Good day. Steve Sloane, a partner at Menlo Park, Calif.-based Menlo Ventures, spoke with WSJ Pro Venture Capital to offer his take on the broad shifts taking place in venture capital and to address a central question facing one sector that has been a target for investors–robotics. Here are excerpts of his responses which have been edited for clarity.

WSJ Pro: Can you talk about investors, maybe yourself included, looking down the food chain at earlier stages to source deals amid the hot venture market?

Mr. Sloane: I think some of these business models have just become so predictable in a way. If you're a SaaS company and you're at a million in [annual recurring revenue] versus 4 million in ARR, is that really that big of a difference in terms of the risk profile of that company? If you believe it's a good market and [you’ve found a similar company and good founder] and especially [if] you can get a little bit of a lower valuation, is that better risk adjusted?

WSJ Pro: An attractive space right now is robotics applied to supply chain and logistics. Where do these startups stand with profitability?

Mr. Sloane: For robotics companies, most of them are not at that point yet where you can really say, hey, this is the model we've nailed it down. There's a little bit of a hybrid dynamic between traditional capital purchases where we're going to purchase a bunch of robotics and maybe we'll pay for maintenance. [Versus] the robot as a service model, where you're just renting robots and bringing them into your warehouses and fulfillment centers has taken off as well. I expect them to [reach profitability] but I think there's still just a lot of tuning that needs to happen.

And now on to the news...

Gig Economy. DoorDash Inc., Grubhub Inc. and Uber Technologies Inc.’s Eats division are suing New York City over its law permanently capping the amount of commissions the apps can charge restaurants to use their services, the latest move in a growing clash between the platforms and local regulators.

• The three largest food-delivery companies filed the suit in federal court in New York late Thursday, contending that the fee cap is harmful and constitutes government overreach. The limit on fees has cost the companies hundreds of millions of dollars combined through July, they said in the suit.
   
• A permanent cap will likely require them to rewrite contracts with restaurants, reduce marketing in the city and raise fees for consumers, the companies said in the complaint.

Yahoo Inc. said it named Jim Lanzone as its new chief executive, turning to a digital-media veteran to jump-start growth and explore strategic opportunities for the legacy internet player, WSJ reports. Mr. Lanzone, who joins Yahoo after serving as CEO of dating app Tinder, has worked in digital media for 23 years. He was earlier chief executive of CBS Interactive, where he launched the CBS All Access streaming service that was a precursor to ViacomCBS Inc.’s Paramount+ service.

Echo Global Logistics Inc. plans to sell itself to private-equity firm Jordan Co. LP in an approximately $1.3 billion deal that would take private one of the largest freight brokers in a red-hot U.S. shipping market, WSJ reports. The agreement would value Chicago-based Echo at $48.25 a share, representing a roughly 54% premium over its closing price Thursday, the companies said Friday. The deal is expected to close in the fourth quarter and is subject to shareholder approval. Echo and Jordan said the deal would provide Echo with additional financial resources and more flexibility to continue building its technology and data science platform. Freight brokerages have been investing billions to automate their businesses as digital startups jockey for a bigger share of the domestic transportation management sector.

Funds

Revaia, formerly known as Gaia Capital Partners, held the final closing of its first growth fund with €250 million ($295 million) in commitments, exceeding the initial target of €200 million. The female-founded sustainability-focused fund is aiming to invest in about 15 European startups.

Female-headed Crowberry Capital launched a $90 million seed and early-stage fund to invest in Nordic business-to-business and business-to-consumer startups. The European Investment Fund is the lead limited partner in Crowberry Fund II, which expects to close on an additional $40 million next year. Reykjavik- and Copenhagen-headquartered Crowberry Capital raised $40 million for its first fund in 2017.

Scout Ventures, which helps military veteran and intelligence professional founders gain access to capital, closed its third fund with $55 million. Limited partners in the fund include The New Mexico State Investment Council and Auctus Investment Group.

People

Life insurance startup Ethos appointed Jennifer Liu as chief product officer, Anan Kashyap as chief financial officer, Troy Thompson as chief actuary and David Zhang as chief strategy officer. San Francisco-based Ethos recently raised $100 million from investors including Softbank Vision Fund 2, Sequoia Capital, Accel, GV and General Catalyst, in a round valuing the company at $2.7 billion.

Crexi, a commercial real estate marketplace and technology platform, added Tim Laehy as chief financial officer and Kris Cheh Beck as chief legal officer. Mr. Laehy was previously at Coinbase. Ms. Beck was at United Capital. Los Angeles-based Crexi is backed by Industry Ventures, Lerer Hippeau and Jackson Square Ventures.

