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Three Questions With GP Bullhound Partner Joakim Dal
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By Marc Vartabedian, WSJ Pro
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Good day. First-quarter venture numbers revealed just how much the market has slowed from a year earlier, when the public market began cooling off. Joakim Dal, a partner with technology advisory and investment firm GP Bullhound, shared via email the advice he is giving portfolio companies to help them survive this tough period. Founded in 1999, GP Bullhound has invested in companies including Slack and Spotify Technology SA, and has offices in the U.S., Europe and Asia. Here are excerpts of our exchange with Mr. Dal.
WSJ Pro: The amount of capital VCs invested in the first quarter was down compared with the same quarter a year ago. What are you telling portfolio companies as they weather this dry spell?
Mr. Dal: This is the best time to build a business. Competitors are shutting down and customers are looking for solutions to ever growing lists of problems. If you can make your client more effective, this is the time to call them. Your competitors face the same headwinds so it’s down to who can stomach it the most.
WSJ Pro: Venture firms are sitting on a record pile of dry powder. Should startups expect to eventually be bailed out by those funds once the market begins to thaw?
Mr. Dal: No bailouts. Investors will have extra scrutiny on these companies, which unfortunately will have been part of these ‘bad capital allocation’ times. Founders and investors that don’t stick their head in the sand but face the new reality will be better equipped for the good times that eventually come.
WSJ Pro: Late-stage investing was hit particularly hard at the same time the IPO market is essentially at a standstill. How worried should these late-stage companies be?
Mr. Dal: These markets are tied together. Of course, the problem was exacerbated by companies staying private for longer. However, many of these companies have now proven that they can make the switch from unprofitable to profitable growth. That flexibility in a business model is sought after in financial markets everywhere, so when public markets open up again there are some great companies waiting to tap into it.
And now on to the news...
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Apple CEO Tim Cook introduces Apple Watch Series 7 at a 2021 event. Many of Apple’s patent battles with smaller companies hinge on technology used in the Apple Watch.
PHOTO: APPLE INC/REUTERS
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When Apple comes calling. It sounded like a dream partnership when Apple Inc. reached out to Joe Kiani, the founder of a company that makes blood-oxygen measurement devices. He figured his technology was a perfect fit for the Apple Watch. Soon after meeting him, Apple began hiring employees from his company, Masimo Corp., including engineers and its chief medical officer. Apple offered to double their salaries, Mr. Kiani said. In 2019, Apple published patents under the name of a former Masimo engineer for sensors similar to Masimo’s, documents show. The following year, Apple launched a watch that could measure blood oxygen levels.
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“When Apple takes an interest in a company, it’s the kiss of death,” Mr. Kiani told The Wall Street Journal. “First, you get all excited. Then you realize that the long-term plan is to do it themselves and take it all.”
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Mr. Kiani is one of more than two dozen executives, inventors, investors and lawyers who described similar encounters with Apple.
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Apple said that it doesn’t steal technology and that it respects the intellectual property of other companies. It said Masimo and other companies cited in the Journal’s article are copying Apple, and that it would fight the claims in court.
Read the full article.
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Alphabet’s Google Combines AI Research Units Brain and DeepMind
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Alphabet Inc.’s Google merged its two main artificial-intelligence research units, a major reshuffling as tech companies jockey for leadership in an area quickly reshaping business, The Wall Street Journal reports. Google said the new unit, Google DeepMind, would combine the existing Brain and DeepMind research groups into one team. The unit will be led by Demis Hassabis, the co-founder and CEO of DeepMind, which Google purchased for about $500 million in 2014. Jeff Dean, the previous head of Google Research overseeing the Brain team, will move to a new role as chief scientist. Google said he would lead the company’s “most critical and strategic technical projects related to AI,”
including a new series of powerful AI programs.
More AI coverage:
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Drop in Transportation Stocks Foreshadows Weakening Economy
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Economically sensitive stocks, like those of transportation and small-cap companies, are trailing the broader market, reflecting growing investor concern about a potential recession, WSJ reports. The Dow Jones Transportation Average, which tracks 20 large U.S. companies ranging from airlines to railroads to truckers, has underperformed the Dow Jones Industrial Average by about 6.9 percentage points since early February. Small-cap stocks, often perceived as riskier and more sensitive to economic changes than their larger peers, have also fallen behind in recent weeks after rallying to kick off the year. Historically, transportation and small-cap stocks have led in market recoveries but also sold off faster during periods
of economic downturns when demand for goods, materials and travel slow.
