Good day. Nuclear fusion is the holy grail in energy generation and billions of dollars are going into its research and development. But is it a business?

Oded Gour-Lavie says yes. Mr. Gour-Lavie, a retired rear admiral of the Israel Defense Forces, is the chief executive and co-founder of NT-Tao Ltd., a nuclear fusion startup based in a suburb of Tel Aviv. NT-Tao is announcing today a $22 million Series A round led by publicly traded energy company Delek US Holdings Inc. and NextGear Ventures, with participation from Honda Motor Co., OurCrowd and the Grantham Foundation.

The company’s technology is at the experimental stage, just as it is for any startup working on nuclear fusion. “What we are striving to achieve by the end of the decade is to present a working prototype that’s creating more total energy out than energy in,” Mr. Gour-Lavie said. Ultimately, the company hopes to create small fusion reactors that fit in a shipping container.

The world paid more attention to the potential of nuclear fusion when late last year a fusion reaction at the Lawrence Livermore National Laboratory produced more energy than the energy delivered by the laser beams that started the reaction. However, operating the lasers required more than a hundred times more energy than the output of the reaction.

While the Energy Department lab relied on lasers to heat up the plasma in which the reaction occurred, NT-Tao is using electromagnets to both contain and heat the plasma. Specifically, the company is optimizing electromagnetic designs called the tokamak and the stellarator.

The company isn’t at a point to measure the output of its reactions. Instead, its 14 employees are working on various aspects of the energy efficiency of its system, such as reducing the energy loss in its magnetic chamber and improving the energy transfer between its power supply and the plasma. The company expects to demonstrate a major milestone in about two years’ time, Mr. Gour-Lavie said. It would also need to continue raising capital, with its next round likely in the $150 million to $200 million range, he said.

“The private sector is much quicker,” Mr. Gour-Lavie said, comparing the progress in nuclear fusion by national labs and startups. Ultimately, he said, the winning combination will be a collaboration between the private and public sectors.

And now on to the news...

PE hiring cools. Private-equity managers have complained the past few years about the industry’s talent shortage—the challenge of hiring top-flight workers in such a well-paid, fast-growing field, WSJ Pro reports. But now, with a glut of Wall Street talent looking for work, buyout firms are mostly taking a pass on new hires. The current wave of corporate layoffs so far hasn’t reached private-equity shops, say people who work with firms to manage their workforces and hiring processes. While Wall Street giants such as Goldman Sachs Group Inc. and Morgan Stanley are slashing head count to cut costs, private-equity firms are mostly standing pat.

The venture capital market in New York City saw a drop-off in seed investments last quarter, a sign the broad pullback in publicly-traded tech stocks and later-stage startups is wending its way down to earlier-stage companies, WSJ’s CIO Journal reports. The number of seed funding deals for startups in New York fell 30%, from 185 to 129 between the third and fourth quarter, according to a report by VC fund Primary Venture Partners. The total amount of seed dollars raised also tumbled, falling 48% from $860 million to $447 million in the same period, the report said.

When Jean Chalopin applied to buy a tiny bank in Washington state nearly three years ago, he made modest promises to bring not-so-new innovations such as ATM cards to a place with few local banking options. But it wasn’t long before the bank got a new name, Moonstone, and new target customers in the high-risk cryptocurrency and cannabis industries, The Wall Street Journal reports. It also got a new shareholder: Sam Bankman-Fried’s crypto-trading firm, Alameda Research LLC.

Funds

Embedded Ventures held the first closing of its $100 million inaugural fund. The firm invests in early-stage startups with applications that can serve the Department of Defense, focusing on digital engineering, advanced manufacturing and space operations. To date, the fund has invested in Akash Systems Inc., Chromatic 3D Materials, Inversion, KittyCAD, Slingshot Aerospace and Skyryse.

Momenta launched its Industry 5.0 Fund, which is targeting $100 million, to focus on the digital transformation of energy, manufacturing, smart spaces and supply chains across Europe and North America. The firm’s portfolio includes manufacturing optimization platforms Litmus, Raven and SmartEx; industrial digital infrastructure technology providers Edge Impulse, Expeto and Xage; and autonomous mobility startups Agtonomy, EquipmentShare and Fixposition.

People

Growth equity investor Centana Growth Partners added Sarah Mears Kim as partner. She was previously chief financial and business officer of Archipelago Analytics.