Amenify Corp. said Danish Chopra joined the company as chief technology officer. He was most recently head of engineering at Foxpass. Denver-based Amenify, which provides services to apartment dwellers, is backed by RET Ventures.

Exits

Canadian legaltech startup Clio acquired Lawyaw, a developer of digital workflows for legal documents, for an undisclosed amount. Clio, which was valued at $1.6 billion after a Series E round earlier this year, is backed by investors including Bessemer Venture Partners, Acton Capital, TCV and Omers Growth Equity. San Francisco-based Lawyaw is listed in the portfolios of Ataria Ventures, Draper Associates, Magic Fund, Narwhal Ventures, Revel Partners and Y Combinator.

Electric acquired Denton, Texas-based fellow IT support provider Techvera for an undisclosed sum. New York-headquartered Electric raised a $40 million Series C round earlier this year and counts Bessemer Venture Partners, GGV Capital, 01 Advisors, Primary Venture Partners, Bowery Capital, Vintage Investment Partners and Greenspring Associates as investors.

Agile Robots AG, a Munich- and Beijing-based intelligent robotics startup, closed a $220 million Series C round. SoftBank Vision Fund 2 led the funding, which included contributions from GL Ventures, Sequoia Capital China and others.

Obsidian Therapeutics Inc., a Cambridge, Mass.-based startup developing a treatment for metastatic melanoma, snagged $115 million in Series B funding. TCG Crossover led the round, with Partner Cariad Chester joining the board. Additional new investors RA Capital Management, Surveyor Capital, Cowen Healthcare Investments, Deep Track Capital, Logos Capital, Pivotal BioVenture Partners, Samsara BioCapital and Soleus Capital also supported the new funding, alongside previous backers Atlas Venture, Vertex Ventures HC, Amgen Ventures and Bristol Myers Squibb.

Amagi, an Indian provider of cloud-based SaaS technology for broadcast and connected TV, scored more than $100 million in funding from Accel, Avataar Ventures, Norwest Venture Partners and Premji Invest.

Vouch Inc., a San Francisco-based insurance platform for startups, picked up a $90 million investment, bringing the total raised by the company to $160 million. Investors in the company include Index Ventures, Redpoint Ventures, Silicon Valley Bank, Ribbit Capital, Sound Ventures and Y Combinator.

Evommune Inc., a Los Altos, Calif.-based developer of therapies to treat chronic inflammatory diseases, completed an $83 million Series A round from investors including Andera Partners, LSP and Pivotal bioVenture Partners.

Addi, a Bogota- and São Paulo-based buy now pay later startup, landed a $75 million investment led by Greycroft. New investors GGV Capital, Citius Capital and Intersection Growth Partners also participated in the round, along with existing backers Union Square Ventures, Andreessen Horowitz, Citius, Endeavor Catalyst, Foundation Capital, Monashees and Quona Capital.

Lycia Therapeutics Inc., a South San Francisco, Calif.-based startup that is developing treatments for cancer and autoimmune conditions, closed an oversubscribed $70 million Series B round. Lead investor Redmile Group was joined by Versant Ventures, Cowen Healthcare Investments, Eli Lilly & Co. and Alexandria Venture Investments in the funding. Tim Anderson of Cowen Healthcare Investments will join the board.

Leap, a San Francisco-based platform offering end-to-end services for students pursuing international education and careers, raised $55 million in Series C financing. The round was led by Owl Ventures, and included additional support from Jungle Ventures and Sequoia Capital India.

Numan, a U.K.-based digital men’s health platform, raised $40 million in Series B funding led by White Star Capital.

Eleos Health Inc., a Boston- and Tel Aviv-based behavioral healthcare startup using voice-based AI, was seeded with a $6 million investment. Lead investor aMoon Fund was joined by lool ventures and others in the round.

MaxRewards Inc., an Atlanta-based startup that automates maximizing credit card rewards, cash back and benefits, secured $3 million in seed funding. Dundee Venture Capital and Calano Ventures co-led the round, which included additional support from Fintech Ventures Fund and Service Provider Capital.

• Judge orders Apple to loosen app store restrictions in mixed verdict
   
• Bitcoin to bucks: crypto fans borrow to buy homes, cars—and more crypto
   
• WhatsApp to offer encryption on cloud backups, a new step in privacy arms race

• Is it so bad to take money from Chinese venture funds? (TechCrunch)

This newsletter was compiled by Marc Vartabedian and Zachary Cole.

WSJ Pro Venture Capital is a premium service of The Wall Street Journal. We cover venture capital and the global startup ecosystem. Share your tips, comments and questions: vcnews@wsj.com

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