|
|
|
|
|
|
|
|
|
|
Venture Deals Take Hit From SVB Turmoil
|
|
By Yuliya Chernova, WSJ Pro
|
|
|
|
|
|
|
Good day. Preliminary data point to a continued stall in venture deals, with the collapse of Silicon Valley Bank exacerbating the slowdown.
Just 108 funding rounds were completed by companies on the Carta capitalization table platform so far in March, down 83% from the year-ago figures, according to Carta Inc., which provides software used by companies for equity issuance and cap table management.
There is typically a lag in the data, and Peter Walker, who runs Carta’s research team, said he expects more rounds to be added for the first quarter. But the steep drop from last year’s numbers is still concerning, he wrote in an email reporting the figures. The year already got off to a slow start with 274 deals in January and 258 in February on Carta’s platform, which tracks about 30,000 startups, each month down more than 50% year over year. The steeper drop in March points to the impact of SVB’s downfall, Carta said.
Anecdotally, some venture investors say they notice a different mood.
“Investors are ghosting our founders or not returning phone calls,” said Wesley Chan, co-founder and managing partner at FPV Ventures, which raised a $450 million fund last year. “SVB was the crystallization of people’s fear. Things we didn’t think would happen, happened,” he said.
The panic that swept through the venture market when SVB began buckling and then collapsed certainly paused some deals.
Still, some say that the deal pace hasn’t abated.
“We are closing three deals literally as I speak to you. It had no impact,” Jon Keidan, founder of Torch Capital, said on Thursday.
And now on to the news...
|
|
|
|
|
|
|
|
|
|
PHOTO ILLUSTRATION BY BREANNA DENNEY/THE WALL STREET JOURNAL, ALAMY (3), ASSOCIATED PRESS (2), BLOOMBERG (2), GETTY IMAGES (10)
|
|
|
|
|
|
Small banks are losing to big banks. The collapse of a pair of lenders in rapid succession is testing Americans’ faith in the regional and community banks that supply credit to a big chunk of the nation’s entrepreneurs and businesses, The Wall Street Journal reports. Bankers across the country fielded panicky calls and texts after Silicon Valley Bank and Signature Bank collapsed earlier this month. Their social-media feeds were jammed with stories of people moving their money—or at least talking about doing so. Deposits flooded into megabanks, whose failure the U.S. government would almost certainly prevent.
-
The 25 biggest U.S. banks gained $120 billion in deposits in the days after SVB collapsed, according to Federal Reserve data. All the U.S. banks below that level lost $108 billion over the same period. It was the largest weekly decline in smaller banks’ deposits in dollar terms on record.
|
|
|
|
|
26%
|
|
The decline in the average Wall Street bonus last year, the biggest percentage drop since the financial crisis, as a slump in deal making cut into bankers’ compensation.
|
|
|
|
|
Technology Slump Refocuses Startups on Capital Discipline
|
|
|
Slumping valuations for technology companies are making managers at emerging-markets startups direct their attention to capital discipline after years of booming investments and rising valuations that shunted aside cash concerns, according to venture-capital fund managers from areas such as Africa, Asia and Latin America, WSJ reports. “In the last five years, the environment that basically has trained or educated [startup founders] on the ground was not the right environment,” said Kuo-Yi Lim, a co-founder and managing partner at Southeast Asia-focused Monk’s Hill Ventures. Mr. Lim and other emerging-markets fund managers spoke during a Global Private Capital Association conference in New York this
week.
|
|
Binance Offered Perks to ‘Flash Boys,’ Regulator’s Lawsuit Says
|
|
|
A regulator’s lawsuit against crypto exchange Binance Holdings Ltd. has shed light on the secretive role of high-frequency traders in crypto and how Binance sought to curry favor with such big-ticket customers, WSJ reports. The Commodity Futures Trading Commission’s lawsuit, filed Monday, shows that Binance ran a “VIP” program for big trading firms that gave them various perks including slightly faster access to the exchange’s core systems than other customers enjoyed. The CFTC also said the exchange knowingly allowed U.S.-based trading firms to access its international derivatives market, Binance.com, despite publicly declaring that market off-limits to U.S. customers. The firms used offshore entities
and other methods to circumvent the ban, the CFTC said.
-
Binance has called the CFTC’s lawsuit “disappointing” and said it took extensive measures to become compliant with U.S. and global regulators.
