Good day. In today’s capital-rich venture market, major startup success appears more common. There are a record number of billion-dollar startups and venture-fund returns have been on a tear.

What is harder to see are the modest outcomes, as well as the startup shutdowns. Yet these possibilities are crucial for founders to consider when deciding how much capital to raise.

Seed investment firm Founder Collective, for example, analyzed its own exits for 2020 and 2021, a very strong period for initial public offerings and mergers and acquisitions. Founder Collective had 19 exits in this time, as Partner Micah Rosenbloom noted in a Twitter post. The firm’s portfolio companies such as Coupang Inc., which has a market cap of more than $48 billion, as well as Riskified Inc., ThreadUp Inc. and others went public. Generally, Founder Collective like other VCs generates its returns from the mega wins.

But even in this heady environment, the majority of its exits were for less than $100 million, including five companies that shut down. The median exit value in its sample was $44 million.

“That should be a real sobering statistic for entrepreneurs,” says David Frankel, partner at Founder Collective, adding: “We have a portfolio. Entrepreneurs don't have a portfolio.”

Overall, about two-thirds of U.S. seed-backed companies ended up bankrupt or “self-sustaining,” where information on them is limited, according to a 2018 analysis by CBInsights.

Of founders in the current VC environment, Mr. Frankel says, “there will be those who do fantastically, and a higher chance you’ll end up with nothing."

And now on to the news...

Commercial-services software company Convex has raised $39 million to expand on its digital bet for a sector that touches on everyday life, from elevators and escalators to air systems and lighting, Maria Armental reports for WSJ Pro.

• Convex will direct some of the money into further expanding its flagship Atlas subscription-based product, according to Charlie Warren, co-founder and chief executive. The company's cloud-based offering gives customers data, such as permit and ownership history, on more than 62 million commercial properties across the country, the company said. The information is displayed on a map and can be used, for example, to help develop sales routes or expand into a competitive market.
   
• The latest investment round raised Convex’s valuation to about $200 million, from about $70 million following a round last year, and was led by venture-capital firms Fifth Wall, Emergence Capital and GGV Capital, the company said.

Private equity remains a top performer for Pennsylvania’s largest public pension, but a decision last year to reduce allocations to the asset class has sparked concern that valuable manager relationships may be lost in the process, WSJ Pro’s Preeti Singh reports. Last year, the overseers of the $69.57 billion Pennsylvania Public School Employees’ Retirement System approved a plan to reduce the target proportion of pension assets invested in private equity to 12% from 15%, to increase liquidity and improve its chances of meeting or surpassing a 7.2% annual return goal. The amount committed to private equity stood at 15.8%, or roughly $10.95 billion, at the end of December.

Two 27-year-old vaping entrepreneurs are the mystery men behind Puff Bar, the most popular e-cigarette brand among teens, which regulators have tried and failed to force off the U.S. market, Jennifer Maloney reports for The Wall Street Journal. In interviews with The Wall Street Journal, the business partners discussed the brand’s popularity among young people and Puff Bar’s decision to reformulate its products with synthetic nicotine so they don’t fall under the jurisdiction of the U.S. Food and Drug Administration.

Funds

Berlin-based FoodLabs launched a €100 million ($115 million) early-stage fund to back European startups in the food production, health and sustainability sectors.

People

Accolade Partners hired Evan MacQueen as vice president. Mr. MacQueen was previously at software company Stardog Union, and Core Capital, a venture-capital firm in Washington, D.C.

Crypto investor Paradigm named Matt Mizbani as investment partner. He was previously a growth investor at Coatue Management focused on crypto and fintech.

Gene therapy company Ensoma appointed Emile Nuwaysir as president and chief executive. Mr. Nuwaysir joins Ensoma from BlueRock Therapeutics, a subsidiary of Bayer Pharmaceuticals, where he was CEO and continues to serve as chairman of the board. Boston-based Ensoma launched early this year with backing from 5AM Ventures, F-Prime Capital, Takeda Ventures and others.

