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Next Generation of Media Startups Evolve; Sofinnova Raises €333 Million; Canva Valued at $3.2 Billion
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Good day. Media startups are in the spotlight after several recent venture-backed media company acquisitions. But for startups in the sector, just generating clicks and making money from advertisements doesn't work anymore. Much more from WSJ Pro's Katie Roof below.
Plus, European medical investor Sofinnova Partners has raised its latest fund as health-care investing on the continent surges.
And Canva has raised funding at a $3.2 billion valuation, courtesy of Mary Meeker's venture firm Bond.
And now on to the news...
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Guests attend 29Rooms in Dallas, a traveling pop-up museum exhibit that Refinery29 hosts across several cities. PHOTO: RICHARD RODRIGUEZ/GETTY IMAGES FOR REFINERY29
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Media deals. As media companies—especially those backed by venture capital—consolidate, investors say they will back startups that adapt to changing market dynamics, achieve greater scale and diversify revenue streams without being too dependent on click-based ads, WSJ Pro’s Katie Roof reports.
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Several content acquisitions involving venture-backed companies have been announced in recent weeks, including Group Nine Media Inc.’s acquisition of PopSugar Inc. for north of $300 million, Refinery29 Inc.’s purchase by Vice Media LLC for about $400 million, and Vox Media Inc.’s acquisition of New York magazine parent New York Media for about $105 million.
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Still, some other disappointments in the sector have made investors skittish. Funding for general media and content startups fell to about $300 million last year, following four consecutive years of roughly $800 million or more, according to Dow Jones VentureSource.
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“What we’ve all learned has been that you need to have really massive scale to rely on advertising as your sole business model,” said Jeremy Liew, a partner at Lightspeed Venture Partners. Companies also need to have additional revenue streams beyond click-based ads, such as events or e-commerce.
European health fund. Paris-based medical investor Sofinnova Partners has closed its latest early-stage fund at €333 million ($368.4 million), continuing a streak of new funds being raised by Europe’s top health-care venture-capital firms, WSJ Pro’s Brian Gormley reports.
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Investment in European health-care companies has risen as large venture investors have been deploying new funds, and this year is in line to be one of the strongest ever for European venture funding in the medical field.
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Health-care startups there rounded up $4.98 billion in the first three quarters of this year, nearly as much as the $5.16 billion raised in all of 2018, according to Dow Jones VentureSource. The record is $7.17 billion in 2009.
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American investors also are coming to Europe searching for better valuations than the ones they see in the U.S., where health-care venture investment is exploding, Sofinnova Chairman and Managing Partner Antoine Papiernik said. As a result, European startups now have more funding options, he said.
PowerPoint competitor. Design software startup Canva Pty. Ltd. has raised new funding at a valuation of $3.2 billion, a 28% increase over its value a few months ago, WSJ Pro’s Yuliya Chernova reports. Mary Meeker’s Bond led the $85 million investment in Sydney-based Canva, which pitches its presentations product as a competitor to Microsoft Corp.’s PowerPoint. Bond participated in Canva’s prior round in May, when the company raised $70 million.
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Investigation. Britain’s antitrust watchdog has launched a formal probe into Amazon.com Inc.’s investment into Deliveroo, a British food-delivery startup, marking the official start of a relatively novel review that regulators signaled earlier this month, the Journal reports.
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Cyber deal. Cybersecurity startup Corelight Inc. has raised $50 million to help expand its client base and invest more heavily in research and development, WSJ Pro’s Marc Vartabedian reports. The San Francisco-based company offers open-source threat-detection technology to secure computer networks and enable customers to write and install custom applications. Corelight’s technology can detect subtle malicious behavior on computer networks and offer insights on threats, according to Teddie Wardi of Insight Partners, which led the company’s latest funding round.
