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Question: What Has Come of Diversity Pledges in VC?
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By Marc Vartabedian, WSJ Pro
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Good day. Last week, we asked where startup investors spot the most opportunity amid the current sky-high real-estate market.
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Kent Swig, president of real-estate development and investment firm Swig Equities, said new technologies are impacting building renovation and construction as a result of the expectations tenants have for the way those buildings need to operate on a daily basis. “Aspects such as building security, parking and receiving packages delivered to your building now rely on cutting-edge technologies from tech startups," Mr. Swig said.
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Oliver Libby, founding partner at venture firm Hatzimemos Libby Holdings, which goes by H/L Ventures, said shifting geographic concentrations and return-to-office models will give rise to new businesses. Adjacent businesses that target energy efficiency or help make homes more affordable, valuable, comfortable and sustainable, stand to benefit, Mr. Libby said.
This week’s question: Have there been concrete changes when it comes to diversity in the venture and startup sector after the pledges were made last year?
Please email responses to marc.vartabedian@wsj.com.
And now on to the news...
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Ledger claims that about 15% of all crypto assets globally are secured by its systems.
PHOTO: LEDGER
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Well-timed raise. Ledger, a startup that sells hardware and software to keep cryptocurrency secure, has raised $380 million in a new financing that has pushed its valuation to more than $1.5 billion, WSJ Pro’s Yuliya Chernova reports. The boom in crypto asset prices that started last October and lasted into April was a good time to raise capital for blockchain startups, said Pascal Gauthier, chairman and chief executive officer of the Paris-based company.
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10T Holdings, a crypto-focused fund recently launched by investor Dan Tapiero, led Ledger’s Series C round, with participation from several prior backers, including Cathay Innovation, Draper Esprit and Digital Currency Group.
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Ledger closed on the new financing in early May, Mr. Gauthier said, right before the crypto market took a dive. The timing of Ledger’s B round in late 2017 was somewhat similar, Mr. Gauthier said, coming right before a long crypto winter set in.
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$425 Million+
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The amount a European Union privacy regulator has proposed to fine Amazon.com Inc., according to people familiar with the matter. (WSJ)
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American Airlines Invests in Electric Flying Taxis
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American Airlines Group Inc. is the latest carrier to get in on the flying taxi trend as airlines, aerospace manufacturers and technology companies vie to get the new aircraft off the ground, The Wall Street Journal reports. The airline plans to invest $25 million in Vertical Aerospace Group Ltd., a U.K.-based electric aircraft startup. The world’s largest carrier by traffic said it would buy as many as 250 of Vertical’s planned flying taxis as airlines and financiers look to back the nascent technology, with its partners in the venture taking potential orders to 1,000.
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Funding Round Boosts Klarna’s Valuation to $45.6 Billion
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Sweden’s Klarna Bank AB Thursday said it has received $639 million in a new funding round led by SoftBank Group Corp.’s Vision Fund 2. The round gives Klarna a post-money valuation of $45.6 billion, the company said, a more than eightfold increase in its valuation since 2019, when a $460 million funding round valued the company at around $5.5 billion. The buy-now-pay-later payments specialist said existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group also participated in the round, which will support the company’s international expansion and further capture global retail growth.
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First fund. Seven Seven Six, the venture firm launched last year by Alexis Ohanian, a co-founder of Reddit and Initialized Capital, raised $150 million for its first fund. The firm has already made 17 investments.
“This has definitely been the most exuberant year I’ve experienced in my last decade of investing,” Mr. Ohanian said. “I love the fact there’s so much competition...it will cull the weaker investors and firms; and founders will be better off because all of us investors will have to keep being better,” he said.
Seven Seven Six, whose team also includes Founding Partner Katelin Holloway and Founding Chief of Staff Lissie Garvin, is investing across stages. Women represented half of the limited partners in 776 Fund I LP, and Black and indigenous investors represented 15% of the group.
The new fund can invest a small percentage of its capital into crypto tokens directly. The firm has no plans to sponsor a special-purpose acquisition company, Mr. Ohanian said, something several other VCs are pursuing.
Mr. Ohanian left Initialized last year to have autonomy and a fresh slate. He also stepped down from the Reddit board then, urging the company to replace him with a Black director. “I was at a point last year, in the wake of George Floyd’s murder, that prompted me to reevaluate my legacy,” Mr. Ohanian said. —Yuliya Chernova
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Funds
European early-stage investor Balderton Capital is expanding into primary growth investing with a new $680 million fund. Sector-agnostic Balderton Growth I will invest between $25 million and $50 million in each company, with a target of about 15 European startups. Balderton’s Managing Partner Bernard Liautaud, General Partner David Thévenon and General Partner Rana Yared will lead the new fund.
People
The National Venture Capital Association appointed Michael Brown, general partner at Battery Ventures, as the 2021-22 chair of the board. Mr. Brown is preceded by Barry Eggers, founding partner at Lightspeed Venture Partners.
OCA Ventures said Dana Sun joined the firm as a senior associate and David Kokonas was promoted to senior associate. Ms. Sun returns to OCA Ventures, where she was an associate in 2019, with a focus on investments in digital health, diagnostics and medical devices. Mr. Kokonas joined the Chicago-based firm as an associate in 2019 and is focused on investments in core technologies and financial technologies.
Hyperfine Inc., maker of a portable compact magnetic resonance imaging device, named Dave Scott as president and chief executive. He was previously with Apple’s confidential Special Projects Group. In February, Hyperfine raised a $90 million Series D round from investors including GV, Nextrans and Axiom Associates.
