Good day. The U.S. Commerce Department's decision to add 28 Chinese organizations, including eight companies, to its trade blacklist is a blow to the artificial-intelligence industry in China, The Wall Street Journal reports.

The companies, which were cited by the U.S. for their role in repression of Muslim minorities, are among the largest names in A.I. in China and the world⁠—and several are currently or formerly backed by U.S.- or China-based venture-capital or private-equity firms. The move could limit these companies' ability to access U.S.-based equipment.

The companies include iFlytek Co., surveillance-system producer Hangzhou Hikvision Digital Technology Co., facial-recognition business companies SenseTime Group Ltd. and Megvii Technology Ltd. and Yitu Technology, which focuses on AI applications in cities, health care and business. 

While U.S.-based A.I. startups typically don't compete directly with Chinese counterparts⁠—U.S. government agencies typically buy A.I. software from U.S. companies, for example⁠—any impact of the blacklistings on the U.S. A.I. market won't be clear for some time.

And now on to the news...

Biotech M&A. Fewer biotechnology startups are being acquired as a result of large pharmaceutical-company mergers and a strong market for initial public offerings, WSJ Pro's Brian Gormley reports.

• Twenty U.S. VC-backed biotechs were acquired in the first three quarters of 2019, the fewest since the same number of biotechs were purchased in the same period in 2012, according to VentureSource, which is owned by WSJ Pro publisher Dow Jones.
   
• Last year, 28 venture-backed biotechs were purchased in the first three quarters, and 36 were acquired in the same period in 2017.
   
• Lately, top drugmakers have been buying each other. Corporations typically are less able to make meaningful acquisitions when going through a large-scale merger themselves, said Geoffrey Porges of investment bank SVB Leerink LLC.

Industrial AI. SparkCognition Inc., a startup developing artificial intelligence for industrial uses, raised $100 million in new funding from an array of investors, including Boeing Co., reports WSJ Pro's Marc Vartabedian. The startup offers AI-powered tools to help predict when equipment might fail, among other services for manufacturers and oil-and-gas companies. The investment is a deepening of a long-term relationship for Boeing, said Brian Schettler, managing director of the aerospace company’s venture-capital arm Boeing HorizonX Ventures. March Capital Partners led the Series C financing for the Austin, Texas-based startup.

European ingenuity. The world’s oldest universities are learning to promote their newest technologies using American-style entrepreneurialism, the Journal's Daniel Michaels reports. Across Europe, academic institutions are intensifying efforts to get promising ideas out of their labs and into commercial use, following the successful examples of Stanford University, Massachusetts Institute of Technology and other U.S. leaders in the field.

Online food marketplace Grubmarket Inc. acquired two produce wholesalers, Golden Greek Fresh and Happy Farm Produce, for an undisclosed amount. San Francisco-based Grubmarket is backed by investors including Evolv Ventures, WI Harper Group, Great Oaks Venture Capital and GGV Capital.

Dedrone, a startup that helps customers such as data centers, prisons and airports secure their airspace from drones, purchased  DroneDefender from Battelle for an undisclosed sum. In connection with the acquisition, the San Francisco-based company launched a new consultancy, Dedrone Defense, which will provide services to federal agencies. Felicis Ventures and Menlo Ventures are among Dedrone’s backers.

Voyager Capital raised a $100 million fifth fund to make first-round investments focusing on cloud infrastructure, software-as-a-service, fintech, media and agtech startups across the Pacific Northwest region. Limited partners include family offices, foundations, trusts, funds of funds and individuals. The firm was founded in 1997 and has offices in Seattle; Portland, Ore.; and Vancouver, British Columbia.

Facebook’s Libra hits extra regulatory roadblocks in Europe. Valdis Dombrovskis, who is slated to stay on as vice president of the European Commission, said the planned digital currency poses a risk to the euro.

New York City lawmakers look to regulate facial-recognition tools. Three bills would set guidelines for landlords and businesses using biometric-data systems.

California passes rent-control law amid homelessness crisis. Critics say the state needs more-aggressive action to ease high housing prices.

Senate faults tech giants for role in Russian election meddling. A Senate investigation of Russia’s social-media influence criticized U.S. tech giants for helping spread misinformation during the 2016 presidential election.

Facebook reaches proposed settlement in video measurement lawsuit. Facebook Inc. could pay $40 million to settle a lawsuit from advertisers over miscalculated video metrics.

Robinhood joins the online cash war. The move comes as e-brokers match the firm’s zero-comission trading.

