Good day. Venture capitalists are known for embracing disruption in industries that are slow to change. One venture firm is applying that playbook to how it invests.

In the spring, San Francisco-based Touring Capital began using a new artificial-intelligence investment algorithm—informally dubbed “R2-D2” by a Star Wars-loving partner. One Sunday in May, R2-D2 spit out its first batch of 20 companies for the firm’s partners to review.

R2-D2, among other functions, automatically scans the vast startup market for companies in Touring’s wheelhouse: AI startups on the verge of raising Series B financing. The tool ranks companies based on capital raised, cap-table investors and other metrics.

R2-D2 had an early win: The program surfaced a company Touring invested in recently, the first of its 12 investments to be flagged via AI since the firm launched two years ago. It also expanded market coverage, allowing the then five-person firm to hire one additional associate instead of the planned two, Touring general partners Nagraj Kashyap and Priya Saiprasad said.

Getting to this point hasn’t been easy. Here are the barriers Touring faced and the lessons the partners learned along the way, based on interviews with Kashyap and Saiprasad.

Read the full story here

And now on to the news...

Harnessing legacy companies’ proprietary data to improve AI model development. The co-founder and chief executive of Mistral AI, Europe’s top artificial-intelligence startup, sees business data playing a critical role in improving AI model development now that most publicly available training data has been exhausted. The Paris-based AI lab’s generative AI models compete with those from companies such as OpenAI and Anthropic. Now fresh from doubling its valuation to $14 billion, thanks in part to a $1.5 billion investment from Dutch chip-equipment giant ASML, the startup is pushing to improve its models by looking inside legacy enterprises that hold some of the world’s last untapped data reserves.

Prediction-market startup Kalshi made its name by giving political junkies a way to bet on last year’s presidential election. Now, it’s making a play for football fans. The firm has emerged as a competitor to much larger sports-betting platforms such as DraftKings and FanDuel. Bettors can trade contracts on the outcomes of football, basketball and other games through Kalshi’s app as well as Robinhood Markets, the brokerage that popularized bets on meme stocks.

Private-equity firm Monterro has raised two new funds to invest in high-growth business-to-business software companies in the Nordic region. The Stockholm-based firm raised €1.375 billion, or about $1.61 billion, for its fifth main investment fund, and €350 million, or about $409 million, for its second lower-midmarket fund. Despite the increasingly challenging private-equity fundraising environment, Monterro saw strong demand from existing investors and also added 26 new institutional limited partners, said Lars Sveder, the firm’s co-founder and chief investment officer. 

Funds

National security-focused growth equity investor Razor’s Edge closed its fourth fund at $560 million, surpassing the firm’s original $400 million target.

People

Early-stage investor Antler appointed Christopher Walsh as a partner in San Francisco. He was previously a partner at 7 Global Capital.

Battery Ventures said Marcus Ryu was named general partner. Prior to joining the firm in 2022, he co-founded and was chief executive officer of Guidewire Software.

Valence, a New York-based provider of an AI coach for employees, raised $50 million in Series B funding. Bessemer Venture Partners led the round, with Partner Sameer Dholakia joining the company’s board.

Axon Therapies, a New York-based startup developing minimally invasive therapies addressing heart failure, closed a $32 million Series A round co-led by Earlybird Venture Capital and Santé Ventures.

Flox, a platform enabling unified software lifecycles, secured $25 million in Series B financing led by Addition.

Emergent, a San Francisco-based agentic vibe-coding platform for small businesses, grabbed $23 million in Series A funding led by Lightspeed Venture Partners.

Daymark Health, a Philadelphia-based cancer-care startup, scored $20 million in Series A funding from investors including Healthier Capital and Blue Venture Fund. Healthier Capital's Aman Mahajan and Blue Venture Fund's Kelsey Maguire will join the board.

Synthesized, a startup helping enterprises to automate their software testing with agentic AI, raised $20 million in Series A funding. Redalpine led the round, which included contributions from Mercia Ventures and Seedcamp. The company is co-headquartered in London and New York.

Circuit & Chisel, an agentic AI payments startup, was seeded with a $19.2 million investment led by Primary and ParaFi Capital.

Gain, a Tel Aviv-based provider of intelligent AI employees, emerged from stealth with $12 million in seed funding. The Garage led the investment, which included participation from BlueRed Partners.

Anode, a San Francisco-based provider of on-demand power from mobile microgrids, was seeded with a $9 million investment led by Eclipse.

Maximor, a New York-based finance automation platform for businesses, landed $9 million in seed funding. Foundation Capital led the round, which included participation from Gaia Ventures and Boldcap Ventures.

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This newsletter was compiled by Marc Vartabedian, Matthew Strozier 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.