Good day. The recent software selloff in public markets highlighted a challenge for older venture-capital funds: Software companies aren’t as valuable as they once were. Now, cash set aside for follow-on investments into these companies is stuck. And venture firms are facing dim exit prospects for software portfolio companies.

Mo Koyfman, founder of Shine Capital, told WSJ Pro that cash invested in 2021 was largely put into software-as-a-service companies at revenue multiples that were vastly larger than they are today. “That’s dead money right now,” he said, “and that’s why you’re not seeing more money go into those businesses unless they’re being fully restructured.” 

It’s also possible the selloff could better align market realities with investor expectations and spur dealmaking.

We’d like to hear from you: How should VCs navigate a market that isn't valuing software companies as much as it once did? Please email responses to vcnews@wsj.com.

Last week, we asked how VCs view experience when assessing a founder’s ability to bring disruptive tech to market. Here are edited and condensed responses:

• Rob Biederman, managing partner, Asymmetric Capital Partners: “At Asymmetric, we’re convinced that founder-market fit—especially deep mastery of the industry to be disrupted—is most predictive of success. As a result, we do tend to back more experienced founders: Since inception, our average core check founder has 15 years of post-college work experience.”
   
• Andre de Baubigny, co-founder and managing partner of MVP Ventures: “Disruptive ideas come from founders of all ages, but the founders who most consistently turn disruption into durable companies tend to be repeat founders. Having built before gives them better judgment around hiring, pricing and go-to-market, which matters far more than age once real execution pressure sets in.”
   
• Murielle Thinard McLane, managing partner and president at Intuitive Ventures: “Medtech isn't software—you can't disrupt from a dorm room when lives are at stake. Success requires pairing the brilliant young scientist with the idea with the gray-haired operator who knows how to commercialize it. Neither brilliance nor experience alone can navigate regulatory rigor, reimbursement complexity and clinical validation requirements. Together, the most successful medtech leadership teams combine deep scientific expertise with hard-won operational experience. Youth often brings creative innovation; but experience brings execution.”

Note to readers: There will be no VC Daily newsletter on Monday in observance of Presidents Day. We’ll be back Tuesday.

And now on to the news...

Enterprises embrace AI agents. Companies are thinking very differently about AI agents than they were at this time last year. There’s no more second-guessing whether the bots are here to stay. That’s according to attendees at The Wall Street Journal’s Technology Council Summit, which attracts some of the nation’s leading information-technology executives. When the summit convened at the same place in Silicon Valley one year ago, the main takeaway was that AI agents had yet to find their place among large enterprises. This year, however, AI agents are everywhere. And while their evolution and adoption are still very much a work in progress, the sense that they are “nowhere” has passed.

Investors drove stocks to records betting that artificial intelligence will change the way that American companies do business. Glimpses of that potentially far-reaching impact have become evident in recent days—and Wall Street is spooked. Major U.S. indexes slid on Thursday, weighed down by new worries that AI will hurt the long-term outlook of tech, financial and logistics companies. Recent downswings have swept up a wide range of stocks, from data providers and the Magnificent Seven to wealth managers and trucking companies.

A nuclear-power startup said it has found a workaround for the industry’s twin stumbling blocks: the expense and time it takes to build reactors. Project developer Alva Energy said it could add 10 gigawatts of nuclear energy to the U.S. power grid—the equivalent of nine or 10 large reactors—in the near term by boosting output at dozens of existing nuclear plants. The startup has support from former Intel Chief Executive Pat Gelsinger, a general partner at the venture firm Playground Global, which led Alva’s recent $33 million fundraising round.

Funds

Seligman Investments launched a venture-capital arm along with an initial fund of $500 million. Seligman Ventures will invest across AI and cloud infrastructure, cybersecurity and data-center hardware verticals.

Elaia, a Paris-based firm focused on early- to growth-stage B2B tech and deep-tech investments, held the first €120 million closing of its fifth digital venture fund, which has a target of €200 million.

People

Felicis promoted James Detweiler to general partner and Eric Flaningam to partner, and named Michael Chen as venture partner.

Sunbit, a provider of personalized financial technology products, appointed Shachar G. Scott as chief marketing officer. She most recently served as vice president of global marketing for Meta’s Reality Lab.

Aurasell, an AI-native go-to-market platform, appointed Steve Burton as chief marketing officer and David Winslow as vice president of revenue operations. Burton was most recently at CrowdStrike. Winslow was previously at Salesforce.

Anthropic, a San Francisco-based AI company, scored $30 billion in Series G funding from investors including GIC, Coatue Management, Dragoneer, Founders Fund and Iconiq. The company, which is now valued at $380 billion, said the funding will fuel research, product development and infrastructure expansions.

Apptronik, an Austin, Texas-based humanoid robot developer, added $520 million in new funding from investors including Google, Mercedes-Benz, John Deere, AT&T Ventures, B Capital, PEAK6 and Qatar Investment Authority. This latest investment brought the company’s Series A total to more than $935 million.

Inertia Enterprises, a Livermore, Calif.-based commercial fusion energy startup, grabbed a $450 million Series A round. Bessemer Venture Partners led the funding, which included contributions from GV and others.

Runway, a New York-based AI company focusing on developing world models, snagged $315 million in Series E funding. General Atlantic led the round, which saw contributions from Felicis and several others.

Oxide, an Emeryville, Calif.-based on-premises cloud computing startup, raised $200 million in Series C funding. Thomas Tull's United States Innovative Technology fund led the round, which included participation from Eclipse and others.

Vega, a New York-based AI-native security analytics mesh platform, raised $120 million in Series B funding. Accel led the round, which included participation from Cyberstarts, Redpoint Ventures and CRV.

Simile, a Palo Alto, Calif.-based AI startup, secured $100 million in funding to advance its technology that predicts human behavior. Index Ventures led the investment, which included additional support from Bain Capital Ventures, A* and Hanabi.

Lassie, a Stockholm-based pet insurance startup, nabbed $75 million in Series C funding from investors including Balderton Capital, Felix Capital, Inventure and Passion Capital.

Entire, a Seattle-headquartered developer platform designed for human-agent collaboration, was seeded with a $60 million investment at a $300 million valuation. Lead investor Felicis was joined by Madrona, M12, Basis Set Ventures and others in the round.

GitGuardian, a Paris-based nonhuman identity security platform, landed $50 million in Series C funding. Insight Partners led the round, which included participation from Quadrille Capital, Balderton Capital, Eurazeo, Fly Ventures and Sapphire Ventures.

Anterior, a New York-based clinician-led AI platform for health plans, collected a $40 million investment from New Enterprise Associates, Sequoia Capital, FPV Ventures and Kinnevik.

• Justice Department’s Antitrust Chief Leaves Post After Clashes With Leadership

• Coinbase Swings to a Fourth-Quarter Loss Amid Crypto Meltdown

• Big Tech Accounting Creates a Blind Spot in the AI Boom

• Anthropic Enters Midterm-Election Showdown Over AI Regulation

• The Dragnet Era of Home Security Cameras

   

• Senior AI staffers keep quitting—and are issuing warnings about what’s going on at their companies (MarketWatch)
   
• Spotify says its best developers haven’t written a line of code since December, thanks to AI (TechCrunch)

This newsletter was compiled by Matthew Strozier and Zachary Cole.

Share your tips, comments and questions: vcnews@wsj.com

The team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

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