Good day. The multibillion-dollar collapse of cryptocurrency exchange FTX is likely to affect the development of digital currencies for years to come. We asked venture investors—both in and out of the crypto market—what lessons can be learned from FTX and its undoing. Here are excerpts of their replies: 

“Probably, we see a move away from centralized custodial businesses like FTX and towards Web3-native projects, in DeFi and other areas, that minimize the need for trust in a central authority. My hope is that from the ashes of FTX arises a more resilient, inclusive, private and secure industry. VCs can be part of that solution."

—Alex Tapscott, managing director at Ninepoint Partners LP, a Toronto-based alternative-investment-management firm, and co-author of “Blockchain Revolution”

“The irony of the FTX bankruptcy is that it further proves why decentralized financial products should be the rule, not the exception. FTX and Alameda were centralized entities that obfuscated the books, one of the core problems crypto-native platforms solve.”

—Soona Amhaz, founder and managing partner of Volt Capital, a crypto-focused venture firm based in San Francisco

“When the smoke clears, I have no doubt that there is real innovation and market opportunity in crypto-based fintech, even if it doesn't look exactly like the hype of 2021. More regulation and standards will help level the playing field and protect investors, but in the meantime, it's probably a good thing if more of the capital available to crypto founders comes from expert investors who know what they're looking at.”

—Jocelyn Goldfein, managing director at Zetta Venture Partners, a San Francisco-based firm that invests in artificial-intelligence startups

And now on to the news...

Biotech, large backers split. Sensei Biotherapeutics shareholders Apeiron Investment Group and Presight Capital are urging its board of directors to liquidate the company and return their cash, following a sharp decline in share prices since the Boston-based startup’s initial public offering last year, WSJ Pro's Brian Gormley reports. 

• Sensei Bio went public in February 2021 promising a drug for head-and-neck cancer that was in clinical trials, a project it has since discontinued.
   
• In a letter to its board, Apeiron and Presight said a subsequent drop in Sensei’s valuation shows the company lacks shareholder support for its new drug programs.
   
• In an emailed statement, Sensei said it believes it is in the best interest of all stockholders for the company to continue allocating capital to support achievement of critical near-term milestones.

Nearly three-quarters of $420 million raised in October last year by FTX from an array of big-name investors went to FTX founder Sam Bankman-Fried, who sold some of his personal stake in the company, according to FTX financial records reviewed by The Wall Street Journal and people familiar with the transaction. 

• The cashout was large by startup-world standards, where such sales historically were taboo because they allow founders to reap profits before investors.
   
• Mr. Bankman-Fried told investors at the time it was a partial reimbursement of money he spent to buy out rival Binance’s stake in FTX a few months earlier, according to some of the people familiar with the transaction.

More:

• Inside Sam Bankman-Fried’s Doomed FTX Empire
• How Caroline Ellison Landed at the Center of the FTX Collapse
• Crypto Bank Silvergate Battles FTX Contagion Fears
• FTX Crypto Customers Worry They Will Never See Their Money Again

Elizabeth Holmes, the founder of Theranos Inc. who was convicted of defrauding investors, was sentenced to more than 11 years in prison, capping the extraordinary downfall of a onetime Silicon Valley wunderkind who promised to revolutionize blood testing, WSJ reports. U.S. District Judge Edward Davila, who oversaw the trial in which Ms. Holmes was found guilty of running a yearslong fraud scheme at her blood-testing company, delivered the sentence Friday in federal court. A jury convicted Ms. Holmes in January on four charges that she misrepresented the startup’s technology, finances and business prospects to investors. Judge Davila ordered Ms. Holmes to serve 135 months, or 11.25 years, and to surrender on April 27, 2023. The sentence length falls in the midrange of those received by the dozen white-collar criminals with similar offenses cited by the government in its sentencing memorandum.

Ride-hailing, e-commerce and financial-services company GoTo Group is laying off 12% of its employees, or 1,300 people, as it seeks to cut costs and chart a course through a difficult period for global technology companies, its chief executive told staffers, WSJ reports.

Funds

MassMutual Ventures launched a new $100 million fund to make investments in the climate technology sector across the U.S. The Boston-, London- and Singapore-based firm will back 15 to 20 startups through the fund.

