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Number of Women-Founded Venture Firms Rises, but Challenges Remain
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By Yuliya Chernova, WSJ Pro
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Good day. There are now 275 venture firms in the U.S. started by women, up from about 20 a decade ago, according to a report by Global Women in VC, a community for female investors founded by Sutian Dong, formerly a partner at venture firm Female Founders Fund, and Jessica Peltz-Zatulove, founding partner at the new venture firm Hannah Grey.
While that’s a big increase, women-founded firms represent a fraction of all venture firms. As of the end of last year there were 1,328 active venture firms, according to the National Venture Capital Association.
Since women venture investors are more likely to invest in female entrepreneurs, their ability to thrive is the most scalable way to ensure the gender imbalance in venture capital gets smaller, the report authors write.
But whether they will thrive is an open question. About 67% of the venture firms run by women are raising their first fund or investing out of their first fund, the report found. And this year emerging managers have been sidelined by larger, more established venture funds that have been attracting much more capital and attention from limited partners.
In addition to writing checks to women-led funds, the report suggests LPs conduct diversity audits of managers in their portfolios. In a significant move for the investment world broadly, the Yale University endowment is taking just such a step, as The Wall Street Journal recently reported. The Global Women in VC report also asks influential people to refer female VCs not just to specific diversity initiatives within LP groups but to core groups that have more capital to invest.
And now on to the news...
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Ant Group’s Hong Kong stock will begin trading on Nov. 5, according to a filing with the city’s stock exchange. PHOTO: STR/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Record IPO. Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, filings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges, The Wall Street Journal reports. The mammoth IPO, which spans Shanghai and Hong Kong, adds to an already frenetic year for China’s capital markets, which are enjoying a boom in share sales despite heightened tensions with the U.S.
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Ant is seeking to raise about $17.2 billion in each city, based on prices of 68.8 yuan and HK$80 respectively per share, according to regulatory filings. Ant could raise up to a maximum of about $5.2 billion more, if underwriters exercise their option to purchase up to 15% more shares in an arrangement known as a green shoe.
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Bayer to Buy Gene-Therapy Firm AskBio
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Bayer AG said Monday it would pay as much as $4 billion for U.S. biotech firm Asklepios BioPharmaceutical Inc. to strengthen the German company’s drugmaking arm, WSJ reports. The latest deal—for which Bayer will pay $2 billion now and as much as a further $2 billion based on future success milestones—is a bet on cutting-edge gene therapy, in which a functional gene is inserted to counter the effects of a disease caused by a missing or faulty gene.
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Dozens of gene therapies are now undergoing clinical trials and big drug companies have been acquiring gene-therapy firms, betting on the success of those treatments in the future.
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AskBio was co-founded by Richard Jude Samulski, who pioneered the use of what are known as adeno-associated viruses as vehicles to replace a defective gene with a healthy gene.
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Thoma Bravo Raises $22.8 Billion in Record Tech-Fundraising Haul
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Thoma Bravo, a private-equity firm focused on technology and software, has collected $22.8 billion from investors for three funds in one of the largest tech-focused private-equity fundraising hauls to date, WSJ Pro’s Preeti Singh reports.
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The Chicago-based private-equity firm collected $17.8 billion for its flagship buyout fund, Thoma Bravo Flagship Fund XIV.
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At this size, the new flagship fund ranks as the largest tech-focused buyout fund raised, for now, by an independent private-equity firm.
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Thoma Bravo, which invests in software and technology-enabled services businesses, also collected around $3.9 billion for its Thoma Bravo Discover Fund III to back midsize enterprise software and technology businesses and around $1.1 billion for Thoma Bravo Explore Fund, which targets small businesses in the sector.
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Funds
Rainfall Ventures is raising $60 million for its second fund, according to a regulatory filing. Earlier this year, the firm participated in funding rounds for virtual payment card platform Privacy.com and data management startup Yaguara.
Impact America Fund, an Oakland, Calif.-based venture firm founded by Kesha Cash, raised $55 million for its second fund. The firm said that makes the fund likely the largest ever raised by a sole Black female general partner. Limited partners in the fund include the John D. and Catherine T. MacArthur Foundation, Ford Foundation, California Wellness Foundation, as well as the clients of wealth managers such as Caprock and Cambridge Associates. Impact America Fund invests in seed through Series B rounds. Its portfolio includes Mayvenn, a service for hair stylists, small-business lending startup SMBX, and home health care startup CareAcademy. The firm says that 80% of the companies it backed are led by a person of color, and 70% of them are Black-led. The firm says investing in diverse founders isn't its explicit strategy.
Exits
Finastra’s Canadian mortgage business Filogix acquired mortgage platform Doorr for an undisclosed amount. Finastra is backed by private-equity firm Fisher Lynch Capital. Toronto-based Doorr was backed by investors including Celtic House Venture Partners, Good News Ventures and MaRS Investment Accelerator Fund.
Publicly traded Microchip Technology Inc. acquired software developer tool LegUp Computing Inc. for an undisclosed sum. Toronto-based LegUp was backed by Intel Capital.
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FreshToHome, an India-based food e-commerce startup, raised $121 million in Series C funding. The round was led by the U.S. government’s Development Finance Institution, Investment Corporation of Dubai, the principal investment arm of the Government of Dubai, Investcorp, Ascent Capital, the Allana Group and Iron Pillar, and other investors participated in the financing.
Eagle Eye Networks, an Austin Tex.-based enterprise cloud video surveillance startup, raised $40 million in Series E funding from venture-capital firm Accel.
Rockset, a San Mateo, Calif.-based serverless search and analytics startup, raised $40 million in Series B funding. Sequoia Capital led the round, which included participation from Greylock Partners.
O(1) Labs, a San Francisco-based blockchain startup, collected a $10.9 million investment. Bixin Ventures and Three Arrows Capital led the round, with participation from SNZ, HashKey Capital, Signum Capital, NGC Ventures, Fenbushi Capital, IOSG Ventures and others.
TeleSense, a Sunnyvale, Calif.-based grain storage technology provider, secured $10.2 million in Series B financing led by Finistere Ventures. Soren Wolck Schroder, former chief executive of Bunge, and United Malt Chief Executive Mark Palmquist joined the board.
StreetShares, a Reston, Va.-based small-businesses loan platform, picked up a $10 million investment from Motley Fool Ventures, Ally Ventures and others.
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Hyundai Motor is among the companies working on fuel-cell electric trucks. PHOTO: SEONGJOON CHO/BLOOMBERG NEWS
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