Sourcery → Global Risks, TSMC, Rocketships
Sourcery → Global Risks, TSMC, Rocketships
(4/1-4/5) Techno-Optimists, Chips, Rocketships; Varda, Flip, Aerospike, Homebase, Home From College, Modal, InStride Health, Manifold, Pigment, Ellipsis Labs, Proxima, Burnbot; ServiceTitan/Convex
Links, Links, Links
A lot of resources to share this week, but to start, let’s go to El Segundo...
Rockets, God and Peter Thiel: 36 Hours in the Gundo, Tech’s Latest Startup Haven [The Information]
As someone who is certainly too nerdy for LA’s core pop culture.. I don’t often get starstruck with celebrities, but when Peter Thiel casually strolled into our circle, I think I forgot how to speak english for about 3 minutes. Anyways, super awesome gathering, & amazing growing crew of Founders & Investors in El Segundo!
This piece captures the history, energy, and enthusiasm down in new the epicenter of Tech quite well. An impressive amount of progress from the teams building there in the short time since our LA HardTech series highlighted the early innings over the summer:
The New Epicenter of US Tech & VC Funding Pt. II (Intro to LA HardTech w/ Xander of Commodity Capital)
Recent LA HardTech Fundings:
Hadrian, $117M Series B, from investors RTX Ventures, Construct Capital, WCM, Bracket Capital, Shrug Capital, Lux Capital, a16z, Founders Fund, S&A, Silent Ventures, Cubit Capital, Caffeinated, & Tru Arrow Partners.
Varda $90M Series B, led by Caffeinated Capital, with participation from Lux Capital, General Catalyst, Founders Fund & Khosla Ventures.
Cambium, $19M in Series A, led by 8VC, with participation from Veteran Ventures, GSBackers, Marlinspike, MVP Ventures, Gaingels, Kern Venture Fund, Jackson Moses (Founder, Silent Ventures), & Vertical Capital
Picogrid, $12M Seed, led by Initialized Capital with participation from Starburst Ventures, Credo Ventures, Giant Step Capital, Domino Ventures, & Alumni Ventures
Musings
Macro
Global Risks Report 2024 [World Economic Forum]
Resharing these not-so-great statistics highlighting the global risks in extreme weather, societal polarization, economic strain, geopolitical tensions.. etc. However, where there is risk, there are crazy geniuses willing to run into the fire to save humanity, and investors not far behind. Luckily we’re living in a time of rapid innovation & technological progress to help better quantify, predict, prevent, and hopefully turn this madness around quicker.
Still a little surprised ‘Misinformation & Disinformation’ is #1 for the short term (next 2 year), but makes sense considering the upcoming election & GenerativeAI.. X & independent journalists on the rise!
AI
Full Steam Ahead: The 2024 MAD (Machine Learning, AI & Data) Landscape [Matt Turck, FirstMark]
AI is a bad biz model but can be a great GTM for better ones - software, platforms, and marketplaces [Yoni Rechtman, Slow Ventures]
What MidJourney, DeepL, ElevenLabs, and HeyGen have in common (besides special teams and explosive growth!) [Sarah Tavel, Benchmark]
Open Source
Open-Source AI Agents Are Moving Full Steam Ahead, Cognition Labs Devin vs Princeton Researcher’s SWE-Agent [Ark Invest]
SaaS
Rubrik: Benchmarking the S-1 Data [Clouded Judgement, Jamin Ball]
Rubrik S-1 - Burning the Boats in Data Security [Tomasz Tunguz]
At $784m in ARR, growing 47% with 130% net revenue retention across 6100 customers, the company should be one of top 10 fastest growing software companies alongside Klaviyo, ZScaler, & Crowdstrike - in ARR terms. Half of new customers are over $100,000 in size & contract values have grown 19% from $101k to $120k in a year. 41% of new bookings derives from those new customers.
As deal rumors fly, Alphabet and HubSpot would be a strange pairing [TechCrunch]
HardTech
TSMC's CHIPS Act Money [Asianometry
]The US plans to award Taiwan Semiconductor Manufacturing Co. $6.6 billion in grants and as much as $5 billion in loans to help the world’s top chipmaker build factories in Arizona, expanding President Joe Biden’s effort to boost domestic production of critical technology.
