Good day.  The disruption to the food and beverage landscape caused by the pandemic hit many bricks-and-mortar stores harder than online operations—and investors are taking notice. For example, Trade, an online subscription service for coffee, not only weathered the worst of the downturn but saw considerable growth.  

The startup, which just raised $9 million in its first official venture round, works with local roasters to deliver specialty coffee to consumers’ homes. The capital will be used to leverage rising consumer demand and reach a growing subscriber base.

Gimme! Coffee, a roaster partner for Trade, was forced to close its New York City cafes, largely resulting in a 55% to 60% loss in the company’s total revenue, said Colleen Anunu, the company’s CEO. Its online sales through Trade helped the roaster stabilize. “We sold more through Trade in the month of May than we had combined in the past two years of partnership,” Ms. Anunu added. “That’s been consistent for the last couple of months as well.”

With the help of consumer spending shifting to online platforms, Trade shipped its one millionth bag of coffee just two years after shipping its first.

And now on to the news...

Creative outlet. Membership platform Patreon Inc., which enables musicians and other creators to connect with fans, has raised $90 million from investors, bringing its value to more than $1.2 billion, Maria Armental reports. Patreon was last valued at $660 million after a funding round last year, according to PitchBook Data Inc.

• New Enterprise Associates and Wellington Management Co. led the latest investment round, and NEA will gain an observer seat on the company’s board. Patreon executives say the pandemic is driving a membership surge, with creators looking for a stable source of income and a creative outlet and fans seeking entertainment.
   
• Jack Conte and Sam Yam, one-time Stanford University roommates, founded Patreon in 2013 to build a company that would allow writers, musicians and other creators to get paid by their fans, who in turn get exclusive access to content and a behind-the-scenes look into their creative journey. The San Francisco-based company has grown to more than 200,000 creators supported by more than 6 million fans, the company said.

Direct listings on hold. The New York Stock Exchange’s plan to let companies raise capital through direct listings is on pause after an influential group of institutional investors took an unusual regulatory step in a last-ditch effort to block it. 

• In a direct listing, a company floats its shares on a stock exchange, but without hiring banks to underwrite the transaction. Music-streaming company Spotify used the process to go public in 2018, followed by Slack Technologies last year.
   
• The NYSE’s plan, that the SEC’s staff approved last week, opened the door for a new type of direct-listing process in which companies can issue new shares and sell them to public investors in a single large transaction on the first day of trading, much like the first trade in an IPO.
   
• The new plan would effectively create a cheaper alternative to the IPO in which companies could go public without paying underwriting fees to investment banks.

The latest funding comes not long after the firm helped back the company in a roughly $92 million Series B financing round in 2019 and brings total capital raised to more than $400 million. Neon raised a $22 million Series A in 2018. Neon offers digital banking and other financial services across Brazil, particularly to customers that typically find it harder to access traditional banking services. 

The risk of permanent layoffs and business bankruptcies will rise the longer uncertainty related to the coronavirus pandemic remains high, said Fed governor Lael Brainard in a speech Tuesday.

Funds

Edtech investor Owl Ventures closed $415 million for its fourth fund and $170 million for its first Opportunity Fund. The firm’s limited partners include college and university endowments, foundations, strategic education institutions, sovereign wealth funds and family offices. Owl Ventures has offices in San Francisco and Menlo Park, Calif., and invests across the U.S., China, Europe and India.

Exits

Gong, a seller of subscriptions to software that enable businesses to gain insights on sales transactions, purchased Vayo, a startup specializing in data analytics for sales teams. Terms weren’t disclosed. Last month, San Francisco-based Gong scored $200 million in new funding, bringing the company’s valuation to $2.2 billion. Index Ventures, Salesforce Ventures, Thrive Capital, Battery Ventures, Norwest Venture Partners and Sequoia Capital were among the Series D investors. Israel-based Vayo was backed by F2 Venture Capital.

Cloud business communications provider Dialpad Inc. acquired video conferencing company Highfive for an undisclosed sum. San Francisco-based Dialpad raised $50 million in Series D funding in 2018 from Iconiq Capital, Andreessen Horowitz, Amasia, Scale Ventures, Section 32 and Work-Bench. Highfive was also backed by Andreessen Horowitz, along with Lightspeed Venture Partners and General Catalyst.

RealPage Inc., a publicly traded provider of software and data analytics to the real estate industry, acquired Stratis IoT, developer of an app that connects smart apartment systems and devices, for an undisclosed sum. Stratis counted Tech Council Ventures as an investor.

Sarcos Robotics, a Salt Lake City-based maker of industrial robotic systems that augment human performance, scored $40 million in Series C funding. Rotor Capital led the round, with Partner Brian Finn joining the company’s board. Cecilia Prieto, a division vice president at Schlumberger, also joined the board.

Fashionphile, a luxury handbag, watch and fine jewelry resale platform founded in 1999, raised $38.5 million in Series B funding led by NewSpring Growth.

InCountry, a San Francisco-based provider of data compliance services for multinational companies, added $18 million in funding led by Caffeinated Capital and Mubadala Capital. New investor Accenture Ventures also joined in the round, along with existing backers Arbor Ventures, Felicis Ventures, Ridge Ventures, Bloomberg Beta and Team Builder Ventures.

InfoSum Ltd., a U.K.-based decentralized marketing infrastructure startup, completed a $15.1 million Series A round. Upfront Ventures and IA Ventures led the investment, with participation from Ascential, Akamai, Experian, ITV and AT&T’s Xandr.

Cosmose AI, a provider of consumer behavior data to retailers, closed a $15 million Series A round, valuing the company at more than $100 million. Tiga Investments, OTB Ventures and TDJ Pitango led the investment.

Cloud Agronomics Inc., a Boulder, Colo.-based agricultural intelligence provider, was seeded with a $6 million investment led by SineWave Ventures.

Boundless Immigration, a Seattle-based startup that helps families navigate the immigration system, raised $7.5 million in Series A1 financing led by Foundry Group, and acquired peer company RapidVisa. Additional participants in the round included Two Sigma Ventures, Trilogy Equity Partners, Pioneer Square Labs and Forefront Venture Partners. Terms of the acquisition weren’t disclosed.

Acerta Analytics, a Canadian automotive intelligence provider, landed $7 million in Series A financing. Omers Ventures led the round, which included contributions from M12, StandUp Ventures, Radical Ventures, EDC and Techstars.

Reachdesk, a New York-based direct mail and corporate gifting software platform for business-to-business companies, nabbed $6 million in Series A funding led by Five Elms Capital.

Honey Mama's, a Portland, Ore.-based maker of honey-cocoa bars, fetched a $4.5 million Series A round led by Amberstone Ventures.

Cuddly Inc., a Seal Beach, Calif.-based fundraising platform dedicated to helping animal welfare organizations, closed a $4 million Series A round. Lead Edge Capital led the funding, with Vice President Zach Ullman joining the board.

Steno, a Los Angeles-based court reporting services provider, collected a $3.5 million seed round led by First Round Capital.

• From ‘Call of Duty: Black Ops Cold War’ to ‘Fortnite,’ here’s how videogame pricing works
   
• Foldable phones have flopped, but Samsung hopes its new model will flip the script
   
• AT&T explores potential sale of Xandr digital ad unit
   
• Facebook says it will bar news sharing in Australia if proposed payment rules become law

• Rocket Lab gains key FAA launch license. (TechCrunch)
   
• Despite flurry of activity, software IPOs to fall short of 2019 numbers. (The Information)
   
• Gogo sells commercial in-flight internet business. (The Verge)

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.

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