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To the Proven Entrepreneurs Go the Spoils
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By Marc Vartabedian, WSJ Pro
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Good day. Raising capital to get a new startup off the ground in a down market can be tough for entrepreneurs. Something that can help: having a successful record of building companies.
As we have reported before, venture capitalists often revert back to funding so-called known quantities during market pullbacks.
“If you’ve been successful before, your ability to accumulate capital increases,” said Ernst & Young U.S. venture-capital leader Jeffrey Grabow.
Case in point is the $30 million that Apoorva Mehta, a co-founder of Instacart Inc., has raised for Cloud Health Systems, a new healthcare startup. The deal valued Mr. Mehta’s startup at $200 million.
Startups typically must generate at least a few million dollars in yearly revenue before they can raise at a valuation similar to Cloud Health, which was founded earlier this year and hasn’t yet launched any services.
And now on to the news...
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Apoorva Mehta, a co-founder of Instacart, in a 2016 picture. PHOTO: BECK DIEFENBACH/REUTERS
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New startup. Apoorva Mehta, a co-founder of Instacart Inc., is working on his next act after saying earlier this year that he would step down as executive chairman from the startup he built into a grocery delivery giant once it goes public, WSJ Pro reports.
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Mr. Mehta earlier this month raised $30 million for Cloud Health Systems, a new healthcare startup aiming to offer consumers medical consultations and other health-related services, according to people familiar with the matter. The funding round, led by venture firm Thrive Capital, values the company at $200 million, the people said.
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Greenoaks Capital, a venture firm that has previously backed Robinhood Markets Inc. and e-commerce service Coupang Inc., also invested in the round, the people said.
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Raised in a dismal funding environment for startups, the round shows the investment privileges that are still afforded to the most-established founders in Silicon Valley. Startups typically must generate at least a few million dollars in yearly revenue before they can raise at a valuation similar to Cloud Health, which was founded earlier this year and hasn’t yet launched any services.
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11,600
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The number of points in the U.S. where any electric vehicle can charge quickly, compared to the more than 145,000 places to refuel a gas-powered vehicle.
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Chinese Startups Try to Make It Big in the U.S.—Without the Backlash
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As U.S.-China ties fray and decoupling trends rise, dozens of Chinese startups are going against the tide, seeking ways to expand into the U.S. and other international markets, The Wall Street Journal reports. Many are driven in part by China’s slowing economy and toughened regulatory environment as well as the uncertainty of the zero-Covid policy, which in recent days sparked one of the largest nationwide protests that China has seen in decades. Others are inspired by the enormous global success of companies like TikTok owner ByteDance Ltd. and fast-fashion retailer Shein. But to avoid the kind of backlash as they expand that short-video app TikTok especially has faced, they
are moving their headquarters out of China or creating a separate entity in countries such as the city-island state of Singapore. Some are also renaming themselves and dropping references to their China roots, or developing separate products for the Chinese and international markets to underscore a separation of data or product management.
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BlockFi ‘Shocked’ by Fraud Allegations Against FTX, Lawyer Says
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BlockFi Inc. was shocked by allegations of systemic failures at FTX, with which it has extensive business, and now the cryptocurrency lender is working hard to return customer funds after filing for bankruptcy this week, a BlockFi lawyer said Tuesday, WSJ Pro reports. Jersey City, N.J.-based BlockFi, which secured a rescue loan from FTX in June to shore up its liquidity, reviewed unaudited FTX financial reports as part of due diligence it performed at the time of the transactions, said Joshua Sussberg, a lawyer for BlockFi, during its debut hearing in the U.S. Bankruptcy Court in Trenton, N.J. BlockFi filed for chapter 11 on Monday after the loan fell apart in the wake of FTX’s
collapse earlier in November. BlockFi, which also counts FTX as one of its largest borrowers, is an early victim brought down by FTX’s downfall in an exceptionally intertwined and lightly regulated sector. Over the past few months, since a drastic drop in crypto prices that has wiped out roughly two-thirds of the sector’s market value, crypto hedge fund Three Arrows Capital, digital-assets lender Celsius Network LLC and crypto brokerage firm Voyager Digital have filed for chapter 11 protection.
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Elon Musk’s Neuralink Set to ‘Show and Tell’ Latest Brain-Computer Advances at Event
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Elon Musk‘s neuroscience startup Neuralink Corp. is expected to give a progress report on its brain-implant technology in a highly anticipated streamed event Wednesday night, WSJ Pro reports. In a tweet last week, the company teased a demo for the event, which begins at 9 p.m. New York time, with a short video that slowly spelled out the message “please join us for a show and tell.” Some outside researchers said the video may indicate that a Neuralink device has been used to decode brain signals to type words on a screen, although they speculated that it would most likely be through a monkey or a wearable device. Neuralink has been testing its implant technology on nonhuman primates for several
years, including in April 2021, when the company released a video showing that a monkey implanted with two Neuralink devices could play a videogame called Pong as the device translated its brain activity into commands with the help of machine-learning software.
