Good day. Some venture investors were hoping the recession would cool valuations. But it appears there is a dynamic that makes some businesses even more in demand.

“Competition for deals gets hotter than ever between venture funds,” Tusk Venture Partners wrote in its newsletter last week. There are fewer companies doing well now than there were pre-recession, but with the venture market still full of capital they are seeing even greater demand than before, said Bradley Tusk, co-founder and managing partner of Tusk Venture Partners.

“People are being paid to deploy money, not to hoard it,” Mr. Tusk said. Whether it’s telemedicine, software for remote work, or mobile entertainment, those sectors are getting extra attention now, he said.

The result is a greater bifurcation in the market, said Franklin Isacson, founding partner at Coefficient Capital. “There are a number of companies that are having a hard time raising and are taking lower valuations than they had anticipated. Companies that have continued to show strong growth are achieving valuations that are similar as what they would have been pre-Covid,” Mr. Isacson said.

And now on to the news...

Leftover funds. When the Trump administration first launched its $670 billion pandemic relief program for small businesses, a mad dash to secure forgivable loans had many business owners worried there wouldn't be enough money to go around, The Wall Street Journal’s Yuka Hayashi reports. But the application window for Paycheck Protection Program loans closes Tuesday with about $134 billion in funds available as of Monday evening. That's triggered a new debate over what to do with the remaining funds, as fears mount that the economic fallout from the Covid-19 crisis is far from over.

The startup, which has raised $4 million from Uncork Capital, Khosla Ventures, Social Impact Capital, Y Combinator and others, has created algorithms for quantum computers to map potential new proteins for drugs. Such biologics, or drugs made from organic material rather than synthetic chemicals, are growing in use and are expected to be more than 25% of the drug market this year, according to Deloitte, since, among other things, they can address molecular processes that traditional drugs can’t.

Delivery deal. Uber Technologies Inc. is in discussions to buy Postmates Inc. for about $2.6 billion, according to people familiar with the matter, the latest in a rapid-fire series of moves to consolidate the food-delivery industry. Postmates, which has held discussions with other possible buyers since at least last year, has been simultaneously planning an initial public offering. 

Consumer genetics. Sun Genomics Inc. has secured about $8.7 million toward a Series A financing that the company is using to grow a consumer-genetics business and to expand into developing medical tests, WSJ Pro's Brian Gormley reports. Sun analyzes the DNA of microbes found in the gut and creates customized probiotics designed to help improve gut health. With this funding, the San Diego company also plans to develop medical tests for digestive health and autoimmune conditions.

Exits

Fitness apparel maker Lululemon Athletica Inc. agreed to purchase Mirror, an at-home fitness startup that sells a tech-enabled mirror, for $500 million. In October 2019, New York-based Mirror raised a $34 million round of funding that included Lululemon taking a minority ownership stake. Other investors in the round included Point72 Ventures, Spark Capital and Lerer Hippeau.

Empower Retirement said it is buying the personal-wealth management company Personal Capital Corp. for as much as $1 billion, in a move to expand Empower's financial-planning tools to individuals. Denver-based Empower, a subsidiary of Great-West Lifeco Inc., said it would pay $825 million to acquire the company, with up to $175 million more over the next two years subject to achieving certain milestones. Great-West Lifeco's sister company IGM Financial Inc. owns a 24.8% stake in Personal Capital, having invested $144.8 million in the startup since 2016. The Redwood City, Calif.-based company is also backed by Corsair Capital, Crosslink Capital, Institutional Venture Partners and Venrock.

Settlement

Telegram Group Inc. will return $1.2 billion to investors and pay an $18.5 million civil penalty under a settlement with the Securities and Exchange Commission. The company raised $1.7 billion in a crypto token offering in 2018. But the SEC sued Telegram and prevented it from distributing the tokens. The SEC said the company violated securities laws by failing to register the offering. Telegram neither admitted nor denied the SEC’s allegations. Venture firms that invested in Telegram’s token offering include Lightspeed Venture Partners, Sequoia Capital, Kleiner Perkins and Benchmark Capital.

