Sourcery (8/1-8/5)
Softbank ~ PayIt, Parafin, Kurtosis, Mosey, Mudafy, NG.cash, Stride, Raincoat, Bounty, Makershub, Lami, Stackwell, Homeward, Aisera, Boatsetter, Arena AI, Fly.io, MarqVision, Ben, Vetted, Vori…
Happy August 9th
The first official day after my birthday, and 2 days before Masayoshi Son’s birthday (8/11). Another year! #LeoSzn
However, Masa isn’t having the best birthday this year.
If you haven’t seen these return charts yet, I’ll just let you take a look yourself: SoftBank Lost $39 Billion in 6 Months, Wiping Out the Bubble Gains of the Vision Funds Since 2017. Now trying to avoid “a blow that would be irreversible.” Yikes.
Not ideal. You can also watch the Monday briefing from Masa here.
What have we learned? Too much capital isn’t always a good thing. It can lead to reckless spending and hard to reach returns. This can apply both to funds and startups, and unfortunately this pattern will likely continue as the markets proceed to sort themselves out from the peak.
On the contrary, some funds intentionally manage their fund sizes by keeping them “small” and abide by stricter investment principles (like USV, Shine Capital, Benchmark, etc). Interestingly, Harry Stebbings recently spoke with Mo Koyfman from Shine Capital on his belief that “small funds always outperform large funds” on his recent 20VC podcast.
Reading Roundup:
The Math Behind Starting a Successful Software Startup, Tomasz Tunguz
The Michael Scott Economy, Ben Carlson
Trying to understand what is going on in the economy: record low unemployment amid a turbulent market
Is This a Bear Market Rally or Have We Passed the Bottom? Jamin Ball
Reflections on the Consumer Correction: A July Jump, Meera Clark
What’s next for Shopify? Dawit Heck
Do PE Acquisitions of Public Startups Imply We've Hit a Pricing Bottom? Tomasz Tunguz
Follow us on Twitter Linkedin for just the top deals recap
. . .
Last Week (8/1-8/5):
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 PayIt, Parafin, Kurtosis, Mosey, Mudafy, NG.cash, Stride, Raincoat, Bounty, Makershub, Lami, Stackwell, Homeward, Oui Therapeautics, Salvo Health, Carefeed, Aisera, Boatsetter, Arena AI, Fly.io, MarqVision, Ben, Vetted, Locket, Vori, Gym Class, Footprint, Humanloop, Clutch, Ruuf; Amazon/iRobot, Thoma Bravo/Ping Identity, Lemonade/Metromile, Pepsico/Celsius, Slingshot Aerospace; W3BCLOUD
Final numbers on Largest Private Markdowns at the bottom.
Deals
Sources: TS, Pro Rata, FinSMEs, Pitchbook, StrictlyVC
Fintech:
- PayIt, a Kansas City-based digital government services and payments platform, raised $90 million in funding from Macquarie Capital Principal Finance.
- Parafin, a San Francisco-based payment processor software developer, raised $60 million in Series B funding at a $520M valuation. GIC led the round and was joined by investors including Thrive Capital and Ribbit Capital.
- Savana, a Malvern, Pa.-based provider of customer engagement and account servicing software for banks and fintechs, raised $45m in Series A funding led by Georgian. www.savanainc.com
- Kurtosis, a Houston-based provider of crypto developer tools, raised $20m in Series A funding. Coatue led, and was joined by Coinbase Ventures, Mantis VC and Olivier Pomel. https://axios.link/3bpkpgV
- Mosey, a San Francisco-based employment and tax compliance platform, raised $18 million in Series A funding. Canaan led the round and was joined by investors including Gusto, SemperVirens, and Charge.