Cloud deal. Pensando Systems, a networking startup launched by Cisco Systems Inc.’s famed “MPLS” team, has raised a $145 million Series C round led by Hewlett Packard Enterprise Co. and Lightspeed Venture Partners, and has named long-time Cisco chief John Chambers chairman. The San Jose, Calif., company, which has been operating in stealth mode, also unveiled its flagship software-defined edge services platform that it said will compete with the Nitro system from Amazon.com Inc.’s Amazon Web Services cloud unit.
AI for call centers. Invoca Inc., a provider of call-analytics software powered by artificial intelligence, has raised $41 million in new equity financing and secured a $15 million line of credit, Jared Council reports for WSJ Pro Artificial Intelligence. The software company’s eponymous platform uses AI to analyze call-center conversations and determine the outcome of the call, such as a scheduled appointment or sale.
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Thrive Global, a behavior change media and technology company founded by Arianna Huffington, acquired neuroscience-based artificial intelligence startup Boundless Mind for an undisclosed amount. In connection with the acquisition, Thrive grabbed a new round of funding led by JAZZ Venture Partners, a firm that previously backed Boundless, bringing the total raised by the company to over $65 million. New York-based Thrive is backed by Lerer Hippeau Ventures, Greycroft Partners, Blue Pool Capital, Advancit Capital, Canvas Ventures, Female Founders Fund and others. Revolution’s Rise of the Rest Seed Fund also previously invested in Boundless Mind.
View the Space Inc., a leasing and asset management platform for the commercial real-estate industry, agreed to acquire PropertyCapsule, a provider of marketing automation and prospecting software to retail landlords, for an undisclosed sum. New York-based VTS is backed by investors including Blackstone Group Inc., Insight Venture Partners, OpenView Venture Partners and Trinity Ventures. PropertyCapsule was also backed by Trinity.
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Facebook executive David Marcus testified about libra in Congress in July. ANDREW HARRER/BLOOMBERG NEWS
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Facebook wanted to create a new currency. It wasn’t ready for the backlash. Major partners bolted after lawmakers and regulators challenged the social-media giant’s foray into finance.
Sheryl Sandberg faults ‘broken rung’ on corporate ladder over work inequities. Facebook’s COO and other executives say leadership gaps for women, people of color won’t narrow unless companies focus on first promotions.
How one tweet turned pro-China trolls against the NBA. After his tweet supporting Hong Kong’s protesters, the Houston Rockets’ general manager was the subject of a pro-China campaign.
The American consumer needs some help. Softening retail sales strengthen the case for rate cuts.
America’s got talent, just not enough in IT. Companies sweeten perks to land tech workers; a $250,000 signing bonus for an executive role.
TikTok to review content-moderation policy after censorship accusation. The video-sharing platform hired a law firm to address topics including child safety, hate speech and misinformation.
Pinterest shares slide as lockup expires. Its stock price has fallen nearly 5% this week.
WeWork founder mixed spiritual group with business. Former CEO Adam Neumann’s relationship with the Kabbalah Centre helped build WeWork from its early days.
U.S. patent chief doubtful about AI as inventor. At least one patent official doesn’t believe AI is capable of inventing.
Huawei extends hot streak in the face of U.S. blacklisting. Chinese technology giant’s revenue and smartphone shipments soar.
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Pendo Inc., a Raleigh, N.C.-based customer analytics company, secured $100 million in Series E funding, giving the company a $1 billion valuation. Sapphire Ventures led the round, which included participation from new investors General Atlantic and Tiger Global Management, along with previous backers Battery Ventures, Meritech Capital, FirstMark Capital, Geodesic Capital and Cross Creek.
Galileo Financial Technologies, a Salt Lake City-based payments technology startup, collected $77 million in Series A financing. Accel led the round, with Partner John Locke joining the company’s board.
Healx, a U.K.-based startup using artificial intelligence to develop treatments for rare diseases, raised $56 million in Series B funding led by Atomico. New investors Intel Capital, Global Brain and btov Partners also participated, in addition to existing backers including Balderton Capital and Amadeus Capital Partners.