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Elon Musk's Starship Exploded: What's Next for SpaceX?
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PHOTO COMPOSITE: GEORGE DOWNS
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Starship’s launch and subsequent explosion is just the start of the spacecraft’s long road to carrying humans to different planets. WSJ’s George Downs reports on what’s next for SpaceX and the most powerful rocket ever built.
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Funds
Gilde Healthcare raised €600 million for its Gilde Healthcare Venture&Growth VI fund to invest in startups focused on digital health, medtech and therapeutics across Europe and North America. The new fund will invest between €10 million and €60 million per new portfolio company.
Autotech Ventures, an investor in ground transportation startups, closed its third fund at $230 million. The Menlo Park, Calif.-based firm now has over $500 million under management and has invested in more than 40 companies.
Business Development Bank of Canada’s investment arm, BDC Capital, launched a new 150 million Canadian dollar Sustainability Venture Fund to make seed to Series B investments in Canadian startups.
People
IVP named Tamar Yehoshua as venture partner, Davey Nickels as senior vice president and head of talent, and Blair Shane as partner and chief marketing officer. Ms. Yehoshua was most recently chief product officer at Slack. Mr. Nickels was previously head of people at Robinhood. Ms. Shane was formerly CMO at Sequoia Capital.
Growth-stage investment firm Elsewhere Partners added Rita Selvaggi as operating partner. She was most recently chief executive of ActivTrak.
C5 Capital, which invests in cybersecurity, space and advanced nuclear energy, appointed Pete Cooper as managing partner and global head of partnerships. He previously served as deputy director of cyber defense in the U.K.’s Cabinet Office.
San Francisco-based Piva Capital, which focuses on emerging technology companies transforming industry, appointed Adam Lasics as partner of strategy and operations and promoted Roxanne Tully to principal. Mr. Lasics was previously at GE Ventures. Prior to joining Piva, Ms. Tully was at BioLite.
Akeyless Security, a SaaS-based secrets management platform with offices in Israel and New York, appointed Suresh Sathyamurthy to the post of chief marketing officer. He was most recently CMO at SingleStore.
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Abdera Therapeutics Inc., a startup developing new precision radiopharmaceuticals for cancer, recently closed a $110 million Series B round, following the company’s $32.5 million Series A round in 2021. Abdera’s investors include Versant Ventures and Amplitude Ventures.
Odeko, a New York-based provider of operations software that optimizes supply chain management for cafes, scored $53 million in Series D funding led by B Capital Group.
Halcyon, a cyber resilience platform designed to defeat ransomware, closed a $50 million Series A round led by SYN Ventures.
Weaviate.io, an Amsterdam-based open-source vector database, snagged $50 million in Series B funding led by Index Ventures.
Yonder, which offers a lifestyle rewards credit card, raised £62.5 million in Series A funding consisting of £12.5 million in equity and £50 million in debt. Northzone and RTP Global co-led the investment.
eniferBio, a Finnish sustainable food startup, raised an €11 million Series A round led by Aqua-Spark. The company makes fungal protein from the byproducts of food and agricultural processes.
Xenocor, a Salt Lake City-based developer of a surgical imaging device, secured $10 million in Series A financing led by GenHenn Venture Fund I.
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Rising rates and volatility in the banking industry are paving the way for a golden age for private debt.
Managers of private-credit and debt funds say they are ready and willing to step in to fill the gaps opened by a pullback in leveraged loans from banks in recent months, in some cases by clubbing together on debt packages. What’s more, private-credit firms see an opportunity to secure investments at more attractive terms for themselves, and they have plenty of dry powder to back those deals.
In a special report for WSJ Pro subscribers, we explore the ever-expanding world of private credit, opportunities for distressed debt and even how the environment shapes the market for collateralized-loan obligations. And, a list of the new rulers of private credit.
Read the special report here.
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BuzzFeed CEO Jonah Peretti said Thursday the company is laying off 15% of its staff and making plans to end BuzzFeed News. PHOTO: SPENCER PLATT/GETTY IMAGES
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