- Mudafy, a Latin America-focused real estate broker, raised $10m in Series A funding led by Founders Fund. https://axios.link/3Jnioy0
- NG.cash, a digital money management app focused on Brazil’s Gen Z, raised $10m co-led by Andreessen Horowitz and Monashees. www.ng.cash
- Stride, a New York-based multichain liquid staking protocol, raised $6.7 million in seed funding. North Island VC, Distributed Global, and Pantera Capital co-led the round and were joined by investors including Imperator, Cosmostation, Everstake, Staking Facilities, 1Confirmation, Cerulean Ventures, Node VC, Picus Capital, and Road Capital.
- Nano, a Vietnamese financial and benefits platform for low-income workers, raised $6.4m in seed funding. Openspace led, ad was joined by Partech, Tekton Ventures, KVision, IT Farma, Sketchnote Partners, Golden Gate Ventures, FEBE Ventures, FJLabs, Venturra, TO Ventures, ACE & Company and Goodwater Capital. www.viuapp.vn
- Raincoat, a Puerto Rico-based provider of white-labeled disaster insurance software, raised $4.5m in seed funding, per Axios Pro. Anthemis led, and was joined by SoftBank, Banco Popular, Divergent Capital and Consorcio. https://axios.link/3vzegVZ
- Bounty, a monetization service for TikTok creators, raised $4.7m in seed funding led by M13. https://axios.link/3Bz3SBz
- MakersHub, a San Francisco-based digital transaction and financing solution for manufacturing, raised $4.5 million in seed funding. TTV Capital led the round and was joined by investors including QED Investors, Canapi Ventures, Dash Fund, and Saluda Grade.
- Lami, a Kenyan digital insurer, raised $3.7m in new seed funding led by Harlem Capital. https://axios.link/3bmafh0
- Debt DAO, a crypto credit protocol, raised $3.5m in seed funding. Dragonfly Capital led, and was joined by GSR, Numeus and Fasanara Capital. https://axios.link/3zLQZmb
- Stackwell, a Boston-based digital investment platform focused on closing the racial wealth gap, raised $3.5m in seed funding co-led by Michael Gordon (Fenway Sports Group) and Jeremy Sclar (Kraft Group). www.stackwellcapital.com
- B9, an SF-based provider of payroll advances to the underbanked, raised $2.6m in seed funding led by Sky Light Invest, per Axios Pro. https://bit.ly/3POPv0g
. . .
Care:
- Homeward, a San Francisco-based health care provider to rural communities, raised $50 million in Series B funding. ARCH Venture Partners and Human Capital led the round and were joined by investors including General Catalyst and 7wireVentures co-founders Lee Shapiro and Glen Tullman.
- Atropos Health, a Palo Alto, Calif.-based physician consultation service, raised $14m in Series A funding, Breyer Capital led, and was joined by Emerson Collective and Boston Millennia Partners. www.atroposhealth.com
- Oui Therapeutics, a New Haven, Conn.-based digital therapeutic company for suicide, raised $11 million in Series A funding. Athyrium Capital, CVS Health, and Otsuka led the round and were joined by First Round Capital.
- Salvo Health, a New York-based digital gut health startup, raised $10.5m in seed funding. Threshold Ventures led, and was joined by Torch Capital and Felicis Ventures. www.salvohealth.com
- Cornerstone AI, a San Mateo, Calif.-based data analysis and health care research startup, raised $5m in seed funding. Healthy Ventures led, and was joined by Initiate Ventures. www.cornerstoneai.com
- Suvera, a British developer of patient management software, raised £5m in seed extension funding led by Morningside Ventures. https://axios.link/3bpnpJZ
- Carefeed, an Cincinnati-based digital communication platform for senior care, raised $3m in seed funding. Reformation Partners led, and was joined by Allos Ventures and M25. www.carefeed.com
. . .
Enterprise & Consumer:
- Klaviyo, a Boston-based e-commerce marketing automation company, raised $100m from Shopify (NYSE: SHOP). https://axios.link/3ONCPp2
- Talon Cyber Security, a Tel Aviv-based secure browser provider, raised $100 million in Series A funding. Evolution Equity Partners led the round and was joined by investors including Ballistic Ventures, CrowdStrike’s Falcon Fund, Merlin Ventures, SYN Ventures, CrowdStrike co-founder and CEO George Kurtz, Lightspeed Venture Partners, Sorenson Ventures, and Team8.