Direct-to-consumer rug startup Ernesta appointed Jesse Selnick as chief financial officer and Rosa Glenn as chief merchandising officer. Mr. Selnick was most recently CFO at Sight Sciences. Ernesta was founded in November, and raised a $25 million Series A round from investors including Addition and True Ventures.

Identity verification provider Veriff said Javier Ortega joined the company as chief revenue officer. He was previously chief sales officer at Hopin. Veriff counts Accel, IVP and Y Combinator as investors.

Exits

Crisp, an open-data platform for the retail industry, acquired electronic data interchange provider Integral Group for an undisclosed amount. Backers of Crisp include Firstmark Capital, 3L Capital and Spring Capital.

Agribusiness farm management provider CropX Technologies acquired precision irrigation company Tule Technologies for an undisclosed sum. CropX is backed by TAL Ventures, Germin8 Ventures, Innovation Endeavors, Finistere Ventures, Armada Investment and others. Tule counts Y Combinator as an investor.

Enko, a Mystic, Conn.-based crop health startup, raised $80 million in Series C funding from Eight Roads, Nufarm, Endeavor8 and Akroyd LLC. The company develops novel sustainable products for farmers to protect their crops from pests and disease.

Fairphone, an Amsterdam-based sustainable smartphone startup, picked up a €49 million (about $53 million) investment. Existing backers including Quadia and DOEN Participaties were joined by new investors Invest-NL and ABN AMRO Sustainable Impact Fund in the round. Fairphone integrates fair and recycled materials into its product portfolio and seeks to create further awareness around fairness and sustainability in the electronics industry.

The Exploration Company, an open space exploration startup based in France and Germany, secured €40.5 million (about $44 million) in Series A financing. Co-led by EQT Ventures and Red River West, the round included contributions from Promus Ventures, Cherry Ventures, Vsquared Ventures, Omnes Capital, July Fund, Partech, Possible Ventures and Habert Dassault Finance.

Freemodel, a home renovation startup, landed $19.5 million in Series A funding from QED Investors, LL Funds, RWT Horizons, FJ Labs, 1984 Ventures, 1Sharpe Ventures and Crossbeam Venture Partners.

Nobl9, a Waltham, Mass.-based service level observability platform, collected a $15.8 million investment from ServiceNow, Cisco Investments, Battery Ventures and CRV.

RocketRez Inc., a Canada-based ticketing and business operations software platform powering mid-market tours and attractions, closed a $15 million Series B round. Growth investor Level Equity led the funding, with Charles Chen joining the company’s board.

Select Star, a San Francisco-based automated data discovery and governance platform, closed a $15 million Series A round. Lightspeed Venture Partners led the investment, which included additional support from Bowery Capital, Sozo Ventures and Pebblebed.

BridgeWise, an Israel-based provider of investment research tools formerly known as Deshe Analytics, fetched a $13 million investment. Group 11 led the round, which included support from L4 Venture Builder and others.

Optilogic, an Ann Arbor, Mich.-based supply chain design software startup, snagged a $13 million investment led by MK Capital.

Nexus, an Austin, Texas-based software platform for video game developers, picked up a $10 million investment. Griffin Gaming Partners led the round, which included participation from Sony Innovation Fund, Valhalla Ventures, Pace Capital and S3 Ventures.

Orbital Sidekick, a San Francisco-headquartered space-based hyperspectral intelligence startup, grabbed a $10 million investment. Led by Energy Innovation Capital, the round included contributions from Williams, Oneok Inc., 11.2 Capital, Syndicate 708, In-Q-Tel and others.

Addressable, a Web3 marketing startup, secured $7.5 million in seed funding. Lead investors Viola Ventures and Fabric Ventures were joined by Mensch Capital Partners and North Island Ventures in the round.

• ChatGPT creator releases tool to detect AI-generated text, calls it ‘unreliable’
   
• Stocks cap strong January with gains as investors look to Fed meeting
   
• Snap warns of sales drop after revenue growth stalls
   
• U.S. company offers advanced drones to Ukraine for one dollar, with some costs
   
• Mangled voice-to-text messages are embarrassing users
   
• Spotify adds users, reports loss after big investments in podcasts
   
• AMD’s profit plunges amid weaker PC sales
   

• Instagram's co-founders are mounting a comeback (Platformer)
   
• Column: The real aim of big tech’s layoffs: bringing workers to heel (Los Angeles Times)
   
• The cleanse (AVC)

This newsletter was compiled by Yuliya Chernova, 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.

Follow us on Twitter: @wsjvc