, Goldman Sachs, Alsop Louie Partners, Neuberger Berman and The Strand Partners. https://axios.link/3mOeLdC
- Religion of Sports, the Tom Brady co-founded sports media company that’s raised over $60m in VC funding, is acquiring British production company Jiva Maya. https://axios.link/3mH5qEB
- Epic Games, the Cary, N.C.-based Fortnite maker valued at $31.5b, acquired Brazilian game company Aquiris. https://axios.link/41hz4iJ
- Pagaya (Nasdaq: PGY) is considering a takeover bid for Sunlight Financial (NYSE: SUNL), a New York-based residential rooftop solar financing firm, per Bloomberg. https://axios.link/41CETas
. . .
IPOs:
- SeatGeek, a New York-based ticketing platform, confidentially filed for an initial public offering, according to The Information.
. . .
SPACs:
- Air Water Ventures, an Abu Dhabi-based direct air-to-water technology company, agreed to go public via a merger with Athena Technology Acquisition Corp. II, a SPAC. The deal values the company at $300 million.
Funds:
- Define Ventures, a San Francisco-based venture capital firm, raised $460 million across two funds to invest in the health care sector.
- Congruent Ventures, a San Francisco-based venture capital firm, raised $304 million for a fund focused on climate investments.
- Vice Ventures, a VC firm focused on nontraditional industries like sex-tech and psychedelics, raised $25m for its second fund. www.viceventures.com
AI'll be fine
Whether it’s art, music, code, photos or text, hardly a day goes by without a new piece of AI technology making the news, leaving us all to wonder what the world will look like in 5, 10 or 20 years time.
A report by Goldman Sachs suggested that AI could replace ~300m full-time jobs, and OpenAI, the creator of ChatGPT, says that as many as 80% of US workers could see at least some of their tasks taken over by large-language models. So, how do workers themselves feel about this emerging tech?
uRobot
A recent Pew Research survey of over 11,000 US adults revealed that a strong majority of respondents (62%) believe that AI will have a major impact on workers generally over the next 20 years. However, only 28% of those surveyed believed that AI would have a major impact on them personally, with 35% expecting only a minor impact to themselves.
Overall, more of the respondents expect AI to be a negative. Some 32% believe that AI will be more harmful than helpful to workers generally — again more than the 15% who think they themselves will be personally affected in a negative way.
Interestingly, this survey was conducted in December 2022, only a month after the launch of ChatGPT-3 — before Microsoft's AI-powered Bing, Google's chatbot Bard, and OpenAI's even more advanced model, GPT-4, were released.
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.