- Aisera, a Palo Alto-based service experience platform for automated employee and customer experiences, raised $90 million in Series D funding. The growth equity business within Goldman Sachs Asset Management and Thoma Bravo led the round and were joined by investors including True Ventures, Menlo Ventures, Norwest Venture Partners, Icon Ventures, Khosla Ventures, First Round Capital, Maynard Webb, Sherpalo Ventures’ Ram Shriram, and Silicon Valley Bank.
- Boatsetter, a Miami-based boat rental marketplace, raised $38 million in Series B funding. Level Equity led the round and was joined by Alexis Ohanian.
- Arena AI, a New York-based autonomous operating system platform provider, raised $32 million in Series A funding. Initialized Capital and Goldcrest Capital led the round and were joined by investors including Peter Thiel, General David Petraeus, Michael Siebel, and other angels.
- Fly.io, a Chicago-based application delivery network company, raised $25 million in Series B funding. Andreessen Horowitz led the round and was joined by investors including Dell Technologies Capital, Initialized Capital, PlanetScale CEO Sam Lambert, and Intel Capital.
- Axio, a New York-based cyber risk quantification solutions company, raised $23 million in Series B funding. ISTARI led the round and was joined by investors including Distributed Ventures, IA Capital Group, Axio chairman and former BP CEO Bob Dudley.
- MarqVision, an LA-based IP protection platform, raised $20m in Series A funding. DST Global Partners and Atinum Investments were joined by insiders SoftBank, Bass Investment and YC. https://axios.link/3zOl3hg
- Ben, a London-based employee benefits platform, raised $16 million Series A funding. Atomico led the round and was joined by investors including Cherry Ventures, DN Capital, Seedcamp, and others.
- Vetted, an SF-based product search engine, raised $15m in Series A funding. Insight Partners led, and was joined by Index Ventures, Bling Capital and Golden Ventures. https://axios.link/3P13C1q
- Kompliant, a Boise, Idaho-based risk scoring platform, raised $14m in seed funding led by Level One Fund. https://axios.link/3PODGY3
- Locket, an app for sharing photos on homescreens, raised $12.5m. Sam Altman led, and was joined by Sugar Capital, Costanoa Ventures, Mike Krieger and Adam D’Angelo. https://axios.link/3ztIpqP
- Vori, a East Palo Alto, Calif.-based digital B2B inventory management platform, raised $10 million in Series A funding. The Factory led the round and was joined by investors including Greylock, E2JDJ, MKT1, and Mollie Stone’s Markets.
- Geomiq, a London-based manufacturing as a service platform, raised $8.5 million in Series A funding. AXA Venture Partners led the round and was joined by investors including TechNexus Venture Collaborative, Samaipata, and Fuel Ventures.
- Peech, an Israeli video-editing AI for brands, raised $8.3m in seed funding. Ibex Investors led, and was joined by Cardumen Capital and Fresh Fund. www.peech-ai.com
- Gym Class, a Los Angeles-based VR basketball app, raised $8 million in seed funding. Andreessen Horowitz led the round and was joined by Y Combinator.
- Smarter Sorting, an Austin, Texas-based circular commerce data startup, raised $7m in Series A extension funding from Regeneration.VC, per Axios Pro. https://axios.link/3zMH8g9
- Footprint, a New York-based identity verification platform, raised $6 million in seed funding. Index Ventures led the round and was joined by investors including BoxGroup, Operator Partners, Lerer Hippeau, Palm Tree Crew, Not Boring Capital, K5, and others.