Exits

Two data protection providers are joining forces with Forcepoint’s agreement to acquire Bitglass. Terms weren’t disclosed. Austin, Texas-based Forcepoint was purchased by Francisco Partners in a deal that closed in January. Campbell, Calif.-based Bitglass has raised funding from Quadrille Capital,  Future Fund, New Enterprise Associates, Norwest Venture Partners and Singtel Innov8.

iSpot.tv, which analyzes the television ad market, acquired DRMetrix, a TV ad measurement company specializing in products for direct-to-consumer and direct-response TV advertisers, for an undisclosed amount. Bellevue, Wash.-based iSpot is backed by investors including Insight Partners and Madrona Venture Group.

Plume, a Palo Alto, Calif.-based smart home technology provider, closed a $300 million investment led by SoftBank Vision Fund 2, bringing the company’s valuation up to $2.6 billion. Nagraj Kashyap, managing director at SoftBank Investment Advisors, will join Plume’s board.

Personio GmbH, a Munich-based human-resources software provider for small- and midsize businesses, secured $270 million in Series E financing led by Greenoaks, valuing the company at $6.3 billion. Altimeter Capital and Alkeon Capital also joined in the funding, along with Index Ventures, Accel, Meritech Capital, Lightspeed Venture Partners, Northzone and Global Founders Capital.

Hailo, a Tel Aviv-based startup developing a proprietary chip for deep learning on edge devices, scored $136 million in Series C funding. Poalim Equity and Gil Agmon led the round, which included participation from existing backers ABB Technology Ventures, Latitude Ventures, OurCrowd and others. Mooly Eden, former senior vice president at Intel Corp., will join Hailo’s board.

Hubilo Technologies Inc., a San Francisco-based virtual events platform, grabbed $125 million in Series B funding from Alkeon Capital, Lightspeed Venture Partners and Balderton Capital.

Battery Resourcers Inc., a Worcester, Mass.-based lithium-ion battery recycling startup, secured a $70 million investment. Led by Orbia Ventures and Koura, the round included participation from Hitachi Ventures, InMotion Ventures, Doral Energy, At One Ventures, TDK Ventures and Trumpf Ventures.

Homa Games, a French mobile games publisher, nabbed $50 million in Series A funding. Northzone led the round, which included contributions from Headline, Eurazeo and others.

Zest, a London-based electric vehicle charging company, snagged a £30 million ($40.8 million) investment from Zouk Capital.

Chance Pharmaceuticals, a China-based developer of inhalation therapies for debilitating diseases, completed a $30 million Series C round led by Lapam Capital.

Oshi Health Inc., a New York-based gastrointestinal-care provider, picked up a $23 million Series A investment. Flare Capital Partners, Bessemer Venture Partners and Frist Cressey Ventures co-led the funding, which saw additional support from CVS Health Ventures, Takeda Digital Ventures and others.

Mono, a Nigerian banking startup, fetched $15 million in Series A financing from Target Global, General Catalyst, SBI Investments, Entrée Capital, Acuity VC, Ingressive Capital, Lateral Capital and GPIC.

WattBuy, a New York-based startup helping consumers find clean energy options, added $10 million in Series A funding, bringing the round total to $13.3 million. SE Ventures and MCJ Collective led the new investment, which included participation from Evergy Ventures, Powerhouse Ventures, Techstars Ventures and Avesta Fund.

Prisidio, a Chicago-based digital vault platform enabling users to organize, share and store important documents, added $3.5 million in seed funding. Chicago Ventures led the new investment, which included participation from OCA Ventures and Origin Ventures.

• Elon Musk is the world’s richest person. He likes to brag about it, too. 
   
• Amazon rethinks office return plans, adding more flexibility.
   
• Netflix to sell ‘Squid Game’ goods, other products on Walmart site. 
   
• Xi Jinping scrutinizes Chinese financial institutions’ ties with private firms.
   
• 5G technology begins to expand beyond smartphones.

• How a virtual classroom company made millions on software that left many students feeling abandoned (BuzzFeed News)
   
• The U.S. has already lost AI fight to China, says ex-Pentagon software chief (FT)

This newsletter was compiled by Yuliya Chernova 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, David Carnevali, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

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