Good day. Last week we asked if venture investors are shifting their outlooks as hopes of a swift public-market rebound fade.

• Les Funtleyder, portfolio manager, healthcare, for E Squared Capital Management, a family office, said, “On the private investment side, we are asking for more concessions when we are investing—a valuation cut or an increase in rights. For venture capitalists who invested in peak valuation years, they’re going to see very low returns. Going forward, the return picture will look a lot better, the `23 and `24 vintages could look really good.”
   
• G Squared partner Spencer McLeod said the venture-capital firm doesn’t foresee a near-term turnaround in valuation multiples for tech startups and a subsequent thawing of the IPO market. “We think that companies that were able to raise at high multiples in 2021 may take several years to grow into those marks, a period during which they will likely have to come back to market and raise another round of financing. If that is the case, we think down rounds and/or potential reductions in force will become increasingly common.” Companies that can stay private longer will choose to do so if volatility persists, Mr. McLeod said.
   
• Maha Katabi, general partner of life sciences investor Sofinnova Investments, said the implications would include lower valuations for private biotech financing rounds; more pharma partnerships and M&A in private biotech as an alternative source of capital; the need for budgetary discipline and fully funding private companies to value- creating catalysts; and lower participation by crossover investors in venture rounds.

This week’s question: What emerging fintech could thrive even in a struggling economy with rising interest rates?

Please email responses to marc.vartabedian@wsj.com.

And now on to the news...

Startups and Ukraine war. The commercial hub of Delaware is blocking startup ventures with past ties to Russia from maintaining their corporate standing in the state, ensnaring some tech firms that say they have little or no current connection to Russia following its invasion of Ukraine, WSJ Pro reports.

• The Delaware Division of Corporations this year has told dozens of technology ventures incorporated in Delaware that they can’t do further business with the state after determining their corporate filings contained individuals or business addresses in Russia, according to lawyers and startup founders, as well as official correspondence reviewed by The Wall Street Journal.
   
• Startup ventures that spring from Russia’s technology sector regularly incorporate in Delaware to establish a presence in the U.S. and seek venture investment, drawn to the state’s reputation as a hospitable corporate environment.

Porsche AG shares lost much of their luster on their first day of trading in Frankfurt, showing the struggles that even an iconic luxury car faces from the gloomy economic outlook and volatility that have weighed on markets, The Wall Street Journal reports. After pricing its initial public offer late Wednesday at the top of the target range in Europe’s largest IPO for over a decade, Porsche ended flat. The muted trading performance suggests the company may have priced the issue too aggressively. Typically a company tries to price a new issue at a level that maximizes sale proceeds but also ensures a rise in the stock price on the first day of trading.

Many companies that have shifted enterprise-technology tools into the cloud in recent years, in part as a cost-saving measure, say those investments have yet to pay off, WSJ reports. Some are even seeing costs go up. Katrina Agusti, chief information officer at workwear maker Carhartt Inc., said the company was surprised by the high cost of data storage after it began moving to the cloud in 2018. Ms. Agusti said storage was cheaper when the Dearborn, Mich., company held data in its own data center. After it began migrating years’ worth of data into the cloud, she said, “what we realized quickly was we weren’t going to be able to contain those costs.”

Funds

Scale Venture Partners closed its eighth fund with $900 million in commitments. The oversubscribed vehicle will invest in cloud and SaaS software companies, with an emphasis on cognitive apps. The Foster City, Calif.-based firm closed on $600 million in 2020 and $400 million in 2018 for its seventh and sixth funds, respectively.

Healthcare-focused Town Hall Ventures closed its third fund with $350 million in commitments and appointed Meera Mani as partner. She was previously a senior partner at McKinsey & Co. Town Hall Ventures also made three hires to its investment team. Matt Tesarfreund joined as vice president, while Christine Gosioco and David Ohta joined as associates.

Designer Fund raised $40 million for its third fund to continue investing in early-stage companies that solve design gaps in industries including financial services, healthcare and business software. The San Francisco-based firm closed its second fund with $23.5 million in 2019.

People

Eclipse Ventures appointed Charly Mwangi as partner. He was previously executive vice president of manufacturing at Rivian.

White Star Capital said Tony Corbin joined the firm as a partner and chief financial officer. He was previously a director with PwC.