Diamanti Inc., which streamlines Kubernetes applications and data management, named Chris Hickey as chief executive. He was previously chief executive at Quark Software. San Jose, Calif.-based Diamanti has raised funding from ClearSky, CRV, Threshold Ventures, Goldman Sachs Group Inc., GSR Ventures and Northgate Capital.
Exits
Parsons Corp. will expand its services and products addressing next-generation military, intelligence and space operations with the company’s agreement to acquire BlackHorse Solutions Inc. in an accretive deal valued at $203 million. Razor’s Edge Ventures and Ten Eleven Ventures include Herndon, Va.-based BlackHorse Solutions in their portfolios.
Toast Inc., a startup that provides payment processing hardware and cloud-based software for restaurants, acquired xtraCHEF, a provider of back office tools for restaurants, for an undisclosed amount. Last year, Boston-based Toast raised a $400 million Series F round co-led by Bessemer Venture Partners, TPG, Greenoaks Capital and Tiger Global Management. XtraCHEF’s backers included MVP Capital Partners, ValueStream Ventures and Laconia Capital Group.
Course Hero Inc., which offers course-specific study materials to college students, acquired LitCharts, which helps students to better understand literary texts, for an undisclosed sum. Course Hero’s website lists NewView Capital and SuRo Capital as investors.
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Solana Labs Inc. secured a $314 million investment to develop technology used in the fast-growing area of the cryptocurrency markets known as decentralized finance, or DeFi, according to the Journal. Andreessen Horowitz led the round, which included additional support from Polychain Capital, Multicoin Capital and Jump Trading. The transaction was structured as a purchase of Solana's SOL digital tokens rather than a traditional purchase of equity shares.
Faire, an online wholesale marketplace based in San Francisco and Canada, closed a $260 million Series F round led by Sequoia Capital. The new investment nearly triples the company’s valuation from just over six months ago, to $7 billion. New investors Baillie Gifford and Wellington Management also participated in the funding, along with all existing backers, which include Forerunner Ventures, Founders Fund, Khosla Ventures, Lightspeed Venture Partners, Y Combinator, DST Global, Dragoneer Investment Group, D1 Capital Partners and Norwest Venture Partners.
Eightfold AI Inc., a Santa Clara, Calif.-based startup using deep learning and artificial intelligence to help companies find, recruit and retain workers, scored $220 million in Series E financing, increasing the company’s valuation to over $2 billion. Lead investor SoftBank Vision Fund 2 was joined by General Catalyst, Capital One Ventures, Foundation Capital, IVP and Lightspeed Venture Partners in the round.
Amplitude Inc., a San Francisco-based digital products intelligence platform, landed $150 million in Series F funding, giving the company a pre-money valuation of $4 billion. Sequoia Capital led the round, which included participation from GIC, Battery Ventures and IVP.
Flyhomes Inc., a Seattle-based homebuying startup, secured $150 million in Series C funding. Co-lead investors Norwest Venture Partners and Battery Ventures were joined in the round by new investors including Balyasny Asset Management, Fifth Wall, Trustbridge Partners and Camber Creek, in addition to returning backers Andreessen Horowitz and Canvas Ventures. Lisa Wu of Norwest Venture Partners and Roger Lee of Battery Ventures will join the company’s board.
ComplySci, a New York- and London-based provider of regulatory technology and compliance solutions for the financial services sector, landed a growth capital investment of about $120 million from K1 Investment Management.
Synthekine Inc., a Menlo Park, Calif.-based cytokine therapeutics startup, completed a $107.5 million Series B round co-led by Deerfield Management and Janus Henderson Investors. Existing backers Column Group, Samsara BioCapital, Canaan Partners and Emerson Collective also participated in the funding, alongside new investors including RA Capital Management, Rock Springs Capital, Omega Funds, TCG Crossover and Lilly Asia Ventures.
Bright Peak Therapeutics, a Switzerland- and San Diego-based startup developing cytokine immunotherapies to treat cancer and autoimmune disease, raised $107 million in Series B funding led by RA Capital Management. New investors including Fidelity Management & Research Co., Invus, Qatar Investment Authority, funds and accounts managed by BlackRock Inc. and Alexandria Venture Investments also contributed to the round, along with previous backer Versant Ventures. Laura Shawver, chief executive of Silverback Therapeutics; Christine Siu, chief operating officer in-residence at BridgeBio Pharma Inc.; Josh Resnick, managing director at RA Capital; and Michael Rosenzweig will join the company’s board.
nesto Inc., a Canadian mortgage startup, fetched $76 million in Series B funding led by individual investors Michael Rowell and Michael Paulus. Additional participants in the round included Portage Ventures, Diagram Ventures and Breyer Capital.
Mythical Games, a Los Angeles-based gaming technology studio creating universal gaming ecosystems around playable NFTs, picked up a $75 million Series B investment. WestCap Group led the round, with additional participation from 01 Advisors, Gary Vaynerchuk’s VaynerFund, Galaxy Digital, Javelin Venture Partners, Alumni Ventures and Struck Capital.
Kepler Communications Inc., a Toronto-based startup working to develop a Low Earth Orbit satellite communication network, raised a $60 million Series B round. Tribe Capital led the investment, which saw contributions from IA Ventures, Costanoa Ventures and Canaan Partners.
Morning Consult, which provides data, news and analysis to help optimize leaders’ decision making, grabbed a $60 million Series B round at a valuation of just over $1 billion. Advance Venture Partners led the investment, which included participation from Susquehanna Growth Equity and Lupa Systems. Morning Consult has offices in New York, Washington, D.C., and San Francisco.
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In videoconferences, the picture may get in the way of effective communication.
PHOTO: CAVAN IMAGES/GETTY IMAGES
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