More:
Sam Bankman-Fried Pleads Not Guilty to Latest Federal Charges
U.S., South Korea Vie Over Extradition of Crypto Fugitive Do Kwon
|
|
|
|
|
|
|
|
|
Funds
Consumer technology-focused investor Torch Capital closed on just over $200 million in new capital, bringing the New York-based firm’s total assets under management to more than $400 million.
Early-stage investor Gutter Capital, which focuses on affordability, economic mobility and climate change, closed its debut fund at $25 million.
People
Verusen, which helps manufacturers streamline their supply and materials management, appointed Scott Matthews to the post of chief executive. He succeeds Paul Noble, who will become chief strategy officer. Mr. Matthews was previously CEO at MRP and CrowdTwist.
Precision oncology-focused Flare Therapeutics Inc. appointed Michael L. Meyers as chief medical officer. The company also promoted Daphne Karydas to president and chief financial officer, and Michaela Bowden to chief development officer. Mr. Meyers was previously at Syndax Pharmaceuticals. Before joining Flare in 2021, Ms. Karydas also worked at Syndax Pharmaceuticals. Ms. Bowden joined Flare in 2021, and was previously at Bristol Myers Squibb. Last week, Cambridge, Mass.-based Flare Therapeutics said it raised a $123 million Series B round co-led by GordonMD Global Investments and Pfizer Ventures.
Deals
Sproutt acquired fellow life insurance provider The Reder Agency for an undisclosed amount.
|
|
|
|
|
|
|
Agreena, a Copenhagen-based regenerative agriculture startup offering a soil carbon platform and financial services to farmers, secured €46 million in Series B financing led by HV Capital.
P97 Networks, a Houston-based mobile commerce and digital marketing platform provider to the convenience retail, auto and fuel markets, landed a $40 million growth round led by Portage Capital Solutions.
Spiral, a New York-based platform that helps banks, credit unions and financial institutions embed sustainability and social impact into their core businesses, scored a $28 million Series A investment led by Team8.
Effy, a France-based home energy renovation services provider, closed a €20 million investment led by Felix Capital. The company helps with solar panel and heat pump installation, stove electrification, window replacement and building insulation projects.
Smalls, a fresh cat food brand, picked up a $19 million funding round from investors including Left Lane Capital.
Irrigreen, a San Francisco- and Edina, Minn.-based provider of robotic irrigation systems, raised $15 million in seed financing led by Ulu Ventures. The company says its smart sprinkler system for homeowners uses approximately 50% less water compared to conventional technology.
Kiro, a France-based digital medicine startup, snagged €13.8 million in Series A funding. Sofinnova Partners led the investment, with Partner Edward Kliphuis joining the company’s board.
deepc, a provider of artificial intelligence diagnostic tools to radiology teams, raised a €12 million Series A round. Sofinnova Partners led the funding, with Partner Simon Turner joining the board.
Reeco, a marketplace that connects hospitality buyers and suppliers, was seeded with a $10 million investment led by Net Capital Ventures and Joule Ventures. The company was founded in Tel Aviv in 2020.
Spera, an Israeli cybersecurity startup, was seeded with $10 million in funding led by YL Ventures.
|
|
|
|
|
Editor’s Note: Each week, we will share selections from WSJ Pro that provide insight and analysis we hope is useful to you. The stories are unlocked for The Wall Street Journal’s subscribers.
|
|
|
|
Every cyberbug has a backstory, and Walmart is turning to actuaries, insurance experts, accountants and lawyers to help gauge security threats.
McDonald’s is examining the pros and cons of reusable packaging in its restaurants worldwide as the fast-food chain looks to address European laws and serve its fare in more durable containers.
Retailers including American Eagle Outfitters and Nordstrom are using chips to track inventory on the sales floor, gaining insights into customer habits and helping them use stores for online fulfillment.
The salaries offered to U.S. accountants and auditors last year climbed at their quickest pace in recent years, but it may not be enough to remedy a national shortage of accountants.
Binance’s first chief compliance officer, Samuel Lim, is facing civil charges as part of CFTC’s suit against the crypto exchange. What could this mean for other CCOs?
|
|
|
|
|
|
|
|
PHOTO: JOSH EDELSON/AGENCE FRANCE-PRESSE/GETTY IMAGES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
