Good day. When the pandemic hit, startups leaned on venture debt to extend cash runways and shore up balance sheets. By the end of the first quarter, the debt utilization rate of Silicon Valley Bank clients reached 59%, according to the bank’s 4th quarter State of the Market report.

The rate—which measures how much credit SVB clients are using compared with how much they have available—fell to 54% in the second quarter and 49% in the third quarter, which is just below pre-pandemic levels.

While much of this can be attributed to a more stable business environment than at the start of the pandemic, there is still some degree of uncertainty factoring in, said David Spreng, founder, chief executive and chief information officer of Runway Growth Capital.

“You use debt when you’re confident in your financial projections,” said Mr. Spreng, whose firm is a Woodside, Calif.-based venture debt provider for growth-stage companies.

Mr. Spreng said most of Runway’s growth in venture debt opportunities this year has come in the life sciences and healthcare sectors. Companies engaged in the Covid-19 vaccine effort and businesses boosted by the pandemic such as telemedicine have sought loans, Mr. Spreng said.

And now on to the news...

Fitness startup Strava Inc. has seen a surge in membership as more consumers look to get outdoors and exercise during the coronavirus pandemic, Pro's Tomio Geron reports.

The maker of the social networking app for fitness buffs has raised $110 million in a late-stage funding round co-led by Sequoia Capital and TCV that valued the company at more than $1.5 billion, according to people familiar with the matter.

Dragoneer Investment Group, along with existing investors Madrone Capital Partners, Jackson Square Ventures and Go4it Capital, also participated in the Series F round.

DoorDash Inc. unveiled paperwork for its initial public offering on Friday, showing the food-delivery service has grown at a blistering pace during the pandemic and turned a surprising quarterly profit in June before falling back to a loss in September, WSJ reports. The company’s revenue for the September quarter more than tripled from the same period a year earlier. Like many startups that give priority to growth, DoorDash still mostly loses money, and it hasn’t posted a full-year profit since its inception in 2013.

Startups in buzzy sectors such as cannabis, electric vehicles, online gambling and space travel are going public using a structure that offers outsize potential rewards to backers while bypassing some safeguards of a traditional initial public offering, WSJ reports. Special-purpose acquisition companies, or SPACs, are publicly traded shell companies formed to pursue deals. After such a firm merges with a target company, that company gets the SPAC’s spot on a stock exchange, enabling it to sell shares to the public—including to mom-and-pop investors who have rushed into the market during the Covid-19 bounceback rally. SPACs—also called blank-check companies—have announced 71 deals with target companies this year, making 2020 the busiest year so far for the process, according to data provider SPACInsider. In at least 15 of those deals, the targets had no revenue last year, filings show.

People

Secure data ecosystem investor C5 Capital said Rob Meyerson was appointed to the firm as its newest operating partner, and joins its new Impact Partners Fund. He was previously president of Blue Origin, and was founder and chief executive of Delalune Space.

Qiming Venture Partners USA promoted Anna French and Colin Walsh to partners from principals. Prior to joining Qiming US, Ms. French was a management consultant at the Boston Consulting Group. Mr. Walsh was a vice president on the life science investment team at ND Capital.

Cerebelly, a brain-focused children's nutrition brand, appointed Greg Shearson as chief executive. He was previously CEO of Ancient Nutrition. Cerebelly’s backers include H Ventures Partners and Imaginary Ventures.

Exits

Palo Alto Networks agreed to acquire fellow cybersecurity provider Expanse Inc. Under the terms of the deal, Palo Alto will pay roughly $670 million in cash and stock, along with $130 million in replacement equity awards. In April 2019, San Francisco-based Expanse secured a $70 million Series C round from TPG Growth, Peter Thiel, New Enterprise Associates, IVP and Founders Fund.

Zoom Telephonics Inc. agreed to purchase Minim Inc., which secures and manages connected devices in homes, in a stock transaction valuing the company at $30 million. Manchester, N.H.-based Minim has raised funding from investors including Flybridge Capital Partners and Founder Collective.

KAR Global acquired BacklotCars Inc., an online used-car marketplace for car dealers, for an undisclosed amount. In April 2019, BacklotCars raised a $25 million Series B round from Stripes, Origin Ventures, Pritzker Group Venture Capital and Revolution’s Rise of the Rest Seed Fund.

Heroes, a U.K.-based startup that acquires and scales Amazon businesses, scored a $65 million seed round including equity and debt. Fuel Ventures and 360 Capital Partners led the investment, with participation from Upper90.

Metagenomi, an Emeryville, Calif.-based gene editing startup, completed a $65 million Series A round. Leaps by Bayer and Humboldt Fund led the investment, which included participation from Sozo Ventures, Agent Capital, InCube Ventures and HOF Capital.

Kira Pharmaceuticals, a startup developing therapies to treat immune-mediated diseases, launched with $46 million in funding raised to date from investors including Quan Capital, 6 Dimensions Capital, Qiming Venture Partners and Sinopharm Capital. The company also appointed Frederick Beddingfield to chief executive. He was most recently CEO of Sienna Biopharmaceuticals. Kira has offices in China and Cambridge, Mass.

GuideCX, a Draper, Utah-based client onboarding project platform, closed a $10 million Series A round led by Sorenson Ventures. New investors Epic Ventures and Orchard Ventures also participated, along with existing backers Album VC and Prelude.

Griffin, a London-based banking-as-a-service provider, raised a £6.5 million ($8.6 million) round. EQT Ventures led the investment, with participation from Seedcamp, Tribe Capital and others.

Spruce, an Austin, Texas-based provider of lifestyle services to the multifamily industry, secured $8 million in Series A financing. Mercury Fund led the round and was joined by Sweat Equity Partners. Steven Pho and Andrew White, president of Sweat Equity, were added to the company’s board.

Ride Vision, an Israeli provider of collision-aversion technology for motorcycles, landed $7 million in Series A funding. OurCrowd led the round, which included support from YL Ventures, Mobilion VC and Metagal.

Nana Technologies Inc., a San Francisco-based online vocational school and appliance repair marketplace, was seeded with a $6 million investment. Spero Ventures led the round, which included contributions from Next Play Ventures, Burst Capital, Learn Capital and Lachy Groom.

FinPay Holdings Inc., a King of Prussia, Pa.-based patient financial management startup, collected $5 million in Series C funding led by Montreux Growth Partners.

Zero Egg, maker of a plant-based egg alternative, raised a $5 million Series A round. Powerplant Ventures led the funding, which included support from Unovis Asset Management’s New Crop Capital and Strauss Group’s The Kitchen Hub. T.K. Pillan, co-founder and partner of Powerplant, will join the board.

• TikTok gains extension of divestiture deadline
   
• Schools struggling to stay open get hit by ransomware attacks
   
• Tiny GM Car Zips Past Tesla to Lead China’s Electric Vehicle Market
   
• Elon Musk’s Covid-19 Tests: Tesla CEO Says He Tests Both Positive and Negative

• Uber in talks to sell ATG self-driving unit to Aurora (TechCrunch)
   

• As SPACs evolve, so does their investor base (The Information)

• Dating app Bumble taps Goldman, Citigroup for IPO next year (Bloomberg)

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, Tomio Geron, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

Follow us on Twitter: @wsjvc, @tomiogeron, @ychernova, @BrianPGormley, @marcvarta.