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The Evolution of Open Source
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By Yuliya Chernova, WSJ Pro
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Good day. Nvidia is relying on open-source AI models for its autonomous-bot building platform. Meanwhile, Liu Jiang, founder of Sunflower Capital, told us she is especially interested in investing in open-source software now. We would like to hear from you: How do you invest with an eye to the evolution of open source? Email responses to vcnews@wsj.com.
Last week, we asked how the antitrust activity against Alphabet's Google and Meta Platforms could affect startups and venture capital. Here are the responses we received.
Nnamdi Okike, managing partner and co-founder of 645 Ventures: The recent antitrust activity against Big Tech is a good thing for startups and venture-capital firms as well. This is especially true in light of AI, which for the first time in decades introduces the prospect of legitimate competitors who can take revenue and market share away from tech behemoths. While the acquisitions of companies like Instagram for $1 billion might have looked attractive to VCs at the time, they choked off much greater returns for founders and VCs, not to mention legitimate competitors to these incumbents.
Tomasz Tunguz, founder, Theory Ventures: The implications of the latest antitrust activity on startups will depend on the remedies required by the government. The government requiring that Google separate its publisher, advertiser and exchange technologies could reopen the exit market, but something similar would need to happen to Meta to yield any significant impact. The number of smaller online ad networks has effectively disappeared, as have alternate ad exchanges (perhaps with the exception of The Trade Desk and Applovin). So, if the government breaks up Meta in a way that creates more competition, that could reopen the market—but the network effects in ads operate similarly to the stock market (with exchanges and brokers), and this
could reinforce those same dynamics over time.
Chris Gardner, partner, Underscore VC: While every VC dreams of investing in the next Google or Meta, the VC industry depends on a steady pipeline of innovation which can be stifled in sectors with not enough competition or incumbents that behave anti-competitively. That said, antitrust actions this big, like AT&T in the '80s and Microsoft in the '90s, while very rare, did indeed result in more innovation, more investment and more startups in the affected sectors.
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And now on to the news...
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Michael Grimes was drawn into the government this year, partly because of his ties to Elon Musk. Photo: DAVID PAUL MORRIS/BLOOMBERG NEWS
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The Morgan Stanley Star in the White House. The White House is getting its own investment banker. Michael Grimes, who spent three decades at Morgan Stanley as Silicon Valley’s top IPO rainmaker, is helming President Trump’s U.S. Investment Accelerator, an office to encourage domestic and foreign companies to invest money in the U.S., The Wall Street Journal reports.
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It is part of the Trump administration’s broader “America First” agenda that aims to reinvigorate U.S. production and manufacturing, while reducing reliance on imports.
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The role is a new one and its success will hinge on whether companies want the government’s help. Grimes will have a unique pitch for companies to come to him: An inside line to cut through red tape, help with permits and construction sites and work with state officials to get projects moving faster, people familiar with the plans said.
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StepStone Tops $700 Million for Latest Growth-Equity Fund
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Publicly traded private-markets manager StepStone Group hit its fundraising goal for a new vehicle that aims to back rapidly growing technology and healthcare companies without the high risk of loss that often comes with such deals, WSJ Pro’s Chris Cumming reports.
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StepStone Tactical Growth Fund IV hit its $700 million cap for limited-partner commitments and reached $705 million including the general-partner stake, the firm said Friday.
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The new vehicle, which the firm raised in about 18 months, edged ahead of its predecessor in size, despite much tougher fundraising conditions. The firm’s third Tactical Growth vehicle, a 2020 vintage, closed with $696 million.
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Former Google Security Chief Goes to VC Firm Ballistic
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Ballistic Ventures hired Phil Venables, a longtime security executive, as a venture partner, continuing a trend of senior cybersecurity figures leaving corporate and government roles for investor jobs, WSJ Pro’s James Rundle reports.
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Venables joins a roster of former security figures at the San Francisco-based investment firm, which focuses on seed and early-stage companies, including ex-New York Times journalist Nicole Perlroth, longtime VC investor Ted Schlein, and David Hahn, the former group information security officer of Wells Fargo.
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Funds
CIV, a Los Angeles-based firm that invests in and helps build companies focused on critical infrastructure, closed its inaugural fund with $210 million in commitments.
Kompas closed its second fund with €150 million to continue investing in European startups providing technology focusing on innovation in manufacturing and the built environment.
Digital asset investment firm RockawayX raised $125 million for its second early-stage venture capital fund.
People
Artificial intelligence-focused investor Radical Ventures appointed Andy Bredar as an investor at the firm. He was previously at Anthropic.
AIX Ventures, another AI-focused firm, said Jason McBride joined as a partner. He previously served as a partner at M12.
Deals
AI coding agent startup Zencoder acquired Machinet.
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Chainguard, a Kirkland, Wash.-based startup helping organizations eliminate threats in their software supply chains, landed $356 million in Series D funding co-led by Kleiner Perkins and IVP. This latest round values the company at $3.5 billion.
Manychat, a Palo Alto, Calif.-based company focusing on conversational AI and automation across social and messaging platforms, scored $140 million in growth capital. Summit Partners led the investment, with Partner Sophia Popova joining the board.
Omnidian, a Seattle-headquartered provider of protection and performance plans for solar and energy storage systems, secured a commitment of more than $87 million led by B Capital.
Granite Bio, a Switzerland-based startup developing antibodies targeting inflammatory, autoimmune and fibrotic conditions, emerged from stealth with $100 million in funding, including a $70 million Series B round led by Forbion and Sanofi Ventures.
Fora, a New York-headquartered travel agency startup, collected $60 million in Series B and C funding led by Thrive Capital and Insight Partners.
Healthee, a New York-based health benefits navigation platform, raised $50 million in Series B funding led by Key1 Capital.
Push Security, a browser-based identity threat detection and response platform with offices in Boston and London, grabbed $30 million in Series B funding led by Redpoint Ventures.
Steadily, a landlord insurance provider, fetched $30 million in Series C funding led by Two Sigma Ventures at a $355 million valuation.
Overture Life, a Palo Alto, Calif.-based startup providing in vitro fertilization automation technology, added $20.6 million in new funding from investors including Overwater Ventures, GV and Khosla Ventures.
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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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As financial stress mounts, chains like Dollar Tree and Academy that cater to the budget-conscious are seeing more of a new class of shoppers.
Businesses need to prepare for the AI-driven rise of a relentless, always-on economy.
Private-equity firms see opportunity in a sector they once considered too unreliable: advertising.
As tariff wars raise supply-chain uncertainty and green initiatives see a pushback, some renewables-focused companies are forging new relationships, including in the defense industry.
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Wall Street got a lift from tech stocks Thursday. PHOTO: BRENDAN MCDERMID/REUTERS
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