Sourcery (7/24-7/28)

Superconductors & UFOs ☀️ Finicast, Effektiv, Lucify, Vital Biosciences, GlossGenius, Airvet, AppHub, Preply, Protect AI, Croissant, Unstructured, Akooda, CompScience, Inspectify

Happy August! ☀️

AKA Leo season. Good luck to everyone out there dealing with the overly confident energy of our favorite astrology sign (I am one of us). And apologies in advance, this one is a bit long.

To recap the last week:

Birds aren’t real, Twitter becomes X, the world is quite hot, superconductors are taking off, members of the Varda team are working to make rocks float, visitors to the Mediterranean are fleeing for cooler climates, Bobbi destroyed Drake, aliens exist, and an older gentleman froze on TV. What a time to be alive. 

We took it easy most of the weekend after a very busy week. The highlight, and probably a terrifying experience for most, was a sunset flight from Torrance to Malibu and back with a friend who just got their pilot’s license in their retro striped Cessna. We were given two options: a fun ride, or a chill ride. Apparently we don’t get motion sickness, so we tried the fun ride. It was wild. While up in the sky, we did spend some time hunting for non-human biologics and UFOs as seen in this rare footage. 

And well, the new “X” seems to be working out quite well too. We had a “Xeet” go somewhat viral in the last couple of days. It was a breakdown of key points from Joshua Kushner's podcast with Patrick O’Shaughnessy (below). It’s not much compared to the millions of views and likes, comments, & retweets that Elon gets, but hey, it’s not nothing!

• If there are any other pods you want broken down, reply direct to this email or post in the comments 😊 maybe we’ll try another later this month

• BTW this Pete Davidson and Timothee Chalamet duet is what I think of when I hear “Xeet” 

Consumer Trends

The consumer market has been taking some time to work on themselves for a while (aka mostly get to cash flow positivity). Some signals (IPOs: CAVA & Oddity, Goodwater’s new $1B fund) are sending positive indications that it might be on the mend. There are some remarkable stories of startups like Checkmate that have used the power of organic marketing through TikTok to reach over 1M+ followers across their channels (more than any other fintech out there) to set a strong foundation for new user acquisition. It seems to be working. And as a matter of fact, I used Checkmate just yesterday to get a deal on my latest ‘healthy’ chocolate addiction: Sourse - on brand with Sourcery. Check out co-founder Rory’s tweets and LinkedIn posts to properly follow along.

Rabbit Hole

Ready for a ‘Rabbit Hole’? One of my developer friends Aaron just launched a business squarely solving for the complexities that come with Retool - something I know nothing about. Anyways, here are some highlights:

• Retool — Founded 2017, Last raised Series C, $45M at a $3.2B

  • Previously, companies would spend 100’s of 1,000’s of dev hours building basic internal tools (think admin panels, user lookup, change email, delete account). Retool has simplified all the infrastructural work to spin up internal apps (connect to any type of database).

  • Fire up apps with a little bit of code using their built in stuff or go full boar and custom code any part of the apps

  • Retool for Startups Program offers early-stage companies a $25,000 credit, empowering you to build internal tools quickly and efficiently.

• Aaron’s solution: The Online Tooling Company handles all your Retool dev for a flat monthly fee. Perfect for small eng teams that want to stay focused on building great products. Sounds cool. Plus the website is kind of sick. #DevelopersAreAwesome

Musings

• The CQ: Oddity's Debut and Rise of “Science-washing” Forerunner Ventures

• Goodwater Snags $1B Across Two New Funds, Despite Cooling Interest in Consumer Tech, TechCrunch

• Chris Paik - Venture Investing Frameworks, Invest like The Best

  • Chris Paik is a General Partner at Pace Capital. We cover his frameworks for investing in technological change, the state of consumer investing and social content platforms today, and how to think about value creation and capture in businesses

• How to Invest $1 Billion in Consumer Tech, with Goodwater Capital, StrictlyVC

  • Connie talks to Eric Kim and Chi-Hua Chien of Goodwater Capital about their focus on consumer tech "utilities"

• Sam Lessin’s “End of The Seed” tweet throws the book out of the window for future early stage round expectations based on how we’ve been valuing opportunities over the last decade+

. . .