The argument for humanoid robots with Brett Adcock from Figure [No Priors, Sarah Guo]
CoreWeave’s Brannin McBee on the future of AI infrastructure, GPU economics, & data centers [TWIS]
Regulation Can Kill Innovation, New Research On The Nuclear Industry + EV Battery Costs Have Declined Significantly [Ark Invest]
New Shepard’s 25th Mission Includes America’s First Black Astronaut Candidate [Blue Origin]
Techno-Optimists
The Glass-Half War: Empty or Full? [Investing 101, Kyle Harrison]
April Fool's, The Optimist's Christmas + Learning Is Good, Actually
Leading the techno-optimist way, a recipe: (1) tell new stories, (2) reframe existing stories, and (3) fix the stories that no one wants to tell
Morgan Housel: Understanding Elon Musk, Jensen Huang and Other Outliers in Tech [Sourcery]
VC
Trae Stephens: Why No Company is Successful Because of their VC [20VC]
Tiger Global Closes $2.2B Fund 63% Below Target [FT]
. . .
Last Week (4/1-4/5):
Relevant deals include the 60+ deals across stages below.
I've categorized the deals below into five categories, FinTech, Care, Enterprise & Consumer, HardTech, and Sustainability, and ordered from later-stage rounds to early-stage rounds.
Highlighted deals include Varda, Flip, Aerospike, Homebase, Home From College, Modal, InStride Health, Manifold, Pigment, Ellipsis Labs, Proxima, Burnbot; ServiceTitan/Convex, Silver Lake/Endeavor, IXL Learning/Dictionary.com + Thesaurus.com; Zapata AI
Final numbers on Q1 2024 Venture Activity at the bottom.
Deals
Fintech:
- Pigment, Paris, France business planning platform, raised $145M in Series D funding led by ICONIQ Growth with participation from Sandberg Bernthal Venture Partners, IVP, Meritech, and others.
- Brim Financial, Toronto, Canada provider of a credit-card-as-a-service platform to banks and large enterprises, raised $85M in Series C funding led by EDC Investments with participation from Vistara Growth and existing investors White Owl Group, Epic Ventures, and Zions Bank.
- Ellipsis Labs, New York, NY developer of the Phoenix decentralized exchange, raised $20M in Series A funding led by Paradigm with participation from Electric Capital.
- ValidMind, Palo Alto, CA AI and model risk management platform for financial services, raised $8.1M in seed funding led by Point72 Ventures with participation from Third Prime, New York Life Ventures, AI Fund, Notion Capital, FJ Labs, Angel Invest, and Gaingels.
- Station 70, a crypto recovery and backup startup, raised $5m in seed funding led by Castle Island
- Lockchain.ai, Athens, GA blockchain risk management platform, raised $4.6M in seed funding led by Lerer Hippeau with participation from Arrington Capital, Valhalla Ventures, ARCA, and others.
. . .
Care:
- Biolinq Incorporated, San Diego, CA developer of a wearable glucose sensor for diabetes, raised $58M in funding led by Alpha Wave Ventures.
- InStride Health, Boston, MA outpatient provider of specialty pediatric anxiety and OCD treatment, raised $30M in Series B funding led by General Catalyst with participation from .406 Ventures, Valtruis, Mass General Brigham Ventures, and Hopelab Foundation.
- EarliTec Diagnostics, Decatur, GA FDA-authorized tool designed to help doctors diagnose and assess autism and other early childhood vulnerabilities in children aged 16 months to 30 months, raised $21.5M in Series B funding from Nexus NeuroTech Ventures and Venture Investors Health Funds.
- Manifold, Newton, MA AI-powered clinical research platform, raised $15M in Series A funding led by TQ Ventures with participation from Calibrate Ventures, SK Ventures, and others.
- Nucleai, Chicago, IL and Tel Aviv, Israel-based AI-powered spatial biomarker company, raised $14M in funding led by M Ventures.
- Aligned Marketplace, Park City, UT membership platform that gives employees of self-insured employers access to a network of primary care providers, raised $8 million in seed funding led by A* Capital and Maverick Ventures with participation from Box Group, EPIC Ventures, Liquid2 Ventures, and SV Angel.
. . .
Enterprise & Consumer:
- Flip, Los Angeles, CA social app where users can watch and post product reviews, raised $144M in Series C funding led by Streamlined Ventures with participation from Mubadala Capital, WestCap, and a $50 million investment from new investor AppLovin (NASDAQ: APP).
