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Coinbase Leads Corporate VC; Medical Device VCs Move Into Big Data, AI
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By Brian Gormley, WSJ Pro
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Good day. Entrepreneurs are devising new ways to apply big data and artificial intelligence to medical devices, but those technologies must be grounded in products that directly improve patients’ health or quality of life, said venture capitalists speaking Tuesday at the DeviceTalks Boston conference.
Medical-device venture capitalists once concerned themselves chiefly with products that fix mechanical problems—a stent to prop open a diseased artery, a spinal implant to relieve back pain. Nowadays, they also are evaluating devices that have a digital component, such as those that can monitor patients remotely. This is forcing them to get up to speed quickly on tools like biosensors and machine-learning algorithms.
While collecting data is relatively easy, using it to revolutionize patient care isn’t. Many startups haven’t shown they can make headway in that regard, investors said.
Jonathan Gertler, the moderator of a panel about how the pandemic changed medical-device venture investing, said he frequently sees “we-can-measure-this, but-we-don’t-know-what-to-do-with-it,” business plans. If the data measured has no actionable impact, it’s not a viable proposition, said Dr. Gertler, a managing director of venture firm BioVentures Investors and chief executive of consulting and investment-banking firm Back Bay Life Science Advisors.
Darshana Zaveri, founder and managing partner of Catalyst Health Ventures, said she bases investment decisions on the core value of a startup’s device or sensor. If artificial intelligence applied to data also can enable disease prevention, that is further upside, she added. “The base case has to be, does the device work as intended?” Ms. Zaveri said.
And now on to the news...
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People watch as the logo for Coinbase Global Inc. is displayed on the Nasdaq MarketSite at Times Square in New York. PHOTO: SHANNON STAPLETON /REUTERS
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Coinbase’s fintech startup binge. Coinbase Global Inc. backed at least 20 financial-technology startups between January and March, becoming the fintech sector’s biggest corporate venture investor in the first quarter, according to analytics firm CB Insights.
Shares of Coinbase slid after hours Tuesday as the company reported a loss and said the number of monthly transacting users declined from the previous quarter, The Wall Street Journal said. The stock fell 15% in late trading, after retreating 12% during the regular session. It is off by more than 70% so far this year.
Investors increasingly perceive financial markets are at a turning point, and as a result, have retreated from some of the most speculative investments, the Journal said.
Yet none of that appeared to slow Coinbase’s own dealmaking in the first quarter:
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Including fintech ventures, Coinbase invested in a total of 37 startups in the first quarter of 2022, making it the most active corporate venture capital investor in the first three months of the year, CB Insights said. Alphabet Inc. was the second most-active investor, announcing funding deals with 34 startups, followed by Salesforce Inc. with 25, the firm said.
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In the fintech startup market, Coinbase more than doubled the number of deals struck by its nearest venture-investing rival, crypto exchange FTX’s Alameda Research Ventures.
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Among other deals, Coinbase was an investor in digital asset platform Amber Group’s $200 million Series B round, led by Singapore sovereign-wealth fund Temasek Holdings. Other investors included Pantera Capital, Tiger Global Management, Sequoia China and Tru Arrow Partners.
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All told, global corporate venture funding in fintech startups over the first quarter fell to $7.8 billion, from $9.4 billion in the previous quarter, while deal volume rose to 192, from 173, CB Insights said.
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Coinbase in January said it had closed 150 funding deals in 2021, averaging a new deal every two and a half days.
The company has said its goal in funding other fintech ventures–even potential competitors–is to develop a strong ecosystem for innovation.
—Angus Loten
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Truist Financial Acquires Gamified Fintech Startup Long Game. Truist Financial Corp., operator of one of the nation’s largest commercial banks, has made an investment in gaming, acquiring Long Game Savings Inc., maker of a mobile app that rewards users for saving money.
The deal, led by Truist Ventures, the Charlotte, N.C.-based bank’s venture-capital arm, includes Long Game’s team of engineers and designers, The Wall Street Journal reported. Truist said it plans to operate Long Game as a standalone app for now in an effort to convert the app’s users to customers. Terms of the deal were not disclosed.
San Francisco-based Long Game had 12 bank and credit union customers prior to the Truist acquisition, said co-founder and CEO Lindsay Holden, with users spending around 13 minutes per session and saving around $60 per month, she said. Long Game has attracted “hundreds of thousands” of users since the company’s 2015 launch, according to Truist.
Long Game had raised $20 million and investors included Vestigo Ventures, Franklin Templeton, Thrive Capital and Collaborative Fund, Ms. Holden said.
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420%
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The jump in remote jobs in tech between January 2020 and last month. Remote work intensified because of the pandemic, The Wall Street Journal said, citing Tecna, a trade group for regional tech councils.
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Colombian Real Estate Company Gets $200 Million Series C Investment in Softbank-led Round. Habi, a real-estate company that is trying to create a digital marketplace for home buyers and sellers in Latin America, has raised $200 million in a Series C funding round, The Wall Street Journal’s Vipal Monga reports.
The round was led by venture capital firms Homebrew and SoftBank Latin America Funds. Also participating are Banco Mercantil del Norte S.A., Institución de Banca Múltiple, Grupo Financiero Banorte, Tiger Global Management, Inspired Capital, Clocktower Technology Ventures, Endeavor Catalyst and Henry Kravis, the co-founder of private equity firm KKR & Co.. Though Habi won’t disclose its financials, the latest funding round has pushed its valuation above $1 billion, said Brynne McNulty Rojas, the firm’s co-founder and chief executive.
The Bogota-based startup has expanded into Mexico City and 14 other markets in Spanish-speaking Latin America. It is trying to build real-estate and home-lending infrastructure in markets that have traditionally lacked such services, said Ms. Rojas.
Most housing markets in Latin America lack tools widely used in the U.S., such as the Multiple Listing Service, and information about homes is not easily found. Many homeowners in Colombia, for example, list their residences by putting up billboards in their windows, said Ms. Rojas.
Habi is trying to solve those problems by creating a listing service using proprietary data it is collecting from brokers, acting as a broker itself, to connect buyers to financial institutions. The company is also actively buying homes in the Latin American markets to sell.
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