Good day. The climate cause has lost some of its momentum in the last few years, but that’s not stopping founders and investors from convening in New York for Climate Week NYC, which runs through Sunday.

We caught up with Matthew Stotts, co-founder and general partner at Cerulean Ventures, who will be participating in Climate Week events. Founded by Stotts and General Partner Jahed Momand, Cerulean just closed a $10 million debut fund to invest in climate software startups. Family office One Small Planet anchored the fund, Stotts said, and more than a dozen LPs stepped up.

Cerulean is investing in pre-seed startups that are fighting greenwashing and building businesses that don’t rely on the “green premium,” or the ability to charge more for environmentally helpful technologies. Excerpts of our conversation with him follow.

WSJ Pro: What concerns do you have about the way the climate-tech market is developing?

Stotts: When we look at renewable energy, we are not looking at how many batteries are being installed here or how much wind is being installed there. We are looking for the connective economic infrastructure that will make this general asset tradeable. There’s so much friction. The quote-unquote climate market, if you look at any of the deep-tech science stuff like carbon capture, or the nature-based carbon removals like tree plantings, they are done in bulky, brokered, one-to-one deals. There isn’t a ton of liquidity, there’s not a lot of visibility, people don’t know what's being traded.

Then you run into greenwashing. We are working for a much more liquid, transparent and traceable market for making the investments and taking all this action.

WSJ Pro: What can you accomplish with a $10 million fund in a sector that’s short of trillions of dollars to reach net zero?

Stotts: We are backing very asset-light businesses. This is a financial revolution and a data revolution, as much as it is a science and materials revolution. So we are building that layer, the intelligence layer, the finance layer, and those types of products are asset-light and can reach global scale.

And now on to the news...

Engergized returns. Allison Thacker, who is leaving the post of chief investment officer and president of Rice University’s endowment this month, wrangled some turbulent periods in the energy markets over her 13-year tenure, WSJ Pro reports. But it was energy investments that helped drive outsize returns for endowment manager Rice Management.

• Since she became CIO in 2011, Rice Management has nearly doubled its total assets to $8.1 billion from $4.2 billion, while contributing $3.8 billion to the university budget and generating an average annual return of 9.2%, according to the university.
   
• “I would say the biggest differentiator for us was our private investment portfolio,” Thacker said. “That would be venture capital and private equity, but also outstanding performance in energy.”

The Commerce Department on Monday proposed banning Chinese and Russian components inside of connected vehicles on U.S. roads, significantly escalating the Biden administration’s effort to prevent Washington’s top adversaries from spying on Americans, The Wall Street Journal reports. In February, the Commerce Department announced an inquiry into the potential risks Chinese smartcars, software and certain parts, like sensors, posed to the U.S., and sought comment from industry experts about how best to deal with the issue. Monday’s action puts forward the department’s plan to actually restrict their use, and added Russian hardware and software to the proposed prohibitions.

Caroline Ellison, the star witness in FTX founder Sam Bankman-Fried’s fraud trial, helped put her former boyfriend and boss in prison for 25 years. Since then, she has written an Edwardian romance novella, unsuccessfully hunted for work and dated a guy a former colleague called a “vast improvement over her ex.” On Tuesday afternoon, the 29-year-old Stanford University graduate is set to find out if her cooperation with prosecutors will keep her out of prison, WSJ reports. 

Harmonic, a Palo Alto, Calif.-based artificial intelligence platform, scored $75 million in Series A funding. Sequoia Capital led the round, which included participation from Index Ventures, GreatPoint Ventures and others.

Torq, a New York-based cybersecurity hyperautomation platform, closed a $70 million Series C round led by Evolution Equity Partners.

Pyka, an Alameda, Calif.-based manufacturer of autonomous electric aircraft, raised $40 million in Series B funding led by Obvious Ventures.

HyperLight, a Cambridge, Mass.-based maker of photonic integrated circuits, grabbed $37 million in Series B funding. Summit Partners led the round, with Peter Chung joining the company’s board.

MetOx International, a Houston-based manufacturer of high-temperature superconducting wire, completed a $25 million Series B extension round from investors including New System Ventures.

David Energy, a New York-based clean energy grid startup, secured a $23 million investment led by Cathay Innovation.

Letta, a San Francisco-based generative AI startup, emerged from stealth with $10 million in seed funding led by Felicis.

Kestra, a Paris-based workflow management platform, landed an $8 million seed investment led by Alven.

Brisk Teaching, a San Francisco-based AI-powered Chrome extension for teachers, has raised a total of $6.9 million in pre-seed and seed funding from investors including Owl Ventures.

Ayrton Energy, a Canada-based clean hydrogen storage system developer, was seeded with a $6.8 million investment led by Clean Energy Ventures and BDC Capital.

Darkbright Studios, a gaming startup, closed $6 million in seed funding led by Bitkraft Ventures.

• The man tasked with rebooting Amazon AI

• The magic behind Shein’s rise comes under threat: duty-free shipping

• Washington Post to lay off a quarter of staffers from software unit

• Kamala Harris says she will support digital assets

• Micron needs a new memory boost

• Robinhood touts rock-bottom fees for options trading. Then come the hidden costs.

• Israeli tech sector resilient but faces funding uncertainty amid war with Hamas (Reuters)
   
• Middle Eastern funds are plowing billions of dollars into hottest AI start-ups (CNBC)
   
• A mysterious school for the network state crowd is now in session (Wired)

This newsletter was compiled by Matthew Strozier 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, Yuliya Chernova, Brian Gormley, Angus Loten and Marc Vartabedian.

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