- Sumeru Equity Partners invested $109M in Aerospike, a Mountain View, CA AI database platform.
- Homebase, San Francisco, CA HR and team management app designed for hourly teams at small businesses, raised $60 million in Series D funding led by L Catterton Growth with participation from Emerson Collective and existing investors Notable Capital, Bain Capital Ventures, Khosla Ventures.
- Luminance, London, U.K. large language model designed to generate, negotiate, and analyze legal documents, raised $40 million in Series B funding led by March Capital with participation from National Grid Partners and others.
- Modal, San Francisco, CA skills development platform for data and analytics professionals, raised $25M in Series A funding led by Left Lane Capital and Ensemble VC with participation from Signalfire and Learn Capital.
- OROS Labs, Portland, OR developer of thermal insulation technology for clothing, raised $22M in Series B funding led by Airbus Ventures with participation from REI Co-op Path Ahead Ventures, Platinum Mile Ventures, Culper Ventures, Crumpton Ventures, Iron Gate Capital Advisors, and others.
- Datavolo, Peoria, AZ multimodal data pipeline startup, raised $21M in funding led by General Catalyst with participation from Citi Ventures, Human Capital, Rob Bearden, and MVP Ventures.
- Read AI, Seattle, WA provider of AI-generated meeting, email, and messaging summaries, raised $21 million in Series A funding led by Goodwater Capital with participation from Madrona Venture Group.
- Permiso, Palo Alto, CA threat detection company for cloud-based environments, raised $18.5M in Series A funding led by Altimeter Capital with participation from Point72 Ventures.
- Full Glass Wine, Los Angeles, CA acquirer of direct-to-consumer wine businesses, raised $14M in Series A funding from Shea Ventures and acquired Bright Cellars, a Milwaukee, WI subscription-based wine service. Financial terms were not disclosed.
- Proxima, a New York-based marketing tech platform, raised $12M in Series A funding led by Mucker Capital led, and was joined by Aglae Ventures, Great Oaks Venture Partners, Data Point Capital, Broadway Venture Partners, FirstLook Partners, and Connexa Capital.
- Scrut Automation, Milpitas, CA governance, risk, and compliance platform for mid-market companies, raised $10M in funding from existing investors Lightspeed, MassMutual Ventures, and Endiya Partners.
- LUCKY F*CK, Austin, TX sugar-free energy drink company, raised $8M in seed II funding led by Brand Foundry Ventures with participation from Imaginary Ventures and Sugar Capital.
- Quadratic, Boulder, CO data science spreadsheet platform, raised $5.6M in seed funding led by GV (Google Ventures) with participation from Catapult Ventures, Betaworks, The Fund Rockies, and angel investors.
- SiftHub, San Francisco, CA AI knowledge platform designed for sales and presales teams, raised $5.5 million in seed funding led by Matrix Partners India and Blume Ventures with participation from Neon Fund and others.
- Home From College, Los Angeles, CA platform designed to connect college students with professional opportunities, raised $5.4 million in seed funding led by GV (Google Ventures) with participation from PEAK6 and Black Angel Group.
- Higgsfield AI, San Francisco, CA AI-powered video generation app, raised $8M in seed funding led by Menlo Ventures with participation from Charge Ventures, Bitkraft Ventures, K5 Tokyo Black, and others.
- Ivo, San Francisco, CA developer of AI-powered legal contract review technology, raised $4.8M in funding led by Uncork Capital and Fika Ventures with participation from Daniel Gross, GD1, and Phase One Ventures.
- Delivery Collective, San Francisco, CA delivery platform designed to connect restaurants and other merchants to customers without the need for third-party middlemen, raised $3.8M in funding led by defy.vc and Bling Capital with participation from Pathbreaker Ventures, GTM Fund, and 640Oxford Ventures.
- Lil Snack, Los Angeles, CA developer of daily online games based on pop culture trends, raised $3.1M in funding from Lerer Hippeau, Waverly Capital, A16Z GAMES SPEEDRUN, and Powerhouse Capital.
. . .
HardTech:
- Varda Space Industries, El Segundo, CA the world's first in-space manufacturing and hypersonic Earth re-entry logistics company raised a $90M Series B round led by venture firm Caffeinated Capital, with participation from Lux Capital, General Catalyst, Founders Fund and Khosla Ventures. The company has raised $145M to date.
