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New York Ventures Forward
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By Yuliya Chernova, WSJ Pro
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Good day. The New York venture-capital market is showing signs of a rebound.
The number of seed rounds by startups based in the New York metro area ticked up in the second quarter, according to data collected by New York-based Primary Venture Partners. The firm tallied 149 seed deals totaling $605 million for startups based in the area in the second quarter, beating out the prior three months and the fourth quarter of 2022. The latest totals were still lower than numbers from the second quarter of last year, Primary said.
Tech jobs in New York have been recovering, as well. Between the Covid-19 pandemic employment trough in April 2020 and June 2023, the city regained 132% of the jobs lost in the professional, scientific and technical category, according to the latest economic snapshot by the New York City Economic Development Corp. The recovery in this category superseded all others except healthcare, the report showed.
More than 400 tech companies were launched in New York in 2022, collectively employing more than 10,000 workers, the report said.
For Brad Svrluga, co-founder and general partner at Primary Venture Partners, the rebound isn’t a surprise. Primary has seen its own deal activity pick up after a long slowdown, Svrluga said.
“That speaks to the resilience of this market and the energy of this market, and the connectedness between the tech market in New York and the real economy,” Svrluga said.
And now on to the news...
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Johnson & Johnson employees collaborate at the company’s Irvine, Calif., lab. The company sees potential in using synthetic data for research but said the technology still needs to mature.
PHOTO: JOHNSON & JOHNSON
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AI data. Healthcare companies have been mesmerized by the possibilities of “synthetic data”—data built out by applying artificial-intelligence algorithms to real data sets. But many of those companies are holding back on using the concocted data, The Wall Street Journal reports.
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For years, drug and health researchers have been experimenting with the technology, which enables them to more freely analyze, for example, the impact of a drug on a given subpopulation, without the typical privacy and regulatory hurdles. A 2021 Gartner study estimated that by next year, 60% of the data used broadly for the development of AI and analytics projects would be synthetically generated.
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Reality is nowhere near that, clarified Arun Chandrasekaran, an analyst at the IT research and consulting firm. In some areas, he said, the engendered data has made headway, for instance, as images for training self-driving cars. But in health and drug research, where synthetic data could be particularly useful in generating medical records, adoption remains low.
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$394 Million
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Profit posted by Uber during the second quarter.
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BlackRock, MSCI Face Congressional Probes
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The House of Representatives’ Select Committee on the Chinese Communist Party notified BlackRock and MSCI on Monday of the probes into their activities, according to letters viewed by The Wall Street Journal. While the committee doesn’t have lawmaking authority, it does have subpoena powers and has garnered bipartisan support for its initiatives. The goal of the investigation is to gather facts that would inform the U.S.’s China policies, including on American capital flows. The panel told the firms that a review of just a sliver of their activities—which aren’t illegal—showed that they are causing Americans to fund more than 60 Chinese companies that U.S. agencies have flagged on security or human-rights grounds. Read the full story here.
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Whitehorse Raises $5.3 Billion for Preferred Equity Strategy
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Whitehorse Liquidity Partners has completed fundraising for its fifth vehicle dedicated to making preferred-equity investments, bringing its assets under management to $13.5 billion in only eight years, WSJ Pro reports. The Toronto-based firm collected $5.3 billion for Whitehorse Liquidity Partners V and related vehicles, exceeding a $5 billion goal, according to a statement seen by The Wall Street Journal. The fund will mainly provide cash to private-equity fund investors and fund managers in return for the rights to preferential cash flows generated by their portfolios. The latest fund is 32% larger than its predecessor, which collected $4 billion by the time of final close in April 2021, and more
than 12 times as large as its debut fund raised in 2017. Fund managers can use preferred equity to make investments when their fund runs out of money or to provide cash back to investors when they have been unwilling or unable to do so through more traditional methods like mergers or initial public offerings.
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Guidepost Growth Equity Backs Educational-Technology Firm Intellum
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Guidepost Growth Equity has backed Intellum, whose education software is used by companies like Google, Walmart and Amazon to train employees and reach customers, WSJ Pro reports. Boston-based Guidepost invested $25 million for a minority stake in Intellum to support product development as well as sales and marketing, representatives for Guidepost and Intellum said. The goal is to at least triple Intellum’s annual revenue over the next three to five years, from its current level of around $40 million, said Gene Nogi, a Guidepost general partner. Guidepost typically invests $15 million to $75 million in growth-stage technology companies, according to
its website. The firm targets companies with $100 million to $300 million of enterprise value and typically holds them for three to five years, Nogi said.
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People
Application security posture management provider Cycode appointed Seth Robbins to the post of chief revenue officer. He was previously CRO of HYPR.
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Nile, a San Jose, Calif.-based enterprise networking startup, scored $175 million in Series C funding from March Capital and others.
Equilibrium Energy, a clean power startup that recently announced a large battery tolling agreement in Texas, emerged from stealth with $33 million in funding from investors including Breakthrough Energy Ventures.
Cyble, an Alpharetta, Ga.-based threat intelligence provider, secured $24 million in Series B funding co-led by Blackbird Ventures and King River Capital.
Socket, a San Francisco-headquartered application security startup, landed $20 million in Series A funding led by Andreessen Horowitz.
Akkio, a Cambridge, Mass.-based generative analytics and predictive artificial-intelligence platform for businesses, closed a $15 million Series A round from investors including Bain Capital Ventures.
Converge Insurance, a New York-based cyber risk management and underwriting provider, raised $15 million in Series A funding from Forgepoint Capital, with Managing Directors Don Dixon and Andrew McClure joining the board.
Silk Security, a New York-based cyber risk resolution platform, emerged from stealth with $12.5 million in seed funding led by Insight Partners and Hetz Ventures.
Steg.AI, an Irvine, Calif.-based enterprise security platform for digital assets, picked up a $5 million investment. Paladin Capital Group led the funding, with Chief Investment Officer Christopher Steed joining Steg.AI’s board.
SnoFox, a New York-based business intelligence tool for the cold supply chain, was seeded with a $4.5 million investment led by Voyager Ventures. The company’s software uses existing refrigeration data, proprietary algorithms and remote technology to extract insights that enhance cold storage warehouse efficiency and reduce energy usage.
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Elon Musk in Beijing earlier this year. PHOTO: TINGSHU WANG/REUTERS
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Reed Jobs to start $400 million VC fund, testing appetite for new funds (The Information)
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Is Black news VC backable? (TechCrunch)
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