Good day. As big tech lays off workers, it’s worth keeping an eye on how corporate venture investors react.

Signs of a slowdown appeared earlier this year. In a Silicon Valley Bank survey carried out in July, 38% of corporate venture capitalists who responded said the pace of investment over the past month had slowed due to the tumult in the stock market. Thirty-four percent said more than half of their portfolio companies were making budget cuts in order to extend their runway.

Historically, corporations have slowed venture investing during down markets. But in comments to Pro Venture Capital, some corporate investors were confident, and said they wouldn’t be deterred by the choppy waters. Corporations have often been knocked as fair-weather venture investors, but they have been shedding that image in recent years. 

"We do not believe there will be a direct correlation between the turmoil and layoffs that have specifically been hitting many of the large tech incumbents this fall and the appetite for corporations to support their existing CVC arms,” said Neal Hansch, chief executive of Silicon Foundry. Neither did he see the shifting markets holding back plans for new strategic venture investment. Silicon Foundry is a venture advisory firm that, among other things, helps corporations get into the asset class.

How corporations react to crosscurrents in the stock markets will have a broad effect on venture. Last year, there were 11,000 venture deals that included corporate participation, a 57% increase from 2019, according to the Silicon Valley Bank report, which was published in September.

This year, the percentage of U.S. venture deals with corporate participation is expected to rise to 26%, up from the 24% level of the last three years, the study said.

And now on to the news...

New Fund. Boston-based private-markets firm HarbourVest Partners has collected $4.2 billion to invest in private-equity deals alongside other fund managers, WSJ Pro reports.

• The firm said it closed its HarbourVest Partners Co-Investment Fund VI LP above a $3.5 billion target and well ahead of the $3 billion raised for the pool’s predecessor, which closed in 2019. Investors that have disclosed commitments to the newest fund include the Los Angeles City Employees’ Retirement System, the Ventura County Employees’ Retirement Association in California and the U.K.’s Borders to Coast Pensions Partnership.
   
• HarbourVest aims to invest in 45 to 55 deals from the new pool alongside buyout or growth-equity fund managers, according to a memo presented in 2021 to the Ventura pension system, which approved a $35 million commitment. The firm can also use up to 5% of the co-investment fund’s capital to back other funds with an eye toward gaining access to co-investment deals from those fund managers, the memo indicated.

Seaside Equity Partners, founded by a former managing director and partner from alternative investment firm Wafra Inc., rounded up more than $218 million for the first closing of its second fund, people familiar with the offering said, WSJ Pro reports. The first closing puts the firm’s Seaside Equity Partners II strategy to back smaller companies near a $225 million goal, the people said. They added that the firm aims to wrap up fundraising for the offering across two parallel vehicles well above the target before year-end. The amount raised so far already surpasses the size of San Diego-based Seaside’s first fund, which closed early last year with at least $160 million, ahead of a $125 million target, WSJ Pro Private Equity reported at the time. Chicago-based Shannon Advisors provided placement services for the firm’s debut fund and is also placing the newest effort, according to a regulatory filing.

China’s securities regulator has given Manulife Investment Management approval to take full ownership of its local fund-management arm, a first in a country that is slowly opening up its $3.7 trillion mutual fund market, The Wall Street Journal reports. The Canadian-owned firm will become the first foreign fund manager to convert a local joint venture into a fully-owned entity. It applied for full ownership after a rule change in April 2020 that scrapped a previous 51% cap for foreign shareholders. Manulife isn’t the first foreign firm to get approval for a fully-owned local mutual-fund manager. BlackRock Inc. and Fidelity International have been granted permission to do so—but neither firm previously ran a mutual-fund company with a local partner. The approval is part of the wider opening up of China’s financial market, which previously forced foreign firms to operate using joint ventures. Foreign banks, securities houses, and credit-rating firms no longer need local partners.

Customers of beleaguered crypto exchange FTX are losing hope they will ever see their money again, The Wall Street Journal reports. The company’s massive financial problems began spilling into the open early this month, and FTX was quick to halt withdrawals from its international unit. American customers had hoped they might be luckier, but many of them haven’t been able to get their money out either. “My blood is boiling,” said Matthew Way, a fundraiser for an Illinois orchestra who has about $1,800 stuck at FTX. Where the money could be—and whether it will ever arrive—is anyone’s guess. FTX filed for bankruptcy on Nov. 11. John J. Ray, the company’s new CEO who also unwound Enron, said in a court filing Thursday that “only a fraction” of FTX’s digital assets have been located and secured. Determining how much cash is left has been difficult too, according to the bankruptcy filings, since FTX didn’t keep an accurate list of its bank accounts.