- Spinach.io, a Nashville-based startup focused on meetings efficiency for remote teams, raised $6m from YC, Zoom Ventures, Maven Ventures, Tuesday Capital and Cardumen Capital. www.spinach.io
- FeatureByte, a Boston-based AI for feature engineering and management, raised $5.7m in seed funding co-led by Glasswing Ventures and Tola Capital. www.featurebyte.com
- MakersHub, an SF-based order flow management startup focused on manufacturers, raised $4.5m in seed funding led by TTV Capital, per Axios Pro. https://axios.link/3zPiUSy
- Humanloop, a London-based machine learning and natural language processing integration company, raised $2.6 million in seed funding. Index Ventures led the round and was joined by investors including Y Combinator, LocalGlobe, and Albion.
- Clutch, a Houston-based digital marketplace company, raised $1.2 million in pre-seed funding. Precursor Ventures led the round and was joined by investors including Capital Factory and HearstLab.
. . .
Sustainability:
- Ruuf, a Santiago, Chile-based solar power marketplace, raised $1 million in seed funding. Positive Ventures and Collaborative Fund co-led the round and were joined by investors including Harvard Business School Rock Center Accelerator, Harvard Innovation Labs, and Chile's Former Minister of Energy Juan Carlos Jobet .
Acquisitions & PE:
- Amazon (Nasdaq: AMZN) agreed to buy Roomba maker iRobot (Nasdaq: IRBT) for $1.7b in cash, or $61 per share (22% premium to yesterday's closing price). This is further indication that Big Tech has relatively little fear of U.S. antitrust regulators, despite the FTC's recent decision to sue Meta over its Within Unlimited purchase.
- Thoma Bravo agreed to buy Ping Identity (NYSE: PING), a Denver-based authentication software company, for around $2.8 billion. Sellers would include Vista Equity Partners, which took Ping public in 2019 and currently holds just under a 10% stake. Expect this to be just the tip of the spear when it comes to private equity carousel deals, in which PE-backed companies that IPO'd during the bull run are returned to private hands. It also suggests that Thoma Bravo isn't suffering too much blowback from repricing its Anaplan buyout. Thoma Bravo will pay $28.50 per share, a 63% premium over yesterday's closing price but still less than where Ping traded as recently as April 14. Ping also reported Q2 earnings this morning, with revenue coming in just below analyst expectations.
- Netskope, a Los Altos, Calif.-based cloud access security company valued by VCs at $7.5b, acquired Infiot, a San Jose, Calif.-based remote access startup that raised around $19m from firms like WestWave Capital and Neotribe Ventures. https://axios.link/3PNwbjX
- Paystand, a Scotts Valley, Calif.-based B2B payments firm, acquired Mexico City-based accounts payable startup Yaydoo, per Axios Pro. Paystand has raised $85m from firms like Serra Ventures, BlueRun Ventures and NewView Capital, while Yaydoo raised a $20m Series A round co-led by Base10 Partners and Monashees. https://axios.link/3Sk4y3F
- Gryphon Investors acquired Rootstock, a San Ramon, Calif.-based provider of enterprise resource planning software. www.rootstock.com
- Lemonade (NYSE: LIMD) completed its all-stock purchase of Metromile (Nasdaq: MILE), which originally was valued at around $500m net of cash but ended at just $145m. Around 20% of MetroMile staff was subsequently laid off. https://tcrn.ch/3oFZ19R
- PepsiCo acquired an 8.5% stake in Celsius, a Boca Raton, Fla.-based energy drink maker, for $550 million.
- UiPath acquired Re:infer, a London-based natural language processing company for unstructured documents and communications. Financial terms were not disclosed.
- Envoy, an SF-based flexible workspace platform, acquired OfficeTogether, an SF-based desk reservation and scheduling startup seeded by such firms as Defy Ventures, January Ventures and 2.12 Angels. Envoy earlier this year raised $111m in Series C funding led by Brookfield Growth. www.envoy.com
- Neon, the film studio whose titles have included “Parasite” and “I, Tonya,” hired Raine to explore a full or partial sale, per the NY Times. https://axios.link/3cRxW0O
- Slingshot Aerospace acquired Numerica’s Space Domain Awareness division, a Colorado Springs and Fort Collins, Colo.-based optical sensor network for satellite tracking, and Seradata, a Northampton, U.K.-based satellite database and space market analytics company. Financial terms were not disclosed.
