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Shield Capital Raises More Than $120 Million for Defense Tech
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By Yuliya Chernova, WSJ Pro
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Good day. Defense-technology startups selling to national security agencies will get a boost from larger budgets and growing urgency on the part of the U.S. and European governments to invest in preparedness in the wake of Russia’s invasion of Ukraine, say the founders of venture firm Shield Capital.
San Francisco-based Shield, which invests in startups developing technology with dual-use commercial and defense applications, raised more than $120 million toward its first fund.
Shield’s founders and managing partners are entrepreneur Raj Shah, who previously led the Defense Innovation Unit at the Department of Defense and earlier served as an F-16 fighter pilot in Iraq, and Philip Bilden, co-founding member of private-equity firm HarbourVest Partners and a former U.S. Army Reserve military intelligence officer.
Some Shield companies, such as geospatial intelligence provider HawkEye 360 Inc., have recently been engaging with national security customers in support of NATO’s assistance to Ukraine, according to Mr. Shah.
“People finally realized there is a struggle between authoritarianism and free nations, and some of the technologies that keep us safe are coming from the commercial world,” he said.
Shield leads seed and Series A rounds and plans to invest in about 15 to 20 companies in the cybersecurity, artificial intelligence, drones and autonomous vehicles, and space sectors. It currently has a portfolio of 24 companies.
Even before the war in Ukraine, Mr. Shah said, Silicon Valley companies had been increasingly interested in working with national security agencies.
“I don’t think it’s an issue,” Mr. Shah said of prior tech-employee backlash against military work. “The vast majority of engineers want to work on exciting problems that are difficult and that matter,” he added.
And now on to the news ...
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Groq Inc. is among AI chip makers navigating increased lead times at semiconductor foundries.
PHOTO: GROQ/REUTERS
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AI Chip Startups Pull In Funding as They Navigate Supply Constraints
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Investors are funneling billions of dollars into startups that make chips designed for artificial-intelligence applications, which have largely avoided the supply-chain constraints and backlogs faced by larger chip makers, startup executives, investors and industry analysts say.
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AI chip startups make special-purpose processors designed to power natural-language processing, deep learning and other AI techniques. They also tend to target specific applications in areas such as autonomous vehicles.
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Together, these startups secured an estimated $9.9 billion in venture capital across 170 deals last year, more than triple the total funding for AI chip startups in 2020, according to market-research firm PitchBook Data Inc.
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$15 Billion
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A consortium of private-equity firms including Elliott Management Corp. is in advanced talks to buy TV-ratings company Nielsen Holdings PLC for about $15 billion including debt, WSJ reports.
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After Walt Disney, Robert Iger Heads to the Metaverse
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Robert Iger spent decades helming a company known for its animated characters. For his next act, the former Walt Disney Co. boss is backing a startup that celebrities and others are using to create avatars for the much-hyped metaverse, The Wall Street Journal’s Sarah E. Needleman reports. In his first career move since leaving the entertainment company in November, Mr. Iger has taken a board seat with Los Angeles-based Genies Inc. He is also an investor in the business, one of five fledgling tech companies he’s recently backed. Other Genies investors include Mary Meeker’s Bond Capital, Breyer Capital and New Enterprise
Associates.
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Public’s Inflation Expectations Hit Record in February
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Households’ expectations of the near-term path of inflation surged back to record levels in February, amid growing worries that it will become harder to borrow money in coming months, according to a report Monday from the Federal Reserve Bank of New York, the Journal reports. Respondents to the bank's monthly survey see inflation hitting 6% a year from now, up from 5.8% in January. That matches the reading seen in November of last year and is the highest reading in a poll that dates back to 2013.
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Oatly’s Growing Pains Trip Up Pioneer of Oat Milk
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Swedish company Oatly Group AB created a global oat milk craze. Now it’s falling behind on the one thing it was supposed to do: make oat milk, the Journal reports. In the past two years, Oatly has drawn a star-studded cast of investors, erected clever billboards in major U.S. cities and touted its oat milk as a climate-friendly alternative to dairy. Sales of the company’s take on milk have soared, helping turn oat milk into the fastest-growing dairy alternative in the U.S. In May, its IPO won the company a valuation of roughly $10 billion.
