Good day. Recast Capital, an investment firm that backs venture funds, is launching an accelerator for women-led early-stage funds with funding from Melinda French Gates. The program aims to support new managers as they face a harder time getting a venture fund off the ground.

First-time funds struggled to attract capital last year. Roughly 141 first-time funds raised a total of $10.3 billion in 2022 in the U.S., according to the latest PitchBook-NVCA Venture Monitor. That’s the lowest number of new funds closing since 2013 and is down from 340 funds that raised $21.6 billion in 2021.

That may be detrimental to efforts to diversify the venture industry since there are more women and people of color managing emerging funds. The initiation of fewer funds suggests such managers are less likely to join the industry.

“Many LPs are reverting to the name brands that folks recognize as the ‘safer bet’ in times like this,” said Sara Zulkosky, co-founder and managing partner at Recast Capital LLC, which focuses on emerging funds led by diverse managers. She added that she believes that attitude is misguided.

Recast Accelerate plans to enroll about 30 female fund managers this year and provide them with educational programming and operational funding. The goal is to provide participants with $100,000 each to start for legal, fund administration, and other services to set up their funds, Ms. Zulkosky said. In return, they will agree to allow Recast to track the demographics of the entrepreneurs they back.

The program is free for participants and is supported through donations. Melinda French Gates’ company Pivotal Ventures is an early sponsor.

And now on to the news...

Lightspeed Venture Partners continues to bolster its growth-investing team to target companies that are more mature than the startups the firm traditionally backed as an early-stage specialist, WSJ Pro’s Marc Vartabedian reports.

• The venture-capital firm on Tuesday said it has hired Sebastian Duesterhoeft as a partner on the growth team, a sign that it is committed to building out investing at that financing stage despite last year’s difficulties in the sector.
   
• Lightspeed said it isn’t shifting away from its early-stage focus but is aiming to capitalize on emerging investment opportunities more broadly.
   
• Last summer, the Menlo Park, Calif.-based firm raised roughly $4.5 billion dedicated to investing in growth-stage companies. In August, the firm said it had invested more than $3 billion in growth-stage companies over multiple funds during the past two years. Lightspeed will aim to add more talent to its growth team, according to partner Will Kohler.

The Federal Trade Commission has demanded Twitter Inc. turn over internal communications related to owner Elon Musk, as well as detailed information about layoffs—citing concerns that staff reductions could compromise the company’s ability to protect users, documents viewed by the Wall Street Journal show.

• In 12 letters sent to Twitter and its lawyers since Mr. Musk’s Oct. 27 takeover, the FTC also asked the company to “identify all journalists” granted access to company records and to provide information about the launch of the revamped Twitter Blue subscription service, the documents show.
   
• “We are concerned these staff reductions impact Twitter’s ability to protect consumers’ information,” an FTC official wrote to Twitter’s lawyers on Nov. 10 following an initial wave of layoffs, according to a copy of the letter viewed by the Journal.

A bipartisan group of senators is introducing a bill on Tuesday to address threats posed by technology based in adversary countries, including the popular TikTok video-sharing app, WSJ reports.

• The bill would set up new government processes for reviewing and mitigating risks from foreign technology, according to a fact sheet. It would require the Commerce Department to establish procedures to “identify, deter, disrupt, prevent, prohibit and mitigate” risks from foreign technology, according to the fact sheet.
   
• The legislation is the latest in a string of bills that would take on the thorny problem of what to do about technology controlled by companies based in potential adversary countries, particularly China.

Overhaul, an Austin, Texas-based supply-chain visibility startup, raised $73 million in new growth capital including $38 million in equity and $35 million in nondilutive debt. Growth-equity investor Edison Partners led the investment with participation from strategic investors eGateway Capital, StepStone Group and TRM Ventures. Stifel Bank provided the debt financing.

Zeda Inc., a Fremont, Calif.-based 3D manufacturing and nanotech startup raised a $52 million equity and debt financing for a total capital raise of $68 million to date. The Series B round included participation by institutional and strategic investors, including Michelin, Taiyo Nippon Sanso Corp. (a Mitsubishi Chemical Group company) and Fives Group. It was jointly led by Boutique Venture Partners, Berkeley Catalyst Fund, DOV Management and Solvay Ventures.

Kresus Labs Inc., a Web3 app, raised a $25 million Series A funding round led by Liberty City Ventures, JetBlue Ventures, Franklin Templeton, Marc Benioff, Cameron & Tyler Winklevoss, Craft Ventures and other blockchain-focused investors.

Banyan Infrastructure, a San Francisco-based sustainable-financing software platform, raised a $25 million Series B funding round, bringing the company’s total funding to over $42 million. Climate-software investor Energize Ventures led the round, with participation from new investors SE Ventures and Elemental Excelerator, and existing investors VoLo Earth and Ulu Ventures. Juan Muldoon, partner at Energize, has joined Banyan’s board of directors.

Fynn, a fintech company providing private student loans, said it raised $11 million in seed financing and $25 million through a debt facility. Lead investors included Y Combinator, Susa Ventures, Village Global, Tenacity Venture Capital and Watchfire Ventures. The company, which provides loans to attend trade schools, said it would use funding to expand its services across the U.S. and to support students. 

Glider AI, a startup that provides hiring services such as screening and assessments, and software used for hiring, said it closed a total of $10 million in Series A funding from Primera Capital and other investors. The company said it will use the funds for expansion in contingent programs and permanent hiring, technology development and growing its team. Glider, founded in 2020, counts enterprises and staffing firms as clients.

Speedscale Inc., an Atlanta-based cloud traffic replay company, raised $9 million in a combination of preseed and seed funding. Grotech Ventures led the investment round, with participation from Sierra Ventures, Tech Square Ventures, Correlation Ventures, CreativeCo, Tom Noonan, Wally Wang and TIE Atlanta.

RenewWest, an ecosystem restoration company, raised a $3.2 million seed financing round led by Aspiration Bank and One Small Planet.

Opkit Inc., a New York-based health-insurance verification platform, is emerging from stealth with initial funding of more than $1 million from Global Founders Capital, Mischief (Plaid founder Zach Perret's fund), Socially Financed, Y Combinator and Rex Salisbury. The startup participated in Y Combinator.

Unless, a venture investor focused on the industrials sector, hired Elisabeth Reynolds as partner. Previously she was the special assistant to President Biden for manufacturing and economic development at the White House. She is also a lecturer at Massachusetts Institute of Technology.  

Venture MLS, the venture-capital fund established in 2022 by California Regional Multiple Listing Service, said it has added David Anderson as a venture partner. His responsibilities will include identifying investors and fundraising opportunities, as well as promoting portfolio investments of Venture MLS, the fund said.

• How Google became cautious of AI and gave Microsoft an opening
   
• As customer problems hit a record high, more people seek ‘revenge’
   
• How Salesforce is striving to make its sales force more efficient
   
• Germany reviews 5G network safety, opening door to possible Huawei ban
   
• Gigi Sohn withdraws as nominee for Federal Communications Commission
   
• South Korea says U.S. Chips Act subsidies have too many requirements

• Removing demographic data can make AI discrimination worse (Harvard Business Review)

This newsletter was compiled by Yuliya Chernova.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley, Angus Loten, and Marc Vartabedian.

Follow us on Twitter: @wsjvc