Funds

Scotts Miracle-Gro Co. launched 1868 Ventures, a venture fund named for the year the lawn- and garden-products company was founded. The $50 million fund will invest in controlled-environment agriculture technologies, plant genetics, natural and organic alternatives for fertilizers and controls, and sustainable products and packaging, according to a press release. 1868 Ventures will make initial investments of between $250,000 to $2.5 million per deal, with follow-on investments as needed, in North American startups. Touchdown Ventures, which helps large companies start and manage venture firms, will assist in running the fund.

People

Cloud storage provider Qumulo Inc. appointed Adriana Gil Miner as chief marketing officer. She was most recently senior vice president of brand, communications and events at Tableau Software. Seattle-based Qumulo is backed by investors including BlackRock, Highland Capital Partners, Kleiner Perkins, Madrona Venture Group, Valhalla Partners and Goldman Sachs.

Fivetran Inc., an Oakland, Calif.-based provider of automated data integration technology, raised $100 million in Series C funding, bringing the company’s valuation to $1.2 billion. Andreessen Horowitz and General Catalyst led the round, which included participation from CEAS Investments and Matrix Partners. Trevor Oelschig, managing director at General Catalyst Growth, will join the company’s board.

Artlist, an Israeli provider of royalty-free licensed music, stock video clips and sound effects for digital creative industries, secured $48 million in funding. KKR & Co. led the investment, with participation from Elephant Partners.

Mynd Property Management, an Oakland, Calif.-based rental property management startup, completed a $41.5 million Series C round. Wells Fargo led the funding, with support from Canaan Partners, Lightspeed Venture Partners and Jackson Square Ventures.

Alice, a Brazilian health-tech startup, launched with $16 million in funding from investors including Canary, Kaszek Ventures and MAYA Capital.

Airvet Inc., a Los Angeles-based veterinary telemedicine and telehealth platform, closed a $14 million Series A round. Canvas Ventures led the investment, which included contributions from e.ventures, Burst Capital, Starting Line, TrueSight Ventures, Hawke Ventures, Bracket Capital and others.

DigniFi, a Kirkland, Wash.-based financing platform for auto repairs and services, collected $14 million in funding from BuildGroup and Exor Seeds. In addition to the Series A round, DigniFi signed an agreement with Neuberger Berman to purchase $275 million in loans.

Prisma, a Berlin- and San Francisco-based provider of database tools for application development, snagged $12 million in Series A funding led by Amplify Partners.

Thoughtexchange, a Canadian crowdsourcing intelligence platform, added $10 million in new funding. Information Venture Partners led the round, with participation from Yaletown Partners and Voyager Capital.

Emissary, a New York-based sales intelligence network, scored a $6.3 million investment. The round was led by G20 Ventures, and was joined by PBJ Capital, Converge and Castor Ventures.

CompanyCam, a Lincoln, Neb.-based documentation and communication app for contractors, picked up $6 million in Series A funding led by Blueprint Equity.

Cady Bag Co., a Pearson, Ga.-based maker of polypropylene fabrics and bags, grabbed a $5 million investment from Advantage Capital.

Zeller, an Australian business banking startup, was seeded with a 6.3 million Australian dollar ($4.3 million) investment. Square Peg led the round, with Partner Paul Bassat joining the board. Apex Capital also participated in the funding.

• India blocks dozens of Chinese apps, including TikTok, following border clash
   
• Facebook sees growing ad boycott in protest against handling of speech 
   
• Shift plans to go public this year as Covid-19 boosts online car sales
   
• Amazon to pay $500 million in bonuses for front-line workers
   
• How app makers break their apps to avoid paying Apple

• Tech’s hidden diversity problem: executive headhunters (The Information)
   
• The New York Times pulls out of Apple News (NYT)
   
• NASA’s new moon-bound space suits will get a boost from AI (Wired)

This newsletter was compiled by 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, Tomio Geron, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

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