IBM beefs up supply-chain tools with AI. New platform includes anomaly-detection tools to predict how weather can affect deliveries.

Cyber risks force banks to rethink vendor relationships. The usual means of assessing vendor risk are no longer appropriate, companies tell regulators.

Brooklyn office space available but only for cutting-edge startups. At New Lab, the designer of 3D-printed fuel-efficient rocket engine and a biofab operation growing faux leather from collagen protein make the cut.

Postmates’ new IPO delay shows that Wall Street is turning against Silicon Valley. (Recode)

Well-connected entrepreneurs tend to stop growing their networks. (Duke)

Why companies do “innovation theater” instead of actually innovating. (HBR)

Europe’s most influential women in startup and VC. (EU-Startups)

Media mergers highlight arbitrary private valuations. (Axios)

What it’s like being a VC in the Midwest. (AP)

Putting a price tag on SoftBank’s losses from WeWork and Uber’s IPO stumbles. (Fortune)

Telemedicine scams are on the rise. (NPR)

Swift Health Systems Inc., an Irvine, Calif.-based provider of invisible braces, raised $45 million in Series C funding co-led by Vivo Capital, Novo Holdings and venBio Partners. Andrew D. Goldberg of Vivo, Peter Moldt of Novo, and venBio’s Aaron Royston will join the company’s board.

Forward Networks Inc., Palo Alto, Calif.-based startup that creates an accurate software copy of networks, picked up $35 million in Series C funding. Goldman Sachs led the round, with participation from Andreessen Horowitz, Threshold Ventures and A. Capital.

RapidSOS, a New York-based developer of technology that links connected devices to first responders, added $25 million in Series B funding to close the round at $55 million. Energy Impact Partners led the new investment. The round’s first tranche was raised last November from investors including Playground Global, Highland Capital Partners, M12 and Two Sigma Ventures.

Lyte Inc., a San Francisco-based ticketing startup for live events, secured $15 million in Series A financing from Jackson Square Ventures, Industry Ventures, Accomplice Ventures, Correlation Ventures and others.

reMarkable, an Oslo-based digital notepad startup, fetched $15 million in Series A funding from Spark Capital.

iziwork, a Paris-based temporary staffing marketplace, collected €12 million ($13.1 million) in Series A funding from Cathay Innovation and Global Founders Capital.

BrainCheck Inc., a Houston-based startup that tests mental health, snagged an $8 million Series A round. S3 Ventures and Tensility Venture Partners co-led the investment, which included participation from True Wealth Ventures and Nueterra Capital. Charlie Plauche, a partner at S3, will join the company's board.

Umbo Computer Vision, an autonomous video security startup with offices in San Francisco, London and Taipei, raised an $8 million post-Series A round. Translink Capital and Susquehanna International Group co-led the financing, and were joined by investors including Shin-Kong Capital and Shin-Kong Security.

Codacy, a Lisbon-based startup offering a hosted automated code review, nabbed a $7.7 million investment. Join Capital led the round, with participation from EQT Ventures, Armilar Venture Partners, Faber Ventures and Caixa Capital.

Shujinko, a Seattle-based provider of cloud compliance software, landed $7.5 million in Series A financing. Unusual Ventures led the round, with contributions from Defy and others.

Razberi Technologies Inc., a Farmers Branch, Texas-based  provider of video surveillance and Internet-of-Things technology, raised $5.8 million in funding. LiveOak Venture Partners led the investment, with participation from Chartline Capital Partners and others.

Place Technology Inc., an Austin, Texas-based provider of financial forecasting and planning services to small and medium-sized companies, secured a $3 million round of funding. Geekdom Fund led the investment, and was joined by investors including Star Vista Capital.

Stock trading app Robinhood appointed Dan Gallagher to its board. He is currently partner and deputy chair of the securities department at law firm WilmerHale. In July, Menlo Park, Calif.-based Robinhood raised a $323 million Series E round valuing the company at $7.6 billion from investors including DST Global, Ribbit Capital, New Enterprise Associates, Sequoia Capital and Thrive Capital.

Life sciences investor Vida Ventures named Jean-Philippe Kouakou-Zebouah as chief financial officer and chief operating officer. Mr. Kouakou-Zebouah joins Vida from Versant Ventures, where he was senior vice president of finance. Boston-based Vida raised $600 million for its second fund in August.

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

The Team: Tomio Geron, Yuliya Chernova, Brian Gormley, Heather Mack, Katie Roof and Marc Vartabedian.

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