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SVB Effects Ripple Through Tech Ecosystem; Tiger’s Venture Funds Take Hit
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By Marc Vartabedian, WSJ Pro
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Good day. As venture-capitalists and startup founders grapple with the fallout of Silicon Valley Bank’s collapse, woes are intensifying for other banks, including First Republic Bank, which does business with many startups and venture firms. In non-SVB related news, the sagging tech market has led hedge fund and venture firm Tiger Global to mark down the value of its investments in private companies across its venture-capital funds last year.
Here are some the big stories in the venture ecosystem:
And now on to the news...
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PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Bank to ease deposit rules, some customers say. Startups and investors say the newly created entity that took over from Silicon Valley Bank is offering some flexibility when it comes to deposit requirements for borrowers, WSJ Pro’s Yuliya Chernova and Angus Loten report. Silicon Valley Bridge Bank NA in individual instances is easing a provision that startups must keep all of their capital with the bank as part of their loan agreements, borrowers and investors say. The bank is also moving to forgo penalties for borrowers who moved money out of the bank in recent days, in technical violation of their borrowing covenants.
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“The bank is being super flexible and changing their policy on the percentage of deposits that one needs to have at the bank in order to get a loan. This is a great move by the bank, as everyone would now benefit from diversifying their capital across a number of banks,” said Matt Murphy, partner at Menlo Ventures.
More coverage:
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617 Million
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The number of protein structures that the research arm of Facebook parent Meta Platforms Inc. predicted using artificial intelligence. The predicted proteins are in a public database.
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Tiger Global Writes Down Venture Funds’ Bets by 33% in 2022
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Tiger Global marked down the value of its investments in private companies by about 33% across its venture-capital funds in 2022, according to people familiar with the firm, The Wall Street Journal reports. The markdowns erased $23 billion in value from Tiger’s giant holdings of startups around the globe, one of the people said. Its private portfolio includes big bets on hundreds of companies including TikTok parent ByteDance and payments company Stripe. In the fourth quarter, Tiger’s newest venture funds lost between 9% and 25%. While substantial, the markdowns—including $9 billion in the second half of the year—highlight the lag in private markets compared with similar
fast-growing public companies. Tech stocks fell sharply last year, yet large venture-capital investors have so far reported more modest declines.
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Microsoft Adds the Tech Behind ChatGPT to Its Business Software
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Microsoft Corp. is infusing its popular workplace software with the technology behind the viral chatbot ChatGPT, upgrading PowerPoint, Word, Excel and Outlook with new abilities in its latest move to try to stay ahead in the artificial-intelligence race, WSJ reports. The software giant has gone all-in on generative AI, following its multibillion-dollar investment in ChatGPT’s creator OpenAI. In February, Microsoft rolled out a new version of its search engine Bing that used generative AI to give direct answers to questions and had a sophisticated chat tool. It announced Thursday that it is bringing the technology to its Microsoft 365 suite of software to enable users to
create presentations, write documents and summarize emails—all from natural-language prompts.
More: Five Things Marketers Should Know About Generative AI in Advertising
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Funds
Amboy Street Ventures closed its debut fund at $20 million to make seed and Series A investments in women’s health and sexual health startups. The Los Angeles-based firm’s portfolio includes telehealth abortion services provider Hey Jane, male birth control startup Contraline and vaginal microbiome testing and care startup Evvy.
People
Satellite technology company BeetleSat named Patricio Northland as chief executive. Prior to joining BeetleSat, he held CEO roles at Eutelsat Americas, Satelites Mexicanos and AT&T Latin America.
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Mediar Therapeutics Inc., a Cambridge, Mass.-based fibrosis treatment startup, scored $85 million in Series A funding co-led by Novartis Venture Fund and Sofinnova Partners. Novartis Venture Fund’s Nandita Shangari and Sofinnova’s Maina Bhaman joined the company’s board.
Fairmatic, a commercial auto insurance provider, landed $46 million in Series B funding led by Battery Ventures.
Parker, a New York-based startup offering a charge card for e-commerce companies, secured $31.1 million in Series A financing led by Valar Ventures.
Solarcycle, an Oakland, Calif.-based recycling startup focused on producing sustainable materials for the solar industry, raised $30 million in Series A funding from investors including Fifth Wall.
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Corrections & Amplifications: Hedonova, a Los Angeles-based hedge fund, said it hasn’t made an investment in a company called Carbonomy. The WSJ Pro Venture Capital newsletter on March 14 incorrectly reported that a startup called Carbonomy raised $16 million from Hedonova in Series A funding.
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Weekly highlights from across WSJ Pro that we hope will be useful to you. Here are this week's stories, unlocked for WSJ subscribers.
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Google’s Glass project was troubled from the start.
PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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