Sisu Data, a San Francisco-based diagnostic analytics platform for structured data, raised $52.5 million in Series B funding. New Enterprise Associates led the round, which included participation from Andreessen Horowitz and Green Bay Ventures. Pete Sonsini of NEA will join the company’s board.
dMed Biopharmaceutical, a Shanghai-based clinical contract research organization, closed a $50 million Series B round. Vivo Capital led the investment, with participation from Legend Capital, Qiming Venture Partners and Lilly Asia Ventures.
CrossLend GmbH, a platform that securitizes loans of all sizes and markets them to investors, completed a €35 million ($38.8 million) Series B funding round. Santander InnoVentures led the investment, which included participation from Earlybird, ABN Amro Ventures and Lakestar. The company has offices in Berlin, Luxembourg and London.
Flashpoint, a New York-based business risk intelligence provider, picked up a $34 million investment, consisting of $6 million in equity and $28 million in debt. Previous investors including Georgian Partners, Greycroft, TechOperators, Jump Capital, Cisco Systems and Bloomberg Beta provided the equity portion. Debt came from Bank of Montreal’s Technology and Innovation Banking Group.
Lively Inc., a San Francisco-based health savings account platform for employers and individuals, landed $27 million in Series B financing. Costanoa Ventures led the round, with contributions from Ally Ventures, Liquid 2 Ventures, PJC, Teamworthy Ventures, Streamlined Ventures and Y Combinator.
Science Exchange Inc., a Palo Alto, Calif.-based marketplace for outsourced research and development services, nabbed $20 million in equity and debt funding. Maverick Ventures and Norwest Venture Partners led the round, which included participation from Union Square Ventures, Collaborative Fund, Windham Ventures, OATV and Silicon Valley Bank.
Realtime Robotics Inc., a Boston-based startup providing responsive motion planning for industrial robots and autonomous vehicles, raised an $11.7 million Series A round. Sparx Asset Management led the funding, and was joined by Omron Ventures, Toyota AI Ventures, Scrum Ventures, Duke Angel Network, Mitsubishi Electric Corp. and Hyundai Motor Co.
Amarna Therapeutics, a Dutch developer of gene and immune therapies, snagged a €10 million ($11.1 million) investment led by Flerie Invest.
Adroit Worldwide Media Inc., an Aliso Viejo, Calif.-based autonomous shopping technology startup, closed an $11 million Series A round. Impact Venture Capital led the investment, which included participation from Mark IV Capital and The Contrarian Group. Jack Crawford, general partner at Impact, joined the company's board.
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Sense Photonics named Gabe Sibley, founder and chief executive of Verdant Robotics, to its board. The Durham, N.C.-based company provides Lidar and 3-D sensor technology for autonomous vehicles, industrial equipment and other applications. Sense counts Illinois Ventures, IPD Capital, Congruent Ventures, Prelude Ventures, Idea Fund Partners and Purple Arch Ventures among its investors.
Roofstock Inc., an online marketplace for single-family rental home investing, named Ketan Babaria as chief product officer. He was formerly head of product for LifeLock and Capital One’s D3 incubation unit. Oakland, Calif.-based Roofstock is backed by investors including Canvas Ventures, Lightspeed Venture Partners, Bain Capital Ventures, Khosla Ventures, Nyca Partners, QED Investors and FJ Labs.
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We cover venture capital and the global startup ecosystem. WSJ Pro Venture Capital is a premium service of The Wall Street Journal. Share your tips, comments and questions: vcnews@wsj.com
The Team: Tomio Geron, Yuliya Chernova, Brian Gormley, Heather Mack, Katie Roof and Marc Vartabedian.
Follow us on Twitter: @wsjvc, @tomiogeron, @ychernova, @BrianPGormley, @1heathermack, @katie_roof, @marcvarta.
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LEAVE THIS BOX EMPTY
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