Good day. Index Ventures, a venture firm with origins in Europe, is the envy of Silicon Valley.

A string of large startup exits could send more than $11 billion in proceeds to Index and its limited partners at a time when the venture market overall is still struggling to generate cash.

As the largest venture backer of software-maker Figma, Index has turned its $86.5 million investment in the company over the years into a stake worth nearly $6 billion, based on the most recently disclosed share volume and intraday Monday prices.

Figma’s IPO last week stunned the market when its shares jumped 250% in the first day of trading. Index sold about 5% of its holdings at the IPO price of $33, generating about $108 million, and continues to retain a stake of greater than 15% in Figma post-IPO. The stock fell by about 20% on Monday but is still trading well above its listing price. Figma provides browser-based collaboration tools to help users design websites, mobile apps and social media posts.

Index also reaped a windfall from the recent investment by Meta Platforms into Scale AI, which paid out shareholders, and Google’s pending acquisition of cybersecurity company Wiz.

Index, whose performance this year has been noteworthy among VC-watchers due to its smaller size compared with rivals, was among the earlier investors in each of these three companies, helping it to notch massive profits.

Read the full article here.

And now on to the news...

AI music. Startup ElevenLabs said it has launched a new service called Eleven Music that lets individuals and businesses generate their own music with its artificial intelligence model.

• Users enter a prompt in plain English, such as “create a smooth jazz song with a ‘60s vibe and powerful lyrics, but relaxing for a Friday afternoon,” and the startup’s AI model generates a tune within minutes, complete with vocals and instrumentals.
   
• With the launch, ElevenLabs—best known for its voice generation software—enters a fraught sphere where major music labels have already sued two music-generation startups, Suno and Udio, for their alleged use of copyrighted works to train their AI.

Read the full article here.

Recently formed Painswick Capital Management tapped growing investor appetite for secondhand private-equity deals involving a single company to raise about $1.5 billion for the firm’s debut secondary fund. The final tally for Painswick Capital Fund I surpassed the firm’s $750 million target and marks New York-based Painswick’s first fund since its founding last year by John Garcia in partnership with midmarket-focused AEA Investors, another private-equity firm in the city. Garcia remains nonexecutive chairman at AEA, where he had worked for more than two decades, including as chief executive. Garcia said he and certain partners at AEA committed a total of around 10% of the fund’s final tally, although that general partner commitment represented 20% of the fund’s initial $750 million target.

Read the full article here.

Taiwanese contract manufacturer Foxconn plans to work with partners to convert a former electric-truck factory in Lordstown, Ohio, into a plant making cloud computing hardware for artificial-intelligence applications, people familiar with the plans said Monday. It is a symbolic move for the American economy under President Trump, who signed a budget bill that ended subsidies for electric vehicles but has promoted U.S. manufacturing of AI equipment, such as computers and chips, as well as the construction of data centers to perform AI tasks. Once the site of a General Motors car factory, the Lordstown facility was bought by a startup called Lordstown Motors in 2019 to produce electric pickup trucks. The startup made only a handful of trucks before declaring bankruptcy in 2023.

Read the article here.

Funds

Yaletown Partners held the first 100 million Canadian dollar close of its Innovation Growth Fund III, which has a target of C$250 million. The new fund will invest in digital infrastructure technologies such as advanced analytics, edge computing, networking and physical AI.

People

Israeli early-stage investor Glilot Capital Partners appointed Amit Spitzer as chief technical officer and chief information security officer. He was previously at Cato Networks.

Software delivery provider Buildkite appointed Kevin Gounden as chief executive officer. He previously served as chief product officer at Lightcast and Randstad.

Agentic AI security startup Noma Security appointed Diana Kelley as chief information security officer. She most recently served as the CISO at Protect AI.

Blue J, a generative AI tax research platform with offices in New York and Toronto, scored $122 million in Series D funding led by Oak HC/FT and Sapphire Ventures.

Grasshopper, a New York-based digital bank, closed a $46.6 million funding round led by Patriot Financial Partners.

Pantomath, a Cincinnati-headquartered automated data operations platform, secured $30 million in Series B financing. General Catalyst led the round, which included participation from Sierra Ventures, Bowery Capital, Hitachi Ventures and others. Quentin Clark, a managing director at General Catalyst, will join Pantomath’s board.

Stable, a blockchain startup, completed a $28 million seed round from investors including Hack VC.

Jeh Aerospace, an Atlanta-headquartered aerospace manufacturing startup, landed $11 million in Series A funding. Elevation Capital led the investment, which included contributions from General Catalyst.

Journey, a New York-based loyalty platform for independent hotels, luxury resorts and private rentals, was seeded with a $7.7 million investment co-led by Lerer Hippeau and Slow Ventures.

• The fate of a little-known company behind Goldman’s Apple card is in limbo
   
• Amphenol strikes big broadband deal in AI boom
   
• For a few CEOs, pay keeps growing—by the billions

• Cognition offers buyouts to newly acquired Windsurf staff (The Information)
   
• What VCs really want: The five pillars for building a successful AI startup (CTech)
   
• How top VCs are really investing in AI applications (SaaStr)

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

The Team: Matthew Strozier, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

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