Last Week (7/24-7/28):

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 Finicast, Effektiv, Lucify, Vital Biosciences, GlossGenius, Airvet, AppHub, Preply, Protect AI, Collaborative Robotics, Croissant, Unstructured, Akooda, CompScience, Inspectify, CleanLab, ReflexAI, Frigade, Stylib, OneTrust, Aeroseal, VEIR, Flipturn; Kering/Valentino, Amazon/iRobot, Public Storage, Winc.com, Cuup, Packers/Foamation

Final numbers on Streaming Unbundles Again at the bottom.

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Deals 

Fintech:

- Finicast, a San Mateo, Calif.-based SaaS enterprise collaborative planning platform, raised $12.8 million in seed funding led by Celesta Capital. 

- Giraffe, a New York-based impact investing platform for employees, raised $10.5 million in seed funding. Group 11 led the round and was joined by Altair Capital and others. 

- Effectiv, a San Francisco-based fraud and risk management platform for financial institutions and fintech companies, raised an additional $4.5 million in seed funding. Better Tomorrow Ventures led the round and was joined by Accel and other angels.

- Licify, a Bogota, Colombia-based procurement and financial software for the construction industry, raised $3.4 million in funding co-led by Brick & Mortar Ventures and Accion Venture Lab.

. . .

Care:

- Vital Biosciences, an Ottawa-based blood testing startup, revealed it has $48 million in funding, including a fresh $18.56 million Series A round led by Lachy Groom and Northpond Ventures.

- Proprio, a Seattle-based surgical technology company, raised $43 million in Series B funding. Sigmas led the round and was joined by Bird B, AG, Wheelhouse Capital, DCVC, BOLD Capital Partners, and others. 

- GlossGenius, a New York-based business solution for the beauty and wellness industry, raised $28 million in Series C funding. The Growth Fund of L Catterton led the round and was joined by Bessemer Venture Partners and Imaginary Ventures. 

- Airvet, a Los Angeles-based pet telehealth company, raised $18.2 million in Series B funding. Mountain Group Partners led the round and was joined by Canvas Ventures, Headline, Burst Capital, and others.

- UpLift, a Tampa Bay, Fla.-based behavioral health company, raised $10.7 million in Series A funding. Ballast Point Ventures led the round and was joined by Kapor Capital, Front Porch Ventures, and B Capital. 

- K4Connect, a Morrisville, N.C.-based enterprise technology provider for senior living communities, raised $8.9 million in funding. Bryce Catalyst and AVP co-led the round and were joined by Intel Capital, Forté Ventures, Topmark Partners, and the Ziegler-Linkage Fund. 

. . . 

Enterprise & Consumer: 

- PSG invested $95m into AppHub, a New York and San Francisco-based e-commerce software company. www.apphub.com

- Solink, an Ottawa-based physical security company for businesses, raised $60 million in Series C funding. The Growth Equity business within Goldman Sachs Asset Management led the round and was joined by OMERS Ventures and BDC IT Ventures. 

- Preply, a Brookline, Mass.-based online language learning platform, raised $42 million in Series C funding. Horizon Capital, Reach Capital, Hoxton Ventures, Educapital, Flashpoint, Foobar.VC, and Evli Growth Partners invested in the round.

- Protect AI, a Seattle-based A.I. and machine learning security company, raised $35 million in Series A funding. Evolution Equity Partners led the round and was joined by Salesforce Ventures, Acrew Capital, boldstart ventures, Knollwood Capital, and Pelion Ventures.

- Collaborative Robotics, a Santa Clara, Calif.-based robotics company, raised $30 million in Series A funding. Sequoia Capital led the round and was joined by Khosla Ventures, Mayo Clinic, Calibrate Ventures, Neo Ventures, and 1984.vc. 

- ​​Croissant, a Nashville- and New York-based commerce enablement platform, raised $24 million in seed funding. Portage Ventures, Third Prime, BoxGroup, 25madison, Twelve Below, and KKR cofounders George Roberts and Henry Kravis invested in the round.

- Unstructured, a Sacramento, Calif.-based LLM data preprocessing solutions provider, raised $20 million in Series A funding. Madrona led the round and was joined by Bain Capital Ventures, M12 Ventures, Mango Capital, MongoDB Ventures, Shield Capital, and other angels.

- Akooda, a Boston-, New York-, and Tel Aviv-based ops intelligence platform, raised $11 million in seed funding. NFX, Atlassian Ventures, Village Global, and Founder Collective invested in the round.

- Adaptive Shield, a Tel Aviv-based SaaS security platform, raised $10 million in funding from Blackstone Innovations Investments.

- CompScience Insurance Services, a San Francisco-based safety analytics platform, raised $10 million in Series A funding. Valor Equity Partners led the round and was joined by Four More Capital. 

