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Startups Go Back to Crypto School
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Good day. If the recent bankruptcies of FTX and BlockFi have rattled investors, they don’t seem to have dampened the spirits of many would-be crypto startup founders.
Andreessen Horowitz this year received more than 8,000 applications for its crypto startup school accelerator program, which kicks off in early 2023, a spokesman confirmed Friday.
The program, launched three years ago, offers budding crypto entrepreneurs a multiweek crash course in the fundamentals of crypto networks, blockchain and cryptography, app-development tools, crypto business models and a guide to fundraising, among other topics.
From the beginning, it has also included a deep dive into governance and the regulatory landscape—areas most high-profile crypto startup investors likely hope a16z’s students take to heart.
While investors are still backing nascent crypto startups, the pace of funding deals is far from the frenzy of 2021. The world’s top 15 venture capital firms, as identified by PitchBook Data Inc., invested only $879 million in crypto startups across 24 deals in the third quarter, down from a peak of $2.3 billion across 33 deals in the first quarter of 2021, the market data firm said.
So what advice do investors have for budding crypto-startup founders? Stay away from arcane trading apps and esoteric financial instruments, said Alex Tapscott, managing director of the digital asset group at crypto investor Ninepoint Partners LP: “My suggestion to them is to focus on building products that regular people want and need and can understand,” Mr. Tapscott said.
And now on to the news...
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Foxconn recently made a private investment in electric-vehicle maker Lordstown Motors.
PHOTO: QUINN GLABICKI/REUTERS
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‘Bespoke’ financing. The end of the era of easy money is forcing companies that need cash to get creative, The Wall Street Journal reports. Dozens of companies have recently raised money through so-called structured private funding rounds, and bankers and lawyers say there are many more in the works. A number of companies with depressed stocks and limited access to traditional financing are doing so, often adding sweeteners like extra dividends or preferred-note status to lessen the risk and make the deals more attractive for investors.
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Private companies, many growing fast but with limited cash flow and their plans for initial public offerings on hold, are seeking funds that will help them reach profitability. And they are structuring the deals to avoid the dreaded “down round.”
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Creative deal-making among private companies has helped push U.S. venture-capital investment activity to $195 billion this year through Sept. 30, higher than all other prior full years except 2021, according to PitchBook Data Inc.
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$92
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Last year children 12 to 17 spent an average of $92 a month online, more than double the average from two years earlier, estimates Forrester Research. Most of that was on videogames and virtual goods.
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Clashes Over FTX Bankruptcy Go Global
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The collapse of cryptocurrency exchange FTX has opened a hornet’s nest of squabbles between foreign governments and its new U.S. chief executive John J. Ray III, WSJ reports. In Cyprus, the country’s securities regulator is complaining that Mr. Ray’s decision to place the FTX in bankruptcy has stymied investigations and is preventing European customers from getting their money back. Officials in the Bahamas, where FTX moved its headquarters last year, are accusing Mr. Ray of making false statements and suggesting that his team is motivated by the prospects of earning hefty legal fees. In Turkey, authorities have seized the assets of FTX’s local subsidiary, an affront to Mr. Ray’s efforts to
sweep FTX’s assets into the chapter 11 process in Delaware.
More:
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Business-Software Companies Say Customers Are Pulling Back
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Business-software companies say customers are being more cautious with their spending in response to a challenging economy, adding to the tech industry’s list of concerns, WSJ reports. Customers for companies such as Salesforce Inc., Okta Inc. and CrowdStrike Holdings Inc. are taking longer to sign deals, and in some cases slowing their hiring plans as they try to protect their bottom lines, the software providers reported this past week. That trend has created a cloudy outlook for many in the once-booming business-software sector, which benefited from years of demand as customers looked to use the products to trim costs and maintain their businesses during the
pandemic.
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Canada Pushes Canadian Content, Irking Big Tech
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Google parent Alphabet Inc., Facebook owner Meta Platforms Inc. and Bytedance Ltd., TikTok’s owner, are pushing back against a proposal in Canada that would force digital platforms to more prominently feature Canadian content and compensate news outlets, WSJ reports. The new rules, championed by Canadian Prime Minister Justin Trudeau, would require reworking existing algorithms so that if a person in Canada searched on YouTube, the results would display videos mostly from Canadian artists ahead of foreign or U.S.-made content. The proposed legislation would also obligate the digital-media companies to make annual payments for Canada’s artistic community. Officials have
estimated the payments could total roughly 1 billion Canadian dollars, or the equivalent of $750 million.
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People
Vaxxas, a biotechnology company commercializing a new vaccination platform, said it appointed Doug Cubbin as its chief financial officer. Most recently, Mr. Cubbin was group chief financial officer at biopharmaceutical company Telix Pharmaceuticals Ltd. Vaxxas, which is seeking to enhance the performance of existing and new vaccines with its high-density microarray patch, said it is targeting initial applications in infectious disease and oncology.
Deals
Venture-backed biotechnology company Gadeta B.V. said it has formed a partnership with publicly traded biotech company Immunocore Holdings PLC to develop gamma delta T cell therapies for solid tumors, including colorectal cancer. Investors in Netherlands-based Gadeta include Kite Pharma, Utrecht Holdings and Medicxi.
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Anduril Industries raised $1.48 billion in a Series E funding round that values the California-based defense technology company at $8.48 billion. Anduril, which almost doubled its last valuation from a June 2021 financing round, will use the funds to accelerate research and development. Valor Equity Partners, already an Anduril investor, led the round, which also included Founders Fund, Andreessen Horowitz, General Catalyst, 8VC, Lux Capital and others.
Shield Financial Compliance, a workplace intelligence platform, raised a $20 million Series B financing round led by Macquarie Capital and joined by UBS through its venture and innovation unit UBS Next, Mindset Ventures and OurCrowd.
PictorLabs Inc., a Los Angeles-based histopathology startup, launched from stealth with $15.2 million in new funding led by M Ventures, SCC Soft Computer and Koç Holding. PictorLabs says it has raised $18.8 million since its founding in 2019.
CleanFiber Inc., a Buffalo, N.Y.-based building insulation startup, raised a $10 million investment from investment firm AXA IM Alts.
AltoVita, a U.K.-based corporate travel accommodations platform, raised $9.5 million in its Series A investment round co-led by Novum Capital Partners and Fifth Wall Ventures Management.
CyVers, an Israeli Web3 security startup, landed an $8 million investment. Led by Elron Ventures, the round included participation from Crescendo Venture Partners, Differential Ventures, Cyber Club London and others.
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PHOTO: STEPHEN VOSS FOR THE WALL STREET JOURNAL
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