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Founders Want to Make Deals. Investors, Not So Much.
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By Yuliya Chernova, WSJ Pro
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Good day. Any stall in the venture market appears to be on the part of investors.
Founders are pitching investors at an above-average level, while investor engagement is middling, according to an analysis by Dropbox DocSend of activity on its pitch-deck sharing platform from the start of the year through the middle of the current quarter, compared with historical data.
“It’s an investor’s market and investors have their pick of solid founders,” said Justin Izzo, research lead for DocSend, adding that founders must make a bigger effort to cut through the noise.
Founder activity, referring to the number of decks founders send, has been 20% above average, while investor activity, which includes the number of decks investors review and the time they spend with them, was simply average, DocSend found.
Still, there’s more action on the platform so far this year than in the fourth quarter of 2022. During that quarter, founder activity was 15% above its average, while VC activity was 10% below average, Mr. Izzo said. For its comparison, DocSend uses the weighted average of five historical benchmarks spanning up to three years.
Founder activity may be on the rise for several reasons, Mr. Izzo said. Some founders may need capital after holding out and burning through funding as the venture market weakened last year, while others may be encouraged by the improving performance of tech stocks this year, he said.
DocSend noted a record average 13.3 decks per founder shared during the week ending Feb. 13, Mr. Izzo said. The previous weekly record for founder decks was set during the boom times, in October 2021, when 12.8 deck links were created on average per founder, he said.
Founders are looking for money, for better or worse.
And now on to the news...
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A part-time worker for Instacart filled customer orders in New Jersey last year. PHOTO: MICHAEL LOCCISANO/GETTY IMAGES
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Instacart Inc. generated sharply higher sales and profit in the fourth quarter, according to people familiar with the matter and an internal memo, as the company prepares for its highly anticipated initial public offering of stock, The Wall Street Journal reports.
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The grocery-delivery company told employees on Tuesday that its revenue increased more than 50% in the fourth quarter, compared with the same period a year earlier, while gross profit rose more than 80%, according to a memo viewed by the Journal.
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Instacart’s full-year revenue increased 39% to about $2.5 billion for 2022, people familiar with the matter said, as the company reaped the benefits of a push into advertising while it has struggled to increase order volume at the same pace it did during the height of the Covid-19 pandemic.
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Close Ally of FTX Founder Sam Bankman-Fried Pleads Guilty to Fraud
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A third member of FTX founder Sam Bankman-Fried’s inner circle pleaded guilty to fraud charges and agreed to assist federal prosecutors, expanding the pool of cooperating witnesses against the former head of the failed crypto exchange, WSJ reports. Nishad Singh, the company’s former director of engineering, pleaded guilty to six criminal counts, including conspiring to commit securities and commodities fraud, during a hearing Tuesday in federal court in Manhattan. “I’m unbelievably sorry for my role in all of this and the harm that it has caused,” Mr. Singh, 27 years old, told U.S. District Judge Lewis Kaplan.
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At Marc Benioff’s Salesforce, It’s One Big Family—Until Trouble Hits
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Through the sky’s-the-limit boom years, Marc Benioff, the co-founder and chief executive of Salesforce Inc., told employees they were bound together like family. In today’s leaner times, he is laying off thousands of them, WSJ reports.
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Since its founding in 1999, the San Francisco-based business-software company has grown fast and spent big. Salesforce put its name on skyscrapers in San Francisco, Tokyo, London and New York City and, according to people familiar with the arrangement, agreed to pay actor Matthew McConaughey more than $10 million a year to be a creative adviser and TV pitchman. Mr. Benioff added around 30,000 employees from the start of 2020 until the end of last year, roughly a 60% increase.
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In January, the company said 8,000 workers had to go. “It’s an unfortunate part that you have to say goodbye to folks who, in many cases, are your friends and you have relationships with,” Mr. Benioff said in an interview. “But, ultimately, the success of the business has to be paramount.”
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Funds
Bain Capital Ventures closed two new oversubscribed funds totaling $1.9 billion following on the heels of last year’s $500 million crypto fund. The firm’s tenth flagship fund will invest across all stages, while its fourth select fund will focus on growth stage investments. With offices in Boston, New York, San Francisco and Palo Alto, Calif., BCV focuses on fintech, application software, infrastructure and commerce technology.
SixThirty Ventures closed its third fund with $66 million in commitments to continue investing across the fintech, insurtech, privacy and digital health sectors. Limited partners include Edward Jones and Reinsurance Group of America. To date, the new fund has backed Sharegain, Sagewell, T-Care, CoverGo, Angle Health and Phylum.