Fintech investor Fiat Ventures raised $25 million for its inaugural fund. Limited partners include Invesco Private Capital, Joint Effects LLC, Full Spectrum Capital, Temerity Capital Partners, Now Investments, Mountaineer Capital and Permit Ventures.

People

Healthcare-focused Longitude Capital appointed Matthew Young as managing director of its biotech practice. He was previously chief operating officer and chief financial officer at Grail.

Partner Tomasz Tunguz is leaving Redpoint Ventures after 14 years at the firm.

Cambly, a video chat app that connects English learners to native English tutors, named Morgan Hughes as chief financial officer. She was previously at Airbnb and Grubhub. Cambly has raised $60 million from investors including Benchmark and Bessemer Venture Partners.

Exits

Publicly traded cybersecurity company Palo Alto Networks agreed to acquire Cider Security, a startup focused on application security and software supply-chain security, for about $195 million in cash, excluding the value of replacement equity awards. Palo Alto Networks said the purchase will support its Prisma Cloud product, a code-to-cloud security platform. In March, Tel Aviv-based Cider said it raised a $38 million funding round from investors including Tiger Global Management and Glilot Capital Partners.

Parallel Domain, a Palo Alto, Calif.-based startup whose technology enables artificial-intelligence developers to generate synthetic data for training and testing perception models, secured $30 million in Series B funding. March Capital led the round, which saw participation from Costanoa Ventures, Foundry Group, Calibrate Ventures and Ubiquity Ventures. March Capital’s Julia Klein will join the company’s board.

Speak, an English learning app, fetched a $27 million Series B round. OpenAI Startup Fund led the investment, which included participation from Founders Fund, Lachy Groom and others.

Soft Robotics Inc., a Bedford, Mass.-based robotic picking startup, collected $26 million in Series C financing led by Tyson Ventures.

GoFreight Corp., a Santa Monica, Calif.-based freight forwarding platform, raised $23 million in Series A funding. Co-led by Flex Capital and Headline, the round included additional support from LFX Venture Partners, Palm Drive Capital, Mucker Capital, Cornerstone Ventures and Red Building Capital.

Buildkite, an Australian software developer tools provider, closed a $21 million Series B round. Co-lead investors OneVentures and AirTree Ventures were joined by General Catalyst in the funding.

Gravitics Inc., a Seattle-based startup that designs and manufactures large space structures, was seeded with a $20 million investment. Type One Ventures led the round, which included contributions from Tim Draper from Draper Associates, FJ Labs, the Venture Collective, Helios Capital, Gaingels, Mana Ventures and others. Tarek Waked of Type One Ventures joined the board.

EngFlow, a software development startup, nabbed $18 million in Series A funding from Tiger Global Management, Andreessen Horowitz, Firstminute Capital and others.

MadKudu, a Mountain View, Calif.-based no-code data platform for business-to-business marketers, grabbed $18 million in Series A funding. Led by Felicis Ventures, the round included support from Benhamou Global Ventures, Alven, Techstars and others.

Daylight, a New York-based digital banking platform serving the LGBTQ community, picked up a $15 million investment. Anthemis Group led the round, with Managing Director Vinay Singh joining the board. CMFG Ventures, Kapor Capital, Citi Ventures, Gaingels and others also participated in the round.

OneSchema, another software developer tools startup, landed a $6.3 million investment. General Catalyst led the round, which included contributions from Sequoia Capital, Y Combinator, Elad Gil, Contrary Capital, Box Group, Comma Capital and Xoogler Ventures.

• TikTok is still hiring as competitors shed jobs
   
• Amazon looks to ‘Sparrow’ to carry its robotics ambitions
   
• Elon Musk reinstates Donald Trump’s Twitter account after online poll
   
• The myth of the tech god is crumbling
   
• FCC publishes map showing broadband coverage gaps
   
• China’s Xi stacks government with science and tech experts

This newsletter was compiled by Angus Loten 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, Yuliya Chernova, Brian Gormley, Angus Loten, Eric Sylvers and Marc Vartabedian.

Follow us on Twitter: @wsjvc