Good day. Increased activity in North America from financial advisers who help broker mergers and acquisitions is another indicator of a thawing exit market that’s critical to the venture ecosystem.

The value of deals advised by investment bank Jefferies, which has been active in venture and startup dealmaking, jumped 373% in the first quarter of this year from the same quarter of 2023, according to analytics firm GlobalData. The number of transactions it advised on rose 75% over the same period to 28 deals.

JP Morgan Chase saw the value of M&A deals it advised rise 196% in the first quarter compared with the same period a year ago, GlobalData said. The number of deals JP Morgan worked on rose 43% to 30 deals in the first quarter of this year.

Exits had ground to a near halt so the surge in activity is coming off a low base. U.S. venture exit activity rose 94% to roughly $18 billion in the first quarter compared with the same quarter of last year, according to analytics firm PitchBook Data. Anecdotally, venture capitalists have said they are seeing signs of life in the M&A market. Cybersecurity investors, for instance, said the rebound of the cyber sector is thanks in part to the exit market.

Gaurav Kittur, co-head of internet investment banking at Jefferies, said there was plenty of optimism about the M&A market at the firm’s Private Internet Conference last week.

“We are feeling positive for a return of activity coming out of our Private Internet Conference, where we hosted some of the best private companies and venture-capital investors,” Kittur said. “While it won’t be the rush we saw in 2021, we believe you will see a big recovery from the trough of 2023.”

And now on to the news...

Casey Caruso creating frontier-tech venture firm Topology. A former investment partner at crypto firm Paradigm is setting up a new venture shop called Topology, according to people familiar with the situation, WSJ Pro reports. Casey Caruso has been meeting with potential investors about raising Topology’s first fund, the people said. The fund will back early-stage startups in crypto, artificial intelligence, and the intersection of these technologies, as well as in other frontier-tech categories, such as brain-computer interfaces.

• Caruso has discussed a target for the fund of $60 million, the people said. The process is ongoing and the final figure could be different.
   
• Topology Ventures Fund I LP made a filing with the Securities and Exchange Commission this month registering its plan to raise capital. Caruso is a solo general partner managing the fund and expects to make hires for it, one person said.

The face of the artificial-intelligence boom is betting that a new twist on solar power and energy storage can handle some of the ravenous electricity demands of the industry’s data centers, The Wall Street Journal reports. Sam Altman and venture-capital firm Andreessen Horowitz are among the investors putting $20 million into Exowatt, a company launched to tackle the clean-energy needs of big data centers.

Talks between Salesforce and data-management software firm Informatica have fizzled after the companies couldn’t agree on terms, according to people familiar with the matter, the WSJ reports. The Journal reported earlier this month that Salesforce was discussing a deal to buy Redwood City, Calif.-based Informatica, which could have been valued in the neighborhood of $10 billion. It would have ranked among Salesforce’s largest acquisitions.

People

Andreessen Horowitz promoted Jennifer Li to general partner. Prior to joining the firm in 2018, she led product at Solvvy.

Matter Labs, a research and development company focused on the creation of scaling solutions for Ethereum, appointed Nana Murugesan as president. He previously served as vice president, business development and international at Coinbase.

Pliant, a German business-to-business credit-card platform, closed on more than €18 million in Series A extension financing led by PayPal Ventures.

Xfactor.io, a San Francisco-based AI-powered platform that unites sales, marketing and operations, raised $16 million in Series A funding led by Accel.

AI Squared, a Washington, D.C.-based startup that helps organizations deliver data and AI insights into business applications, grabbed $13.8 million in Series A funding. Ansa Capital led the round, with General Partner Allan Jean-Baptiste joining the company’s board.

Dataplor, a Manhattan Beach, Calif.-based global location intelligence provider, landed $10.6 million in Series A funding. Spark Capital led the round, with General Partner Alex Finkelstein joining the board.

Clazar, a San Francisco-based automation platform for listing, managing and co-selling software across cloud marketplaces, secured $10 million in Series A funding led by Ridge Ventures and Ensemble VC.

Sapien AI, a San Francisco-based startup that trains AI models through its novel gamified data labeling platform, was seeded with a $5 million investment from Artichoke Capital and others.

LunaJoy Health, a St. Petersburg, Fla.-based maternal mental health startup, secured $4.2 million in new funding from investors including FoundersX Ventures.

• U.S.-China internet war intensifies as House passes TikTok ban
   
• AI gives enterprise device market something to be excited about
   
• Water facilities warned to improve cybersecurity as nation-state hackers pounce
   
• Here come the anti-woke AIs 
   
• Schools want to ban phones. Parents say no.

• Why the Legoland strategy doesn't work for fundraising startups. They need the Disney strategy. (DataDrivenInvestor)
   
• How Mercury’s new hire points to venture capital’s exit focus. (HoustonInno)

This newsletter was compiled by Marc Vartabedian and Zachary Cole.

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.

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