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Fintech Startups Could Be on the Road to Recovery
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By Marc Vartabedian, WSJ Pro
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Good day. The battered financial technology sector could see better days ahead, according to one report.
“Like a boxer on the ropes, fintech companies have endured a valuation pummeling that has likely tested the resolve of many founders,” private-shares trading platform Forge Global said in a report this month. “However, there are signs that investors’ fintech aversion may be abating.”
Forge’s basket, which tracks the valuation performance of 13 private fintech companies picked to serve as a sector barometer, rose sharply this year through March before leveling off through the end of May.
While fintech valuations are still below 2020 and 2021 levels, Forge said it expects a further boost from recent initial public offering activity in the sector. For instance, Chime Financial’s public listing this month has provided a tailwind, the report said. A future listing by buy now, pay later giant Klarna, which has put its IPO on hold, could provide another bonus, Forge said.
“Investors appear to be encouraged by the burgeoning IPO pipeline, which has helped push valuations higher and create fintech buzz,” Forge’s report said.
Top venture investors have also shown interest in the sector. Last week, Accel led a $10 million seed round into online payments infrastructure company Polar. Accel partner Andrei Brasoveanu said in announcing the deal that a new crop of early-stage artificial intelligence startups will put Polar’s monetization platform in high demand.
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And now on to the news...
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PHOTO: NATHAN HOWARD/REUTERS
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Proposed tax bill. A tax on foreign investors in the Trump administration’s proposed tax bill is already causing European and Asian investors to rethink their investments in U.S. private capital funds, WSJ Pro reports.
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Some European investors have delayed signing subscription documents, the legal agreements that cement their commitments to these investment pools, as they consider “whether to take the squeeze” of the added tax burden should Section 899 of the bill be signed into law in its current form, said Richard von Gusovius, global co-head of distribution at Campbell Lutyens, a fundraising and secondary adviser operating in Europe, North America and Asia.
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“Section 899 went from a sleepy idea to Defcon1 for folks in the investment community,” said a senior lobbyist for the private finance industry, referring to a term that indicates the highest state of U.S. military readiness. “Even the potential for attacks like this has a chilling effect on capital flows into the U.S.”
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$9 Million+
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Goldman Sachs and BlackRock are first movers in providing top executives unconnected to alternative investments with a pay perk common in private-equity firms. Goldman led the pack, giving those executives more than $9 million in investment profits, or carry, this year.
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Tesla’s Robotaxis Are Here: Everything You Need to Know
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Tesla rolled out its long-awaited robotaxi service in Austin, Texas, on Sunday, opening the electric-vehicle maker to the growing autonomous ride-hailing market, where its technology will be put to the test against market leader Waymo. Chief Executive Elon Musk has said the company will start small, with as many as 20 Tesla Model Ys driving on public roads, before expanding the service based on the technology’s performance. The Wall Street Journal explains what to know about Tesla’s robotaxi service.
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Zuckerberg Leads AI Recruitment Blitz Armed With $100 Million Pay Packages
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Mark Zuckerberg is spending his days firing off emails and WhatsApp messages to the sharpest minds in artificial intelligence in a frenzied effort to play catch-up, The Wall Street Journal reports. He has personally reached out to hundreds of researchers, scientists, infrastructure engineers, product stars and entrepreneurs to try to get them to join a new Superintelligence lab he’s putting together. And Meta’s chief executive isn’t just sending them cold emails. Zuckerberg is also offering hundreds of millions of dollars, sums of money that would make them some of the most expensive hires the tech industry has ever seen. In at least one case, he discussed buying a startup outright.
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Seekr Technologies, a Reston, Va.-based developer of software infrastructure to build, train and deploy generative AI models and agents, is raising a $100 million funding round at a $1.2 billion valuation led by Danu Venture Group and AMD Ventures.
Fleet, a San Francisco-based open device management platform for IT and security teams, landed $27 million in Series B funding. Ten Eleven Ventures led the round, with Operating Partner Scott Lundgren joining the company’s board.
Arima Genomics, a cancer diagnostics startup, closed a $22 million Series C round led by Illumina Ventures. The company also appointed Tom Willis as chief executive officer.
Profound, a New York-based startup helping brands understand, improve and measure how they appear in AI-powered search results, secured $20 million in Series A funding led by Kleiner Perkins.
Veda, a New York-based startup enabling crypto applications, asset issuers and protocols to build enterprise-grade cross chain yield products, picked up an $18 million investment led by CoinFund.
COVR Global, a London-headquartered insurtech startup, was seeded with a $2.5 million investment led by MTech Capital.
YieldClub, a Washington, D.C.-based crypto savings app, collected a $2.5 million pre-seed funding round from investors including Pharsalus, Flex Capital and The House Fund.
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ILLUSTRATION: EMIL LENDOF/WSJ, TESLA, ISTOCK
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Reddit in talks to embrace Sam Altman’s iris-scanning Orb to verify users (Semafor)
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A tale of two cities in venture capital (Forbes)
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