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Funds
Swedish truck maker Scania AB launched a new 2 billion Swedish kronor (about $190 million) venture-capital fund. Scania Growth Capital II will invest broadly in business-to-business technology such as software, products, solutions and services within mobility, connectivity, autonomous, electrification, smart factory and sustainability. The new vehicle will be managed by East Hill Equity, which has offices in Stockholm and Berlin.
Tokyo- and Palo Alto, Calif.-based Global Hands-On VC closed on one-third of a 15 billion yen (about $110 million) fund to invest in Japanese technology startups. Investors including Sojitz Corp., Sompo Light Vortex Inc. and SunBridge Corp. were participants in this first close.
People
Consumer-focused financial information and advice provider SmartAsset appointed Peter Silvio as chief technology officer. He was most recently CTO at Shutterstock. Last year, New York-based SmartAsset closed a $110 million Series D round from investors including TTV Capital, Javelin Venture Partners, Contour Venture Partners, Citi Ventures and New York Life Ventures.
Exits
Governance risk and compliance software provider RegScale acquired compliance-as-code platform GovReady for an undisclosed amount. In August, Tysons Corner, Va.-based RegScale said it raised a $20 million Series A round from investors including SYN Ventures, SineWave Ventures, Virginia Venture Partners and SecureOctane.
Dropbox is acquiring several key assets from Boxcryptor, a German cloud security provider, for an undisclosed sum. Boxcryptor is backed by Agile Partners.
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Joy, a San Francisco-based wedding planning and registry platform, scored $60 million in Series B funding led by General Catalyst. Stacy Brown-Philpot, formerly chief executive of Taskrabbit, joined the company’s board.
Greenwood Inc., an Atlanta-based Black- and Latino-focused digital banking platform, closed a $45 million investment led by Pendulum Holdings. Additional new investors Cercano Management, Cohen Circle, George Kaiser Family Foundation and NextEra Energy also participated in the round, along with existing backers Bank of America, Citi Ventures, PNC, Popular, Truist Ventures, TTV Capital and Wells Fargo.
Saltbox Inc., a co-warehousing and small business logistics provider, landed $35 million in Series B funding. Lead investors Cox Enterprises Inc. and Pendulum Holdings were joined by Playground Global, XYZ, Fundrise, Kapor Capital, Wilshire Lane Capital and others in the round. Andrew Davis of Cox Enterprises and Robbie Robinson of Pendulum joined the board.
OneRail, an Orlando, Fla.-based last-mile transportation visibility platform, raised $33 million in Series B funding co-led by Piva Capital and Arsenal Growth Equity.
Igloo, a Singapore-based insurtech startup, added $27 million in Series B funding, bringing the round total to $46 million. Investors in the new tranche included Cathay Innovation, BlueOrchard Finance, Women’s World Banking Asset Management, Finnfund and La Maison Partners.
Zylo, an Indianapolis-based software-as-a-service management provider, secured $31.5 million in Series C financing. Baird Capital’s venture team led the round, which included contributions from Spring Lake Equity Partners, Bessemer Venture Partners, Menlo Ventures, High Alpha and Coupa Ventures. Benedict Rocchio, partner at Baird Capital, was added to the company’s board.
Strategic Risk Associates, a Glen Allen, Va.-based integrated risk platform for the financial services and insurance Industries, completed a $12 million Series B round led by EJF Capital, JAM Fintop and Fintop Capital.
Propagate, a startup helping farmers to integrate fruit, nut and timber trees with animal or crop farming systems, closed a $10 million Series A round. Led by The Nest, the investment included additional support from Agfunder, Telus Pollinator Fund for Good, Techstars, Neglected Climate Opportunities and others.
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Elon Musk accused Apple of stanching free speech and claimed the tech giant had threatened to kick the Twitter app off the iPhone. PHOTO: RYAN LASH/TED
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Elon Musk’s Apple attack sets stage for public spat with risks for Apple, Twitter
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When layoffs happen at tech companies, this position is the first to go
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Inside Cisco’s NYC office, where 5,000 data points are being collected
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Solar-panel shortage snarls U.S. green-energy plans
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Twitter under Elon Musk abandons Covid-19 misinformation policy
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Aptos, Mysten valuations look sky-high with FTX out of the picture (The Information)
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