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What Potential Are Investors Seeing Abroad?
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By Marc Vartabedian, WSJ Pro
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Good day. For this week’s question, we would like to hear how investors are gauging venture markets outside the U.S. Venture activity has increased in Europe and opportunities are popping up in Saudi Arabia. What potential are investors seeing abroad? Email responses to vcnews@wsj.com.
Last week, we asked what, if any, differences venture capitalists are seeing between President Biden and presumptive Democratic presidential nominee Kamala Harris when it comes to tech regulation affecting the venture industry. This response has been edited for length and clarity.
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Steve Brotman, founder and managing partner of Alpha Partners: “It is unclear what her tech and venture policy intentions are. Areas that have hurt tech and venture capital are Biden/Harris proposals to increase taxes on venture funds and investors as well as increase the corporate tax rate. Most harmful is the high level of SEC and FTC scrutiny on M&A of small companies by Big Tech, which lessens incentives to invest and dries up liquidity in the system. Harris will likely support Biden’s cautious and regulatory approach to cryptocurrencies. On the tech-helpful side, Harris might be open to more skilled labor and entrepreneurial immigration. However, historically, Republicans and Democrats have not been able to settle the entire immigration matter, hence Democrats have felt that partial reform to address this issue would jeopardize a compromise on the entire
immigration matter.”
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And now on to the news...
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Wayve, a U.K.-based developer of autonomous driving software, raised $1 billion from investors in May. Photo: Wayve
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European VC. Venture capitalists’ appetite for energy and artificial-intelligence investments is putting Europe’s venture sector on a hot streak, WSJ Pro reports.
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European governments’ focus on energy security amid heightened geopolitical tensions has helped spur a capital rush, investors and analysts say. That coupled with the emergence of Europe-based AI startups, which can be less expensive than their U.S. counterparts, is also drawing investors.
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European startups raised $15.5 billion in the second quarter, up 14% from the first quarter and up 12% from the same quarter of last year, according to Europe-based analytics firm Dealroom.co. Meanwhile, the amount invested into North American startups rose 9.6% in the second quarter from the prior quarter while Asia deal value rose 6.4% over the same period.
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Energy was the most funded sector in Europe in the first half of the year, netting $5.7 billion, while funding raised by AI startups accounted for a record 18% of venture funding in Europe, up from about 11% in 2021, Dealroom.co said. Before last year, energy startups typically raised less capital than fintech, health and enterprise software startups.
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$2.2 Billion
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The number of exits in Europe in the second quarter, which is a third fewer than in the same quarter a year ago.
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Microsoft Adds OpenAI to Its List of Competitors in AI and Search
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Microsoft named OpenAI among its significant rivals, acknowledging that its most important partner in artificial intelligence is also increasingly competing for some of the same business, The Wall Street Journal reports. The software giant, which has invested more than $13 billion in OpenAI, added the startup to its list of competitors in its fiscal 2024 report filed this week—the first time Microsoft has designated its partner that way in the annual filing. The maker of ChatGPT joined a short list of AI rivals named in the document, including Amazon.com and Google. The relationship has been crucial for both companies, boosting Microsoft and its
Chief Executive Satya Nadella in the race to build sophisticated AI systems while giving OpenAI financial backing to make costly investments required to create those systems.
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Quinbrook Banks $3 Billion for Renewable-Power Deals
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Quinbrook Infrastructure Partners raised $3 billion for its latest and largest-to-date renewable energy-focused investment pool, with backers from Nordic countries compensating for a lower appetite shown by U.S. investors, WSJ Pro Private Equity reports. The private-equity firm wrapped up its Net Zero Power Fund with roughly $2 billion in commitments and $1 billion for co-investment vehicles, said David Scaysbrook, a Quinbrook managing partner and co-founder. Investors from Denmark, Finland, Norway and Sweden accounted for roughly a third of the capital raised, while capital raised in the U.S. and Canada represented 12%, less than what the firm had expected, according to Scaysbrook.
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People
Bessemer Venture Partners promoted Anurag Begwani to vice president. He joined the firm’s India team in 2022.
SightBit, an Israeli developer of a drowning prevention system using computer vision and AI, appointed Etan Hadaya to the post of chief executive.
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Outpace Bio, a Seattle-based cell therapy startup focusing on the treatment of solid tumors, landed $144 in Series B funding. RA Capital Management led the round, and Partner Jake Simson was appointed to the Outpace board.
Contextual AI, a Mountain View, Calif.-based startup using artificial intelligence to automate complex tasks for knowledge workers, scored $80 million in Series A funding. Greycroft led the round, with Partner Marcie Vu joining the company’s board.
Airna, a Cambridge, Mass.-based startup developing RNA editing therapeutics, added $60 million in Series A funding led by Forbion, bringing the round total to $90 million. Josh Brumm, general partner at Forbion, joined the board.
Protect AI, a Seattle-based artificial-intelligence and machine learning security provider, closed a $60 million Series B round led by Evolution Equity Partners.
Healx, a U.K.-based generative AI-enabled biotech company focusing on treatments for rare diseases, collected $47 million in Series C funding co-led by R42 Group and Atomico. R42 Group’s Ronjon Nag joined the board.
Spear Bio, a Woburn, Mass.-based precision diagnostics startup, closed a $45 million Series A round from Foresite Capital and others. Vikram Bajaj, managing director of Foresite, joined the company’s board.
Ema, a San Francisco-based provider of AI agents capable of performing complex tasks in the workplace, added $36 million in Series A funding, bringing the round total to $50 million. Accel and S32 led the latest tranche.
Foresight Diagnostics, a Boulder, Colo.-based cancer diagnostics startup, picked up $33 million in new Series B funding from investors including Foresite Capital, Civilization Ventures and Bluebird Ventures.
Perchwell, a New York-based data and workflow platform for residential real estate, raised $25 million in Series B funding. Lux Capital led the investment, with Managing Partner Peter Hébert joining the board.
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Intel CEO Pat Gelsinger wants to reduce the company’s costs by more than $10 billion next year. Photo: Annabelle Chih/Bloomberg News
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Intel to cut jobs, suspend dividend in cost-saving push
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Apple’s iPhone sales slide, but investors still expect AI rally
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Amazon shares slide as spending surges and revenue outlook disappoints
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Meta’s ad strength gives its AI spending some cover
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India's $45 billion startup implosion puts tech future in doubt (Bloomberg)
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Mark Cuban, Reid Hoffman, Vinod Khosla sign 'VCsforKamala' pledge started by Seattle investor Leslie Feinzaig. (GeekWire)
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