- CompScience Insurance Services, a San Francisco-based safety analytics platform, raised $10 million in Series A funding. Valor Equity Partners led the round and was joined by Four More Capital. 

- Switchboard, a San Francisco-based data engineering automation platform, raised $7 million in Series A funding co-led by GFT Ventures and Quest Venture Partners. 

- GlobalComix, a Pittsburgh-based digital comics platform, raised $6.5 million in Series A funding. Point72 Ventures led the round and was joined by Endeavor and others.

- Inspectify, a Seattle-based property inspection platform, raised $5.76 million in funding led by Fundrise. 

- Thingtrax, a London-based manufacturing performance platform, raised £4.3 million ($5.53 million) in pre-Series A funding. Concentric, Superseed, and Puma Private Equity co-led the round and were joined by Haatch, Portfolio Ventures, Vinci Venture Capital, and other angels.

- MSPbots, a Chicago-based MSP solutions provider, raised $5 million in seed funding from Mercury.

- Quench.ai, a Murrieta, Calif.-based A.I. learning coach platform, raised $5 million in pre-seed funding. Firstminute capital, Tuesday VC, BY Venture Partners, Ada Ventures, Plug and Play Ventures, Notion Capital, IFG, Antler, Ventures Together,and others invested in the round. 

- Cleanlab, a San Francisco-based maker of AI accuracy boosting software, raised $5m in seed funding led by Bain Capital Ventures. www.cleanlab.ai

- HumanFirst, a Montreal-based data productivity suite, raised Can$5 million ($3.8 million) in seed funding. Panache Ventures led the round and was joined by Invoia, Real Ventures, BoxOne Ventures, and other angels. 

- ReflexAI, a New York-based training and quality assurance tools provider for call centers, raised $3.3 million in seed funding. Footwork led the round and was joined by Emerson Collective, Alt Capital, Gaingels, and other angels. 

- Frigade, a San Francisco-based product onboarding and adoption solution for React, raised $3 million in seed funding. Craft Ventures and La Famiglia co-led the round and were joined by Y Combinator, Defy.vc, Magic.fund, and others.

- Stylib, a London-based search platform for design professionals, raised £1.5 million ($1.93 million) in pre-seed funding. Foundamental led the round and was joined by Nemetschek Group and Redstone Built World Strategy.

- Space DOTS, a London-based miniaturized in-situ testing developer for advanced materials in space environments, raised $1.5 million in pre-seed funding. Boost VC, Sie Ventures, 7Percent Ventures, Blue Wire Capital, and other angels invested in the round.

. . .

Sustainability:

- OneTrust, an Atlanta-based ESG data company, raised $150m in funding led by Generation Investment Management. www.onetrust.com

- Aeroseal, a Miamisburg, Ohio-based sealant manufacturer, raised $67m in Series B funding co-led by Breakthrough Energy Ventures and Climate Investment, with participation from Beazer Homes and Aramco Ventures, Building Ventures, 2150, and Energy Impact Partners also participating. https://axios.link/44zWph7

- ev.energy, a London- and Palo Alto, Calif.-based electric vehicle managed-charging software platform, raised $33 million in Series B funding. National Grid Partners led the round and was joined by Aviva Ventures, WEX Venture Capital, InMotion Ventures, Energy Impact Partners, Future Energy Ventures, and ArcTern Ventures.

- VEIR, a Woburn, Mass.-based clean technology company, raised an additional $24.9 million in series A-2 funding. Breakthrough Energy Ventures, The Engine Fund, Congruent Ventures, Fine Structure Ventures, Galvanize Climate Solutions, and VXI Capital invested in the round.

- ETCH, a Baltimore-based decarbonization company, raised $7.5 million in seed funding from Emerald Development Managers. 

- Flipturn, a New York-based EV fleet operations platform, raised $4.5 million in seed funding. Accel led the round and was joined by Comma Capital and Background Capital. 

- Materials Nexus, a London-based deep tech company, raised £2 million ($2.59 million) in funding. Ada Ventures led the round and was joined by High-Tech Gründerfonds, The University of Cambridge, MD One Ventures, and others. 

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Acquisitions & PE: 

- Kering agreed to acquire a 30% stake in Valentino, the Italian fashion house, for €1.7 billion ($1.9 billion) in cash from Mayhoola, with the option to buy 100% by 2028. https://axios.link/44N7Imk

- Amazon (Nasdaq: AMZN) cut the acquisition price of iRobot (Nasdaq: IRBT), the Bedford, Mass.-based maker of robot vacuums, by 15% to about $1.42b. iRobot also raised $200m in debt from Carlyle. https://axios.link/3pYHNZU

- Public Storage agreed to acquire Simply Self Storage, an Orlando-based storage company, from Blackstone for $2.2 billion. 