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But a troubled U.S. expansion left it unable to fully capitalize on the demand it created, leaving an opening for competitors from more-established food companies to gain ground.
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SPAC News
Blank-check company Rosecliff Acquisition Corp I canceled its plan to combine with Gett, which specializes in facilitating corporate ground transport services, citing market conditions. The deal, which valued the business at about $1 billion, was announced in November. London-based Gett is listed in the portfolios of Target Global Management, VNV Global and Access Technology Ventures.
Funds
Texas Medical Center doubled the size of its TMC Venture Fund to $50 million. The fund, which focuses on digital health and medical device companies, launched in 2017.
People
Hodinkee Inc., a media and commerce company devoted to watches, appointed Jeffery Fowler as chief executive. He was previously at Farfetch. New York-based Hodinkee is backed by investors including TCG, LVMH Luxury Ventures, True Ventures, Future Shape and GV.
Healthcare navigation platform HealthJoy appointed Ryan Ashburn as chief revenue officer. He was previously president and chief revenue officer at BrightTALK. Chicago-based HealthJoy is backed by investors including Health Velocity Capital, U.S. Venture Partners, Chicago Ventures and Epic Ventures.
Exits
Applied Intuition Inc., a developer of software for autonomous vehicle development, acquired Mechanical Simulation Corp., a vehicle dynamics simulation software provider. Terms weren’t disclosed. In November, Applied Intuition said it raised a $175 million Series D round at a $3.6 billion valuation. Investors in the round included Addition, Coatue Management, Andreessen Horowitz, General Catalyst and Lux Capital.
On-demand healthcare analytics provider Clarify Health acquired behavior change platform company Embedded Healthcare for an undisclosed amount. Last March, San Francisco-based Clarify said it secured $115 million in Series C financing from Insight Partners, Spark Capital, Concord Health Partners and others.
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Moove, an Amsterdam-headquartered provider of revenue-based vehicle financing across Africa, raised $105 million in Series A2 equity and debt. Led by Speedinvest, Left Lane Capital and thelatest.ventures, the round included participation from AfricInvest, MUFG Innovation Partners, Latitude and Kreos Capital.
Bazaar, a Pakistan-based business-to-business e-commerce and fintech platform, scored $70 million in Series B funding. Dragoneer Investment Group and Tiger Global Management led the round, which included participation from Valley Capital, Defy Partners, Acrew Capital, Wavemaker Partners, B&Y Venture Partners and Zayn Capital.
MediLink Therapeutics, a China-based startup developing an antibody-drug conjugate pipeline, closed a $70 million Series B round. LYFE Capital and Qiming Venture Partners led the investment, which included contributions from Legend Capital, Loyal Valley Capital and Highlight Capital.
Socotra Inc., a San Francisco-based startup that offers cloud software for insurance companies to make it cheaper and easier to launch new products, completed a $50 million Series C round. Insight Partners led the funding, which included contributions from 8VC, Portage Ventures, Brewer Lane Ventures, MS&AD Ventures and Nationwide Ventures.
Rumble, an Austin, Texas-based network discovery and asset inventory provider, secured $15 million in Series A financing led by Decibel Partners.
Tender Food, a Boston maker of plant-based meat products, picked up a $12 million seed investment. Lowercarbon Capital led the round, which saw participation from Rhapsody Venture Partners, Safar Partners, Bread and Butter Ventures, MCJ Collective and Unovis Asset Management.
Metaverse Game Studios Inc., a blockchain game development studio, landed a $10 million investment. Pantera Capital, Animoca Brands, Solana Ventures and Everyrealm co-led the round, which included additional support from OKX Blockdream Ventures, Mechanism Capital, Morningstar Ventures, Huobi Ventures, Shima Capital and others.
Stellar, an Austin, Texas-based provider of credit-building and financial tools to underserved communities, snagged a $7 million investment. Co-led by Acrew Capital and Trust Ventures, the funding included contributions from Accomplice Ventures, Fiat Ventures, Permit Ventures, Kindergarten Ventures and others.
J2 Health, a startup whose technology enables healthcare organizations to optimize provider network performance, nabbed $4.5 million in seed funding led by Primary Ventures, Tiger Global Management and BoxGroup.
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Markus Braun testified at a parliamentary committee in Berlin in November 2020. PHOTO: FILIP SINGER/ZUMA PRESS
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