People
Pinecone Systems Inc., a provider of technology enabling companies to power search applications with artificial intelligence, named Bob Wiederhold as president and chief operating officer. He was previously chief executive of Couchbase. Pinecone counts Menlo Ventures and Wing Venture Capital as backers.
Deals
Venture-capital firms Mastry Ventures and General Catalyst have acquired a majority stake in Athletes First. The football agency was founded in 2001 and represents athletes, coaches, front office personnel and broadcasters.
Exits
Torc Robotics, a self-driving vehicle technology subsidiary of Daimler Truck AG, agreed to acquire Algolux Inc. for its intellectual property and expertise in the areas of computer vision and machine learning. Terms weren’t disclosed. Montreal-based Algolux is backed by investors including Forté Ventures, Drive Capital, Investissement Quebec, GM Ventures, Generation Ventures and Intact Ventures.
Simpli.fi, an advertising automation platform that is backed by private-equity firms Blackstone and GTCR, acquired fellow adtech company Bidtellect for an undisclosed sum. Bidtellect previously raised funding from investors including G20 Ventures and Valhalla Partners.
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Divert Inc., a West Concord, Mass.-based company tackling food waste, raised $100 million in growth equity from investors including Enbridge Inc. and Ara Partners, with Enbridge contributing $80 million toward the investment. The company also announced a $1 billion infrastructure development agreement with Enbridge. Founded in 2007, Divert’s technology prevents waste by maximizing the freshness of food, recovers edible food to serve communities in need and converts wasted food into renewable energy.
Temporal, a Seattle-based cloud application development platform, added $75 million in funding from Greenoaks Capital Partners, Amplify Partners, Index Ventures, Sequoia Capital, Madrona and Addition Ventures.
Una Brands, a Singapore-based e-commerce aggregator, raised $30 million in pre-Series C equity and debt funding led by Northstar Group. White Star Capital and Alpha JWC Ventures participated in the company’s Series B round last year.
Quantifind Inc., a Palo Alto, Calif.-based financial crimes risk management provider, snagged $23 million in funding. Lead investor DNS Capital was joined by Citi Ventures, U.S. Venture Partners, Valor Equity Partners and S&P Global in the round.
Bonusly, a Boulder, Colo.-based employee recognition and rewards platform, landed $18.9 million in Series B funding. Ankona Capital led the round, which included participation from FirstMark Capital, Access Venture Partners and Next Frontier Capital.
Really, an Austin, Texas-based startup offering a phone service powered by a decentralized mobile network, picked up an $18 million seed investment from Polychain, Floodgate Partner Mike Maples Jr. and others.
Gable, a San Francisco- and Israel-based startup that helps distributed companies manage office space for their workforce, fetched a $16 million investment. SemperVirens Venture Capital and Foundation Capital co-led the round, which included additional support from Tishman Speyer Ventures, Ulu Ventures and January Ventures.
Archway Software, a Redmond, Wash.-based creator of a platform for banks to modernize and personalize digital customer interactions, secured $15 million in Series A financing led by Madrona and WaFd Bank. Steve Singh, managing director at Madrona, joined the company’s board.
SepPure Technologies, an industrial chemical separation startup with offices in Singapore and Canada, completed a $12 million Series A round. Led by SOSV, the investment included contributions from Seeds Capital, EPS Ventures and others. The company’s nanofiltration technology uses pressure-driven filtration instead of heat, which reduces energy consumption by 90%. The technology is applicable across industries including chemicals, pharmaceuticals, semiconductor, maritime and plant-based oils.
Savant Labs, a San Mateo, Calif.-based automation platform for data analysts, was seeded with an $11 million investment. Cota Capital led the round, which saw participation from WestWave Capital, Bloomberg Beta, Uncorrelated Ventures, Handshake Ventures and others.
PteroDynamics, a vertical takeoff and landing aircraft developer, completed a $7.5 million seed round from investors including Kairos Ventures and Lavrock Ventures.
Cycle, creator of a product feedback system, snagged a $6 million investment from Boldstart Ventures, eFounders, base case capital, 20VC Fund, SV Angel, BoxGroup, Hummingbird Ventures, Script Capital, Tokyo Black and others.
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The Chips Act was approved by Congress last year in an effort to boost U.S. semiconductor manufacturing. PHOTO: HEATHER AINSWORTH FOR THE WALL STREET JOURNAL
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