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Firms Aim to Provide Venture Funding to Diverse Founders; Alaska Permanent Fund Braces for Modest Near-Term Write-Downs
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By Yuliya Chernova, WSJ Pro
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Good day. Protests following the killing of George Floyd are spurring venture investors into action. Two big names unveiled new initiatives this week: SoftBank set up a $100 million fund to invest in startups launched by entrepreneurs of color, while Andreessen Horowitz created a venture-style philanthropic project with a $2.2 million initial commitment by partners for entrepreneurs from underserved communities.
Many questions swirled around these announcements. Are they enough? Would the firms that commit to diversity be able to widen their networks and reach founders who have little access? Would founders be better off if the funds were structured as traditional venture capital, without the philanthropic spin?
For Marah Lidey, co-founder and co-chief executive of well-being startup Shine Inc., more money coming to founders of color is what matters most. “The biggest impact that VC funds can make if they really want to change the racial disparity in the industry is to write a check,” she said.
And now on to the news...
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A statue outside the Alaska State Capitol building in Juneau is adorned with a coronavirus mask. PHOTO: BECKY BOHRER/ASSOCIATED PRESS
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Bracing for modest near-term writedowns. Alaska Permanent Fund Corp. is bracing for declines in its private-equity portfolio over the next two quarters, but the damage might not be as severe as one would expect, WSJ Pro’s Preeti Singh reports.
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Steve Moseley, deputy chief investment officer and head of alternative investments at the roughly $60 billion state investment fund, said that he expects the private-equity portfolio to lose between 5% and 9% of its value over each of the next two quarters.
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However, Mr. Moseley added that he believes the portfolio is well positioned to weather the pandemic’s impact, thanks partly to solid performance from its direct-investment portfolio, a weighting to resilient sectors in the economy such as technology and health care, and its exposure to distressed investment strategies.
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Pandemic alters plan. Before the coronavirus pandemic hit, enterprise software company Lavu Inc.’s main product was an iPad point-of-sales, or POS, technology for processing customer orders at restaurants and bars, WSJ Pro’s Preeti Singh reports.
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But as the pandemic reached the U.S., Lavu’s team shifted its emphasis to MenuDrive, an online ordering system that at the time only had around 1,100 customers, mainly pizza delivery shops. Until then, Lavu had planned on slower growth for MenuDrive, expecting to gradually make it available to all of the company’s POS customers over a year. “But with the pandemic, we didn’t have that luxury anymore,” said Mirza Baig, a managing partner at Aldrich Capital Partners, a growth-equity firm that has backed Lavu since 2015.
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Funds
Red Dot Capital Partners has raised all but about $18 million of a $200 million second fund, according to a regulatory filing. The Israeli firm counts checkout-free grocery startup Trigo and in-home electronics repair service Puls Technologies Inc. in its portfolio.
Exits
Publicly traded NetApp agreed to acquire Spot, a provider of public cloud compute management and cost optimization technology, for an undisclosed amount. Spot, formerly known as Spotinst, has offices in San Francisco, New York, Washington D.C., Tel Aviv and London. As Spotinst, the company raised funding from investors including Highland Capital Partners, Leaders Fund, Intel Capital and Vertex Ventures.
Bynder, a digital asset management provider, acquired video creation and template platform We Adapt, for an undisclosed sum. Amsterdam-based Bynder is backed by Insight Partners.
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Cullinan Oncology LLC, a Cambridge, Mass.-based company building a portfolio of cancer drug assets, raised $98.5 million in Series B financing. New institutional investors and family offices participated alongside original commitments from founding investors MPM Capital and F2 Ventures. Cullinan has hired Jon Wigginton, as its chief medical officer to lead the clinical development of its small-molecule and biologics programs. Dr. Wigginton most recently was chief medical officer of MacroGenics Inc.
Atom Power Inc., a startup building digital circuit breakers, raised a roughly $18 million Series B round from investors including Valor Equity Partners, Rockwell Automation Inc., ABB Technology Ventures, and Atreides Management.
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Bryter, a Berlin-based no-code software startup, has raised a $16 million Series A led by Dawn Capital and Accel with participation from existing investors including Notion Capital.
Anvil, a paperwork automation startup, raised a $5 million Series A led by Google's AI-focused Gradient Ventures, with participation from Citi Ventures, Menlo Ventures, Financial Venture Studio and 122 West.
Vetty, a New York-based employee verification platform for the gig economy, secured $4 million in pre-Series A financing. 3Lines Venture Capital led the round, with General Partner Krishna Kunapuli joining the company’s board.
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Hacking attacks on the Biden and Trump campaigns don’t appear to have been successful, Google said. PHOTO: ASSOCIATED PRESS (2)
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