Funds

HC9 Ventures closed its inaugural fund with $83 million in commitments to make early-stage investments in healthcare software and services businesses. To date, the firm has invested in mental health and substance use care provider Forge Health, mental health education and navigation provider Psych Hub and vision insurance startup XP Health.

People

Security and compliance automation platform Drata hired Adam Aarons as chief revenue officer. He replaces Troy Markowitz, who is assuming the role of chief operating officer. Mr. Aarons was previously at Okta, Classy and BMC Software. San Diego-based Drata counts Iconiq Growth, Alkeon Capital, Salesforce Ventures, GGV Capital, Cowboy Ventures and Leaders Fund as investors.

Exits

Amagi, a provider of cloud broadcast and targeted advertising services to broadcast and streaming TV platforms, acquired Streamwise, a data aggregation and reporting platform for content distributors. Terms weren’t disclosed. Amagi is backed by investors including General Atlantic, Accel, Norwest Venture Partners and Avataar Ventures.

FogPharma, a Cambridge, Mass.-based cancer therapeutics developer, scored $178 million in Series D funding. New investors ARCH Venture Partners, Milky Way Investments and Fidelity Management & Research Co. participated in the round, alongside previous backers VenBio Partners, Deerfield Management, GV, Cormorant Asset Management, funds and accounts advised by T. Rowe Price Associates Inc., Invus, Farallon Capital Management, HBM Healthcare Investments, Casdin Capital and PagsGroup.

Opna Bio, a Switzerland- and South San Francisco, Calif.-based startup focused on novel oncology therapeutics, launched with $38 million in Series A financing. Led by Longitude Capital and Northpond Ventures, the round included participation from Menlo Ventures.

SponsorUnited, a sports and entertainment intelligence platform, picked up a $35 million growth investment. Spectrum Equity led the funding, with Managing Director Chris Mitchell joining the company’s board.

Fairmat, a Paris-headquartered carbon fiber-based composite recycling startup, closed a €34 million Series A round. Temasek and Compagnie Nationale à Portefeuille co-led the investment, which included contributions from Singular, Pictet Group and The Friedkin Group.

Capitol, a New York-based data platform for healthcare insurers, was seeded with a $10 million investment. Lead investor 468 Capital was joined by Designer Fund, Fuel Capital, Tokyo Black, AirAngels, Sanno Capital and others in the round.

Diffblue Ltd., a U.K.-based artificial intelligence software development startup, secured an $8 million investment. AlbionVC led the round, which included additional support from IP Group, Parkwalk, Hostplus and Oxford Technology and Innovations EIS Fund.

QualSights, a Chicago-based consumer insight technology provider, raised $7.7 million in Series A funding led by 4490 Ventures.

Prado, an Austin, Texas-based customizable e-commerce platform for meal delivery companies, snagged $5.8 million in seed funding. Bonfire Ventures led the round, which saw participation from Slauson & Co., January Ventures, Alumni Ventures, Bridge Investment Group and Supply Change Capital.

WOVE, a Lancaster, Pa.-based startup offering customized wedding rings, completed a $3.9 million seed round. Springdale Ventures led the investment, which included support from Outlander VC, RareBreed Ventures, Context Ventures and Early Light Ventures.

Efficient Capital Labs, a New York-headquartered startup providing capital to software-as-a-service businesses, closed on $3.5 million in seed funding led by 645 Ventures. The company also signed a $100 million debt facility from Community Investment Management.

• Twitter lays off some sales employees after they committed to Twitter 2.0
   
• Domino’s Pizza invests in electric-vehicle fleet to help stores recruit drivers
   
• JD.com cuts executive pay as China’s tech firms tighten belts
   
• Foxconn hires chip veteran in diversification drive
   
• Duke Energy enters into Amazon cloud deal
   
• Amazon’s customer satisfaction slips with shoppers
   
• Best tech gifts 2022: Our guide to gadgets this holiday shopping season

• Two Estonian citizens charged with running a series of crypto scams totaling $575 million (Coindesk)

This newsletter was compiled by Marc Vartabedian 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, Eric Sylvers and Marc Vartabedian.

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