- Signify Health (NYSE: SGFY), a Dallas-based health tech company with a market cap north of $4b, is considering strategic alternatives that could include a sale, per the WSJ. https://axios.link/3bvnBav
- Uber (NYSE: UBER) sold its 7.8% stake in listed Indian food delivery firm Zomato for around $390m via a block trade. https://axios.link/3d2n54k
- Deel, an SF-based workforce management firm valued by VCs at $12b, acquired Legalpad, a Seattle-based provider of legal support for navigating the U.S. visa and immigration system. Legalpad had raised $10m from firms like Amplo and Gaingels. https://axios.link/3Qjgqkx
. . .
IPOs:
Nothing to see here…
. . .
SPACs:
- W3BCLOUD, an Irish storage and compute infrastructure provider for web3, agreed to go public at an implied $1.25b valuation via Social Leverage Acquisition Corp I (NYSE: SLAC), a SPAC co-led by Howard Lindzon. www.w3bcloud.com
- Plastiq, an SF-based B2B payment platform for SMBs, agreed to go public at an implied $480m valuation via Colonnade Acquisition Corp. II (NYSE: CLAA), a SPAC led by real estate execs Joseph Sambuco and Remy Trafelet.Plastiq has raised over $144m in VC funding, most recently at a $575m post-money valuation in 2019, from Khosla Ventures, Lionfish Capital, TriplePoint Capital, Twelve19 Ventures, Accomplice, Saints Capital, Flight Ventures, Top Tier Capital Partners, Kleiner Perkins, Founders Circle Capital, Alumni Ventures Group, Congress Avenue Ventures, Parade Ventures, CE Innovation Capital and Bling Capital. www.plastiq.com
- ZeroFox, a Baltimore-based provider of social media monitoring solutions, today will begin trading on the Nasdaq (ZFOX) after completing its $1.4b merger with L&F Acquisition Corp. (NYSE: LNFA). It also simultaneously acquired IDX, a provider of data breach response services, and previously had raised around $230 million from firms like Highland Capital Partners, NEA, Redline Capital Management, Intel Capital, Doorga Capital and Hercules Capital.
Funds:
- VMG Catalyst raised $400m for a new VC fund focused on supply chain tech for retail and consumer brand businesses. https://axios.link/3bwoxvu
- Aglaé Ventures, the French firm backed by LVMH CEO Bernard Arnault, is launching a €100m crypto fund, per The Block. https://axios.link/3JpUG4c
Private vs Public Share Drops
Interestingly, not all companies are having a bad year on the secondary market. Shares of blockchain technology solutions company ConsenSys, which had raised a whopping $450 million in venture funding at a $7.1 billion valuation in March, are trading nearly 57% above what they were at the beginning of this year, per ApeVue data. And shares of Elon Musk’s SpaceX, which is reportedly seeking to raise $1.7 billion in capital, are up 16.8%, according to the data. You can’t say as much for the other 13 most actively traded companies—namely Klarna, Kraken, Stripe, and Bolt.
I’ll add that not all sectors are created equal, as you can see from these sector-specific ApeVue indices:
The data isn’t perfect: Not all private companies are actively traded on the secondary market, and ApeVue doesn’t pull share prices on companies where less than $1 million worth of shares are exchanging hands. But it’s still a worthwhile indicator of what things are looking like under the hood, which is this: Still bad.
The graph below shows the 15 largest VC markdowns in dollar terms through July 26, ranking the startups according to both percentage and dollar declines.
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.
Happy Birthday Molly.!!!!!!!!!! I hope you enjoy it. Have a great one. You deserve it cause you truly are a wonderful person.