Good day. Health-wearables companies Whoop and ŌURA have raised a combined total of nearly $1.5 billion in venture funding in the past six months. What do these megarounds say about the state of the digital health venture market? Are funds simply flowing to the strongest startups, or is the sector careering toward another bubble? Please email responses to vcnews@wsj.com.

Last week, we asked about your calculus regarding where to live and work in light of various tax proposals around the country. Here are edited and condensed responses:

• Leslie Feinzaig, founder and general partner at Graham & Walker Venture Fund: I live and work in Seattle, and invest in early-stage tech companies across the U.S. I'm watching carefully where these new taxes are being considered, as are all the founders in my portfolio. Starting a company is an irrational choice—you work way harder and earn much less than you would in a corporate job. You may fail at any time, and frequently do fail ultimately. Investing in early-stage companies is irrational, too—the odds are long and your capital is tied up for years if not decades. Most people would never choose to do this given the alternative, but as a society, we need them to, because that's how jobs are created. The federal government, in administrations led by both parties, has long recognized that to incentivize people to take that risk, you have to reward it. Tax codes are incentives. I fear for the states that remove the incentive, because they're also disincentivizing their own future job creators.
   
• Ilya Bodner, founder of Columbus, Ohio-based Goodwin Co.: Ohio has always been friendly towards startups and we chose to double down here in the Midwest for lower cost of living, access to great talent at reasonable prices, and flexibility to be in larger metros like New York City in a matter of a short flight. In fact, not being in a high-profile state is an advantage for tech companies like ours that can avoid the pressure of higher wages, costs and so on.
   
• Hunter Walk, partner at Burlingame, Calif.-based Homebrew: QSBS [Qualified Small Business Stock] hasn't specifically impacted how we structure any of our investments—although I've seen others optimize for it. Homebrew IV is personal capital (versus that of LPs). We've given up a fee structure to play for outcomes, so their tax efficiency is an even bigger part of our upside. 100% of the risk, 100% of the outcome is directly hitting our pockets. And as a result, I am supportive of the changes to QSBS—especially the tiered multiyear phasing—instituted federally in 2025.

And now on to the news...

Megafund rally. U.S. venture fundraising began to strengthen in the first quarter after a multiyear decline. Still, the capital flowing back into the asset class is benefiting just a handful of firms. Venture funds in the U.S. raised $47.8 billion through March, according to market-data firm PitchBook. That figure points to a significant recovery from last year, when venture funds collected just $66.7 billion for the entire year, the lowest annual sum since 2017, according to PitchBook.

• Andreessen Horowitz collected $15 billion, while Joshua Kushner’s Thrive Capital raised $10 billion across several funds, representing most of the first quarter's capital sum.
   
• Other firms that announced fundraisings of more than $1 billion this year include Lux Capital and Kleiner Perkins.

OpenAI said it has acquired TBPN, an online talk show that aims to compete with Bloomberg and CNBC in by-the-minute analysis of technology news and executive interviews. OpenAI declined to disclose the terms of the transaction. While TBPN’s audience remains modest, averaging around 70,000 viewers per episode across various online platforms, the show has become popular among Silicon Valley power players who consider it more supportive of their industry than traditional news outlets. Chief executives who have appeared as guests include Meta Platforms’ Mark Zuckerberg, Microsoft’s Satya Nadella and OpenAI’s Sam Altman.

• More: Why OpenAI Decided to Buy TBPN, Tech’s Hottest News Show

Venture investors are looking toward new technologies and hardware that integrates AI into the physical world. From advanced forms of infrastructure to systems for improving interactions between humans and machines, venture is already making bets on artificial intelligence’s next act. WSJ Pro previously explored a surge in global venture funding for physical AI this year. We then asked readers where they believe the next frontier is for artificial intelligence. Their responses paint a picture of the wide-ranging opportunities created when an emerging technology crosses the digital divide and enters our material world.

People

Toyota’s growth fund, Woven Capital, appointed Mia Panzer as chief operating officer and Michiko Kato as chief investment officer. Prior to joining Woven, Panzer was senior vice president of finance and operations at Carmera. Kato was previously chief financial officer at Abeja.

Battery Ventures promoted Max Schireson and Roland Anderson to partner. Before joining the firm, Schireson was chief executive officer of MongoDB. Anderson was previously at Symmetric Capital.

EPG, a Singapore-headquartered prefabricated data-center modules supplier, closed on more than $100 million in Series B+ financing led by Decarbonization Partners.

Coder, an Austin, Texas-based platform for AI development infrastructure, secured $90 million in Series C funding. Funds managed by KKR led the round, which included participation from Qube Research & Technologies, Uncork Capital and others.

Cognichip, a Redwood City, Calif.-based AI semiconductor design startup, snagged $60 million in Series A funding. Seligman Ventures led the round, which included additional support from SBI Investment, Mayfield, Lux Capital and others.

Linx Security, a New York-headquartered identity security and governance platform, scored $50 million in Series B funding. Insight Partners led the round, which included participation from Cyberstarts and Index Ventures.

Manna Air Delivery, a Dublin-based drone delivery provider, raised $50 million in Series B funding from investors including Schooner Capital, ARK Invest and Molten Ventures.

Via Separations, a Watertown, Mass.-based industrial separations technology provider, picked up $36 million in new funding from investors including Climate Investment, Aramco Ventures, Embark Ventures and Safar Partners.

Alien, a San Francisco-based startup building trust infrastructure for the agentic economy, fetched $7.1 million in pre-seed funding led by Initialized Capital.

Soma Energy, a Vancouver-headquartered startup using AI to unlock existing grid capacity and accelerate time to power for data centers, emerged from stealth with $7 million in seed and pre-seed funding from investors including Category Ventures, RRE Ventures and Uncork Capital.

Miravoice, a San Francisco-headquartered startup bringing AI automation to market research phone surveys, was seeded with a $6.3 million investment led by Unusual Ventures.

Numos, a San Francisco-based AI platform for enterprise finance teams, grabbed nearly $4.3 million in seed funding led by General Catalyst.

• Wanted: Head of Human AI Solutions. The New Jobs Being Created by AI

• Maine Is About to Become the First State to Ban New Data Centers

• U.S. Regulator Sues Three States in Defense of Prediction Markets

• The Epic 50-Year Story of Apple, Told Through the WSJ Archive

• ElevenLabs releases a new AI-powered music-generation app (TechCrunch)
   
• India AI startup Sarvam raises funds at $1.5 billion valuation (Bloomberg)
   
• America’s AI boom is leaving the rest of the world behind (Rest of World)

This newsletter was compiled by Matthew Strozier and Zachary Cole.

Share your tips, comments and questions: vcnews@wsj.com

The team: Matthew Strozier, Yuliya Chernova, and Brian Gormley.

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