- SiMa.ai, San Jose, CA developer of generative AI chips for edge computing devices like smartphones, autonomous vehicles, and smart appliances, raised $70M in funding led by Maverick Capital with participation from Point72, Jericho, Amplify Partners, Dell Technologies Capital, and others.
- Torus, South Salt Lake, UT manufacturer of energy storage and management products for the residential, commercial, and large-scale utility sectors, raised $67M in funding led by Origin Ventures with participation from Epic Ventures, Cumming Capital, the Larry H. Miller Company, Zions Bank, Pelion, and ICONIQ.
- Seso, San Francisco, CA workforce management platform designed specifically for agriculture businesses, raised $26M in Series B funding led by BOND with participation from Index Ventures, NFX, SV Angel, and others.
. . .
Sustainability:
- Alsym Energy, a Woburn, MA developer of rechargeable batteries for stationary storage, marine, and electric vehicles, raised $78M in funding led by Tata Limited and General Catalyst with participation from Thrive Capital, Thomvest, and Drads Capital.
- BurnBot, San Francisco, CA developer of mechanized vegetation management, fuel treatment solutions, and other technology designed to prevent wildfires, raised $20M in funding led by ReGen Ventures with participation from Toyota Ventures, AmFam Ventures, Convective Capital, Blue Forest Asset Management, and others.
Acquisitions & PE:
- ServiceTitan, a tradesperson software firm valued by VCs at around $7B, agreed to buy Convex, a sales and marketing platform for commercial services. Convex had raised over $70M from firms like Notable Capital, Realm Capital Ventures, Fifth Wall, GGV Capital, and a16z.
- Silver Lake agreed to take Endeavor Group Holdings (NYSE: EDR), a Beverly Hills, CA talent and entertainment agency, private for $13B.
- Blue Yonder agreed to acquire One Network Enterprises, a Dallas, TX developer of an AI-powered supply change management platform, for $839M.
- Advent International agreed to take Nuvei Corporation (NASDAQ: NVEI), a Montreal, Canada payments processor, private for approximately $6.3B.
- Vallen Distribution, a portfolio company of Nautic Partners, acquired Wesco Integrated Supply, a Uniondale, NY provider of industrial maintenance, repair, and operations supply chain solutions, from Wesco International (NYSE: WCC), for $350M.
- Cadent, backed by Novacap, agreed to acquire AdTheorent (NASDAQ: ADTH), a New York, NY provider of machine learning solutions for advertising and marketing, for approximately $324M.
- Blue Sage Capital acquired a majority stake in American Alloy, a Spokane, WA manufacturer of metal components and subassemblies for original equipment manufacturers in the packaging, food, beverage, and other industries. Financial terms were not disclosed.
- IXL Learning acquired Dictionary.com, an Oakland, CA online English-language dictionary, and Thesaurus.com, a Oakland, CA online thesaurus. Financial terms were not disclosed.
- Elevation Labs, backed by Knox Lane, acquired Boomerang Labs, a Spring Park, Minn.-based provider of formulation and manufacturing services to beauty and personal care brands. Financial terms were not disclosed.
. . .
IPOs:
- Loar Holdings, a White Plain, NY manufacturer of niche components for aircraft and aerospace and defense systems, filed to go public on the New York Stock Exchange. The company posted $317M in revenue for the year ending December 31, 2023. Abrams Capital Management, GPV Loar, Blackstone Alternative Credit Advisors, Dirkson Charles, and Brett Milgrim back the company.
. . .
SPACS:
- Zapata AI, a Boston-based provider of "industrial generative AI" solutions, saw shares fall by as much as 54% in their market debut, after going public via a SPAC co-led by race car driver Michael Andretti. Zapata AI had raised over $60M in VC funding from firms like Comcast Ventures, Pitango, Prelude Ventures, The Engine, Pillar, BASF VC, Itochu, and Honeywell.
Funds:
- Arctos raised $4.1B for its second pro sports fund.
- Tiger Global raised $2.2b for its 16th private markets fund, falling well short of its $6b target
Final Numbers
Source: PitchBook; Chart: Axios Visuals
Venture capitalists disbursed $36.6B into 2,882 U.S. startups during the first quarter of 2024, per an early look at the upcoming PitchBook/NVCA Venture Monitor.
That's a a 9% dip from the prior quarter and a whopping 29% decline from one year earlier.
It was the slowest first quarter for U.S. venture deals since 2018.
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