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What Changes When Corporate Investors Are in a VC Deal?
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By Marc Vartabedian, WSJ Pro
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Good day. At the Web Summit technology conference this week in Vancouver, British Columbia, venture investors and founders covered the many ways artificial intelligence has altered dealmaking. One topic discussed was how corporate investors have become a key part of AI dealmaking. We'd like to hear what these investors bring to the table and what is different about investing alongside them. Please email responses to vcnews@wsj.com.
Last week, we asked venture investors who are either based in Austin or do business there to comment on the region’s future as a tech hub. A recent report from venture-capital firm SignalFire showed that Big Tech and startup employment declined in the area last year. Here are responses, edited for length and clarity:
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Lauren DeMeuse, chief operating officer and partner at Theory Ventures: "To me, the SignalFire data seems to be reflective of overall hiring slowing down coupled with higher productivity expectations due to the proliferation of AI, vs. something specific to Austin. Many of the other Austin-based investors in my network are more bullish than ever on entrepreneurship in the area, and we also continue to see folks from coastal cities with strong technical backgrounds move here (and stay)."
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Roger Chen, partner at Silverton Partners: “By the time I moved to Austin in 2017, the tech ecosystem had already been growing for some time at a rapid rate. I believe we are on a secular trend up and to the right that will persist for the foreseeable future. When Covid hit, we saw a couple of years of exceptional growth that likely pulled forward some of the growth, and that may be what we’re seeing in the data as we settle back into the long-term trendline.”
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Jim Graham, managing partner of Arsenal Bridge Ventures: "Austin continues to build critical mass in the life sciences, with exciting developments at the boundary of artificial intelligence, robotics and brain-computer interface. On the company side, Austin lacks the scale of coastal life sciences hubs, but brain-computer interface companies Paradromics and Phantom Neuro recently closed Series A rounds and University of Texas spinout Erisyon continues to develop its innovative single-molecule protein-sequencing platform."
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And now on to the news...
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Sophie Purdom is a managing partner at Planeteer Capital as well as the venture firm’s solo general partner. PHOTO: EMMA BRAWLEY
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Climate-tech fund closes. Planeteer Capital, a New York venture firm led by Managing Partner Sophie Purdom, defied the odds this year by closing a $54 million first-time fund to invest in climate-tech startups, WSJ Pro reports. It took Planeteer two years to raise the fund, and the total collected was below the firm’s original target, according to Purdom. She initially targeted $75 million, and had set a hard cap of $100 million. Purdom said the capital she raised is sufficient to deploy on her strategy.
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One of Planeteer’s anchor investors is Mike Schroepfer, a former chief technology officer of social-media giant Meta Platforms, who has been investing in climate tech in recent years.
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An Ivy League university endowment as well as some corporations and foundations are also LPs, Purdom said. Pivotal Ventures, a venture investment and philanthropy organization founded by Melinda French Gates, is another LP.
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Meta and Palmer Luckey Are Teaming Up on a Defense Contract
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Meta Platforms had a messy split with its virtual-reality chief Palmer Luckey. Now, the two have reconnected to build high-tech headsets for the U.S. Army, The Wall Street Journal reports. Luckey’s defense company Anduril Industries and Meta said Thursday they will together build a line of new rugged helmets, glasses and other wearables that provide a virtual-reality or augmented-reality experience.
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The system, called EagleEye, will carry sensors that enhance soldiers’ hearing and vision—detecting drones flying miles away or sighting hidden targets, for instance. It will also let soldiers operate and interact with AI-powered weapon systems. Anduril’s autonomy software and Meta’s AI models will underpin the devices.
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Oregon Bill to Block PE Medical Deals Heads to Governor’s Desk
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Oregon lawmakers approved a bill to block private-equity firms from controlling healthcare practices, which analysts say would be the nation’s strictest ban on corporate influence in medicine, WSJ Pro reports. Oregon’s House on Wednesday approved the measure, which would prohibit non-physician investors from controlling medical practices and strengthen the state’s nearly 80-year-old prohibition on corporate medical practices. The state Senate passed the bill in April and it now heads to Gov. Tina Kotek.
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Funds
Harper Court Ventures Fund I, a new early-stage fund managed by MFV Partners, has launched with $25 million in commitments to invest in startups from the University of Chicago ecosystem.
Metalayer Ventures launched a $25 million stablecoin-focused fund.
People
Bitkraft Ventures, an investor focused on interactive media and entertainment, appointed Matt Halstead as a venture partner, and promoted Carlos Pereira and Jonathan Huang to general partner and partner, respectively.
Novo Holdings named Hongjie 'HJ' Hu as a partner within the growth investments team, where he will focus on medical technology and healthcare services investments.
PayPal Ventures said Ian Cox Moya was appointed as managing partner at the firm, while James Loftus has stepped down.
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ClickHouse, an open-source columnar-database-management system for real-time data processing and analytics, scored $350 million in Series C funding. Khosla Ventures led the round, which included participation from BOND, Bessemer Venture Partners and Lightspeed Venture Partners.
Radiant, an El Segundo, Calif.-based maker of mass-produced nuclear microreactors, completed a $165 million Series C round led by DCVC.
Empathy, a New York-based loss-support-services provider, raised $72 million in Series C funding. Adams Street Partners led the round, which included participation from General Catalyst, Index Ventures and others.
Hex, a San Francisco-based AI-powered workspace for data science and analytics, landed $70 million in Series C funding. Avra led the round, which included participation from Andreessen Horowitz and others.
Buildots, a Tel Aviv-based startup providing AI-powered construction management, closed a $45 million funding round. Qumra Capital led the investment, with Managing General Partner Boaz Dinte joining the company’s board.
Heron Power, a Scotts Valley, Calif.-based startup developing industrial power electronics, secured $38 million in Series A financing led by Capricorn Investment Group’s Technology Impact Fund.
Conduit, a Boston-based cross-border payments platform powered by stablecoins, collected $36 million in Series A funding co-led by Dragonfly Capital and Altos Ventures. Dragonfly’s Rob Hadick will join the board.
Rillet, an enterprise resource planning platform, raised $25 million in Series A funding. Sequoia Capital led the round, which included additional support from Oak HC/FT.
GridCARE, a Redwood City, Calif.-based startup that identifies and unlocks previously untapped grid capacity to accelerate AI infrastructure deployment, emerged from stealth with $13.5 million in seed funding led by Xora.
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Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.
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Big private-equity firms increasingly are taking two different approaches as they strive to expand, with most following an “asset light” strategy.
U.S. venture capitalists are racing to tap into China’s growing biotechnology prowess.
Some of the U.S. banks that cut ties with a leading industry climate group have shifted how they talk about their climate efforts.
Nespresso, purveyor of sophistication, wants to win over Gen Z coffee drinkers. It’s having to get more playful with its marketing to do so.
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ILLUSTRATION: THOMAS R. LECHLEITER/WSJ
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