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Pritzker Family Launches $190 Million Venture Fund
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By Marc Vartabedian, WSJ Pro
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Good day. Timing the market has never been easy—including when to launch a venture-capital fund. That’s true of The Pritzker Organization’s announcement that it has started a venture unit, called 53 Stations, with a $190 million fund to target seed and early-stage startup deals. TPO is the family office for Thomas Pritzker, who is the executive chairman of Hyatt Hotels.
Kevin King, a founder and managing partner of the new venture wing, said drawing on one limited partner will give Chicago-based 53 Stations the freedom to invest aggressively during the current down market in which venture firms have broadly slowed their investing pace and raised fewer new funds. The state of the market, while not the sole reason, was a motivating factor to start the fund in 2022, King said.
“Had we been in a 2021-type environment, we might have been more apprehensive about launching the fund,” King said, referencing a year that saw a frenzy of deal-making activity and high valuations for startups. “The irony across markets is that the best time to deploy capital is often when it’s most difficult to raise it. TPO knows that you have to lean into those points when it feels less ideal and sometimes lean out when everything seems flushed.”
King acknowledged that the slump could persist, which could make it harder for startups to raise capital down the road. But he hedged that by saying that 53 Stations isn’t looking to back startups that will depend on large amounts of outside capital to operate.
“We’re looking for companies that can live within their own cash flow,” King said.
Note to readers: The WSJ Pro VC newsletter will take a break for Thanksgiving and will be back on Monday.
And now on to the news...
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Sam Altman is returning to OpenAI as CEO. PHOTO: JOHN G MABANGLO/SHUTTERSTOCK
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Altman to return as CEO. OpenAI said Sam Altman will return as chief executive of the artificial-intelligence startup that he co-founded, ending a dramatic five-day standoff between him and the board that fired him, The Wall Street Journal reports. OpenAI said the parties were “collaborating to figure out the details.” The company announced the formation of a new initial board that won’t include three of the four board members involved in removing Altman.
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The new board will include Bret Taylor, the former co-CEO of Salesforce; Larry Summers, the former Treasury secretary; and Adam D’Angelo, the only member of OpenAI’s previous board to remain. Taylor will be the chairman, the company said. Altman won’t be on the initial board.
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The previous board and Altman’s camp also agreed to conduct an independent investigation into his conduct, the decision to oust him last week and its aftermath, a person familiar with the matter said.
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Binance Founder Changpeng Zhao Steps Down, Pleads Guilty
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The chief executive of Binance, the largest global cryptocurrency exchange, stepped down and pleaded guilty to violating criminal U.S. anti-money-laundering requirements, in a deal that might preserve the company’s ability to continue operating, according to court documents, WSJ reports. Changpeng Zhao appeared in Seattle federal court Tuesday and entered his plea, according to court records. Prosecutors accused Binance, which Zhao owns, of facilitating transactions with sanctioned groups. Binance encouraged U.S. users to obscure their location so the firm could avoid complying with U.S. anti-money-laundering laws, prosecutors said.
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Ex-CEO of NSO Group Raises $33.6 Million for Israeli Cyber Startup
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Shalev Hulio, former chief executive of the company behind the controversial Pegasus spyware, has raised a $33.6 million second round of funding for his startup, Tel Aviv-based Dream Security, amid the Israel-Hamas war, WSJ Pro's Yuliya Chernova reports.
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“Israel is resilient,” said Michael Eisenberg, co-founder and general partner at venture firm Aleph who co-led the deal with Dovi Frances, founder of Los Angeles-based Group 11. “This company has been delivering flawlessly to the customers under the circumstances,” Eisenberg said about Dream, which uses artificial-intelligence tools to provide cybersecurity services for critical infrastructure.
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Dream Security was valued at $200 million in the financing, Hulio said. The company’s founding team includes Sebastian Kurz, a former chancellor of Austria. The third co-founder is Gil Dolev, whose prior cyberintelligence company Wayout was acquired by NSO Group, which developed Pegasus.
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Funds
Canadian climate-tech seed investor Active Impact Investments has raised more than 70 million Canadian dollars (about $51 million) for its third fund, which has a target of C$120 million.
Morgan Stanley Investment Management held the final close of its Morgan Stanley Next Level Fund at its $50 million target to continue focusing on early-stage technology investments in underrepresented founders. At close, the fund had deployed a quarter of its capital across nine startups.
People
Bessemer Venture Partners promoted Yael Schiff to vice president. Prior to joining the firm in 2021, she was director of expansion at Via Transportation.
AI assistant You.com appointed Jason Egnal as chief marketing officer and Saurabh Sharma as vice president of product and design.
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AI21, a Tel Aviv-based generative AI and large language model startup, added $53 million in new Series C funding, bringing the round total to $208 million and the company valuation to $1.4 billion. Investors in the latest tranche included Intel Capital and Comcast Ventures.
Quotient Therapeutics, a startup focused on discovering new therapeutics from the study of genetic variation at the cellular level, launched with a $50 million investment from Flagship Pioneering. The company is based in Cambridge, Mass. and the U.K.
Privy, which builds APIs to onboard users to consumer crypto products, raised $18 million in Series A funding. Paradigm led the round, with Managing Partner Matt Huang joining the company’s board.
Vendelux, a New York-based event intelligence platform, secured $14 million in Series A funding led by FirstMark Capital.
Expanso, a distributed big data processing startup, landed $7.5 million in seed funding led by General Catalyst and Hetz Ventures.
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Nvidia said sales more than tripled in its most-recent quarter. PHOTO: CFOTO/ZUMA PRESS
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