Anzu Partners, which focuses on early-stage industrial and life science technology companies, hired Donald (Don) J. Rosenberg as a venture partner at the firm. He recently retired as executive vice president, general counsel and corporate secretary at Qualcomm.

Exits

Software delivery platform CloudBees acquired DevOps startup ReleaseIQ for an undisclosed amount. CloudBees is backed by investors including Delta-v Capital, Matrix Partners and Lightspeed Venture Partners.

Raydiant, an in-location experience platform for brands, acquired digital shopper marketing platform Perch for an undisclosed sum. San Francisco-based Raydiant has raised $50 million from investors including 8VC, Atomic Ventures, Lerer Hippeau, Bloomberg Beta, Gaingels, Illuminate Ventures and Transmedia Capital. Perch is listed in the portfolios of Overton Venture Capital, Fernbrook Capital Management and Hemisphere Ventures.

Reading tutor provider Amira Learning purchased augmented-reality storytelling app Wonderscope from Within. Terms weren’t disclosed. San Francisco-based Amira Learning has raised more than $40 million from investors including Owl Ventures, Authentic Ventures, Vertical Venture Partners and Amazon’s Alexa Fund. Within is backed by Andreessen Horowitz, Temasek, Emerson Collective, Translink Capital, Raine Ventures and others.

Ocelot Inc., a student engagement platform, scored a $117 million investment from K1 Investment Management.

Grow Therapy, a New York-based mental healthcare startup, secured a $75 million round of Series B financing co-led by TCV and Transformation Capital.

Sitetracker, a developer of deployment operations management software for telecommunications and energy infrastructure providers, picked up $96 million in Series D funding consisting of $66 million in equity along with $30 million in debt. Energize Ventures led the equity portion, which included contributions from H.I.G. Growth Partners, National Grid Partners, Clearvision Ventures, NTT Docomo Ventures and Kingfisher Investment Advisors. Debt was provided by BridgeBank.

Pigment, a France-based business-planning platform, landed $65 million in Series B+ funding led by IVP and Meritech Capital Partners.

Workstream, a San Francisco-based hiring and onboarding platform for deskless workers, added $60 million in Series B funding, bringing the round total to $108 million. GGV Capital led the round, which included participation from Founders Fund, Coatue Management, BOND, Basis Set Ventures, CRV, WiL and Soma Capital.

Ox Security, a Tel Aviv-based provider of end-to-end software supply chain security, emerged from stealth with $34 million in funding. Evolution Equity Partners, Team8 and M12 co-led the financing, which included participation from Rain Capital.

Airplane, a startup whose technology enables engineers to build internal tools quickly, raised $32 million in Series B funding. Led by Thrive Capital, the round included additional support from Benchmark and others. 

PATH, a sustainable bottled water brand, fetched $30 million in Series A funding from investors including Altos Ventures, Blue Investment Group, HartBeat Ventures and others.

Una Brands, a Singapore-based e-commerce aggregator, secured $30 million led by White Star Capital and Alpha JWC Ventures in the first close of its Series B round. 

Coalesce.io, a San Francisco-based cloud data transformation platform, nabbed $26 million in Series A funding. Lead investor Emergence Capital was joined by 11.2 Capital, GreatPoint Ventures and Industry Ventures in the round.

Noodle.ai, a San Francisco- and India-based supply chain intelligence provider, closed a $25 million Series C round from the venture arm of ServiceNow and Honeywell Ventures.

Coral, a Miami-based startup developing a crypto wallet product, grabbed a $20 million investment co-led by FTX Ventures and Jump Crypto.

• Crypto fugitive Do Kwon’s firm accuses Korean prosecutors of overreach
   
• Bank of Mexico raises interest rates for 11th straight time
   
• Pension strategy left funds vulnerable to rate increases
   
• Cerebral treated a 17-year-old without his parents’ consent. They found out the day he died.
   
• Chinese EV maker Leapmotor flops in Hong Kong market debut

• How Morgan Stanley CEO buttered up Elon Musk while Larry Ellison brushed him off (The Information)
   
• Figma CPO hopes Adobe deal will bring a bigger market and the same ‘casual’ customer relationships (Protocol)
   
• AI can now create any image in seconds, bringing wonder and danger (Washington Post)

This newsletter was compiled by Marc Vartabedian 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 and Marc Vartabedian.

Follow us on Twitter: @wsjvc