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Construct Capital Raises $300 Million to Back Industrial-Tech
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By Marc Vartabedian, WSJ Pro
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Good day. Venture firm Construct Capital is doubling down on its strategy of backing early-stage startups developing industrial-related technology, the latest example of revived investor interest in the sector.
Washington, D.C.-based Construct has closed its third fund, a $300 million vehicle to invest in seed and Series A tech startups that aim to reshape manufacturing, logistics, critical infrastructure, transportation, defense and energy, among other industries. Construct raised a $225 million second fund and a $75 million vehicle for later-stage deals in 2022.
Similar venture strategies have emerged globally in recent years from investors who view these sectors as ripe for a tech overhaul. Political pressure on U.S. companies to manufacture on home soil has spurred investors to back technologies to help ease that transition. Meanwhile, geopolitical instability has propelled global investment into defense tech.
Venture investors poured $80.7 billion into global “deep-tech” startups last year, a third more than the prior year and a 225% surge from 2019, according to data provider PitchBook Data. Deep-tech broadly refers to startups developing innovations in science and engineering fields.
Read the full story here.
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And now on to the news...
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CoreWeave CEO Michael Intrator commemorated the start of trade Friday. PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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IPO blues. It was supposed to be one of the splashiest IPOs of the year. But CoreWeave’s stock-market debut turned into a high-profile stumble for both the AI industry and new public listings, The Wall Street Journal reports.
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The startup that rents out access to Nvidia chips priced its initial public offering below expectations and ended its first day of trading flat on Friday, a sign of flagging investor enthusiasm for artificial-intelligence companies as well as the chilly state of the U.S. market for new listings.
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The showing was a sharp contrast from just last year. Investor mania for all things AI drove up shares of Nvidia, making the chip maker the world’s most valuable publicly traded company for the first time (a title it has since ceded). CoreWeave raised money in May at a $19 billion valuation, nearly triple its price just five months prior. Its backers include OpenAI and Fidelity.
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$113 Billion
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Combined valuation after Elon Musk merged his AI company with X.
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OpenAI’s Latest Funding Round Comes With a $20 Billion Catch
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OpenAI is finalizing a $40 billion funding round in what would be one of the largest startup financings of all time. The catch: The ChatGPT maker could lose out on half that amount if it fails to meet a key condition, WSJ reports. In order to receive the full sum, OpenAI has to successfully restructure into an independent for-profit company by the end of the year, according to people familiar with the situation. If it doesn’t, its lead investor—SoftBank—can pare back the funding round’s size to $20 billion.
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Larry Fink Says Regular Americans Need Private Assets Too
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Larry Fink wants more Americans investing in private markets alongside stocks and bonds, WSJ reports. The billionaire BlackRock chief executive says he wants individuals to have better access to the menu of private and less-liquid investments that have long been core holdings of pensions, endowments and other institutions. Making it easier to own a slice of private loans, real estate or infrastructure such as ports or data centers is one of several ways investing could be further democratized, helping address a growing retirement-savings crisis, Fink says.
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AI Agents Are a Moment of Truth for Tech
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All emerging technology needs to deliver on its promise, sooner or later. For AI agents, that time is now. The successful deployment of agents—artificial intelligence that can take actions and make decisions on behalf of people or even themselves—is vital to the future of model developers such as OpenAI, enterprise software companies like ServiceNow and Salesforce, consumer giants such as Apple, plus AI infrastructure companies including Nvidia, cloud service providers and data center operators. That’s not even to mention all the public and private investment capital riding on those companies’ results.
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People
Base10 Partners appointed Paulina Kang as principal, where she will focus on Series B investments. Kang was previously a principal within KKR’s Technology Growth team.
Fintech-focused QED Investors said Frank Rotman will transition to a partner emeritus role at the end of the year. Rotman and Nigel Morris co-founded the firm in 2007.
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Supira Medical, a Los Gatos, Calif.-based developer of a pump that supports heart functioning in patients with cardiovascular diseases, completed a $120 million Series E round from investors including Novo Holdings.
Brisk Teaching, a San Francisco-based AI teaching and learning agent for K-12 schools, closed a $15 million Series A round led by Bessemer Venture Partners.
XGS Energy, a Houston-based developer of geothermal power projects leveraging a proprietary water-independent technology, picked up a $13 million investment from Aligned Climate Capital, ClearSky, WovenEarth Ventures and others.
Certiverse, a Chicago-based certification platform for exam development and delivery, raised $11 million in Series A funding led by Cherryrock Capital.
Playback, a San Francisco-based live sports streaming platform, has raised $22 million in funding, including an $11 million Series A round led by Seven Seven Six.
Sourcetable, a San Francisco-based developer of a spreadsheet that uses AI to automate common analytical workflows, closed a $4.3 million seed round led by Bee Partners.
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Over dinner in L.A.’s Arts District in November 2023, billionaire Peter Thiel had a warning for OpenAI Chief Sam Altman. ILLUSTRATION: JAN FEINDT
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