- Banc of California, a Santa Ana, Calif.-based bank, and PacWest Bancorp, a Beverly Hills, Calif.-based bank, agreed to a merger. They also received a $400 million funding raise from Warburg Pincus and Centerbridge.

- Practice Better acquired That Clean Life, a Toronto-based nutrition planning software for health and wellness professionals. Financial terms were not disclosed.

- Full Glass Wine Co. acquired Winc.com, a Los Angeles-based direct-to-consumer wine membership club, from Amass Brands Group. www.winc.com

- FullBeauty Brands acquired Cuup, a New York-based intimates apparel company. https://axios.link/43DBWqz

- Lyft is considering a possible sale of its bike and scooter division, according to the WSJ. https://axios.link/3O4tH14

- The Green Bay Packers acquired Foamation, the Milwaukee-based foam cheese hat maker. https://axios.link/3DMpLNP

- Thales agreed to acquire Imperva, a San Mateo, Calif.-based cybersecurity company, from Thoma Bravo in a $3.6b deal. https://axios.link/3QaXhV2

- BC Partners agreed to sell a minority stake in PetSmart, a Phoenix-based chain of pet stores, to Apollo Global Management, though will remain a majority owner along with GIC. https://axios.link/43GMW6k

- Safran agreed to buy Raytheon Technologies' flight controls business in cash at an enterprise value of $1.8b. https://axios.link/44EnQ9y

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Funds:

- Goodwater Capital, a Burlingame, Calif.-based early-stage venture firm, raised $1b total for its fifth early-stage fund and third opportunity fund. https://axios.link/3QbScMk

- Prime Movers Lab, a Jackson, Wyo.-based venture capital firm, raised $245 million for a fund focused on early-stage investments in climate tech, space, semiconductors, and other sectors.

- Greycroft and the Coca-Cola Company raised $137.7m for a sustainability-focused fund from a number of Coca-Cola bottling companies, each contributing $15m. https://axios.link/475Eu3K

- Squadra Ventures, a Baltimore-based venture capital firm, raised $105 million for a fund focused on investing in early-stage cyber and national security companies.

- WEX Venture Capital, the investment arm of WEX, allocated $100 million for a fund focused on early-stage fleet electrification, EV charging, energy management and optimization, and adjacent technology companies. 

- Valhalla Ventures, a Los Angeles-based venture capital firm, raised $66 million for a fund focused on deep-tech and gaming. 

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I’ve seen this one before

Consumers are also falling out of love with an increasingly crowded streaming market. Not too long ago, the streaming landscape was simple and cost-effective. Amazon Prime came with its speedy delivery bonus, Netflix had a lot of what you wanted to watch, and Disney+ offered good value at $6.99 — less than the cost of a tub of popcorn at most movie theaters.

But the market has become fragmented. Companies have retreated behind their content walls — sharing nothing with other distributors. With prices on the rise and the introduction of advertising to try and re-invigorate growth, streaming services are starting to resemble the traditional cable industry that they once disrupted.

The golden age of all-you-can-eat entertainment for less than $20 a month is dead, and it has been for a while. And, with the strike action showing no signs of slowing down, content is unlikely to come any cheaper in future if writers, actors and producers get what they believe is their fair share of your monthly subscription. Netflix’s crackdown on password sharing, and its introduction of an ad-tier, are the early signs of things to come, as the industry matures and content deals get renegotiated.

Bundle, unbundle, rebundle

Indeed, it’s not hard to imagine a world in which the joke goes full circle — with some hot new company negotiating deals with everyone and offering bundled access to all of your favorite streaming services for, let's say $50-100 a month. They might even offer live content that you have to tune in for at a specific time, to create a sense of community with other viewers. In sport, that’s already happening, with Amazon, Apple and others picking up deals to stream live games.

As a whole, the entertainment industry is at a crossroads, and not just in TV and film — the music industry is at a similar juncture. Who really holds the keys to the kingdom? It used to be the cable companies and radio stations — the distributors. The internet changed that. Now, with the problem of distribution somewhat “solved” the tides seem to be shifting, gently, towards the actual artists, makers and actors. But, when billions are at stake, transitions of power are rarely orderly.

. . .

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.