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Portag3 Ventures Eyes Fintech; $65 Million Customer Analytics Bet; Immune System Startup Funding; Indian Loan Startups Gain Steam
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By Marc Vartabedian, WSJ Pro
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Good day. A new fund managed by Portag3 Ventures is targeting financial-technology startups. So far the firm has backed 17 startups and is part of a growing number of investment affiliates of Sagard, an investment subsidiary of Power Corp. of Canada.
Meanwhile, Sequoia Capital led a $65 million bet on artificial intelligence-based customer analytics startup Gong.io Inc. as more companies turn to AI to leverage data.
Plus, investors backed biotechnology startup IFM Therapeutics LLC's business strategy, which has led to two deals this year.
And now on to the news...
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Paul Desmarais III, left, chairman of Portag3 Ventures, and Adam Felesky, right, chief executive at the firm, speak at a Portag3 conference earlier this year. PHOTO: Portag3 Ventures
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New fintech fund. Portag3 Ventures, a financial technology-focused venture capital arm of Sagard Holdings, said it has closed its second fund with 427 million Canadian dollars ($321 million), WSJ Pro's Laura Kreutzer reports.
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Portag3 Ventures II LP closed at more than four times the size of the firm’s debut fund, which wrapped up with about C$100 million in 2016.
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The Toronto-based firm raised capital for its new fund from a list of Canadian institutions that include pension managers Caisse de dépôt et placement du Québec and Public Sector Pension Investment Board, financial institutions Alterna Savings and Credit Union Ltd., Laurentian Bank, National Bank of Canada and Equitable Bank as well as insurers Intact Financial Corp. and La Capitale Insurance and Financial Services.
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Portag3 is targeting larger investments in startups than it did with its previous fund, aiming for 10% to 20% ownership stakes.
Customer analytics funding. Business-analytics startup Gong.io Inc. has raised $65 million in part to expand the use of its enterprise software to departments across companies looking for ways to integrate artificial intelligence, WSJ Pro's Marc Vartabedian reports. Sequoia Capital led the Series C round, with participation from existing investors Battery Ventures and others. Gong’s software connects to a customer’s communications systems and records, transcribes and uses AI to find insights on what works and what doesn’t.
Biotech capital. Venture capitalists invested $55.5 million in entities launched by biotechnology startup IFM Therapeutics LLC, betting on a business strategy that has led to two deals with Novartis AG this year, WSJ Pro's Brian Gormley reports. Boston-based IFM develops drugs that modulate the innate arm of the immune system to treat diseases. It houses each drug program in its own subsidiary. This way, a corporate partner can strike a deal to acquire access to a specific drug program without taking on nonstrategic assets.
Loan startups. Silicon Valley venture capital is funding a wave of fintech startups in India that use data from borrowers’ cellphones to collect on debts in ways that are illegal in both India and the U.S., WSJ's Newley Purnell and Justin Scheck report. The startups are providing much-needed credit in India, where consumer lending has been limited by a lack of credit scores and by banks that are reluctant to make personal loans. While the newcomers’ tactics are illegal, they are ignored by Indian regulators who want to encourage lending, according to analysts and company insiders.
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Publicly traded Tenable Inc. acquired industrial cybersecurity provider Indegy Ltd. for an undisclosed amount. New York-based Indegy was backed by investors including Liberty Technology Venture Capital, O.G. Tech Ventures, Magma Venture Partners, Vertex Ventures and Aspect Ventures.
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Accel raised $550 million for its sixth India fund. The early-stage investor’s fifth Indian fund closed in 2016 with $450 million, while its fourth fund collected $325 million the prior year.
Aberdeen Standard Investments has raised at least $156.9 million so far for Aberdeen Venture Partners XI LP and a related offshore vehicle, according to a filing with the Securities and Exchange Commission. The amount the firm has raised so far for the venture-focused fund of funds is more than three quarters of the way toward a $200 million offering amount indicated in the latest filing and exceeds a $150 million offering amount indicated in an earlier SEC filing last year.
New York diversity-focused firm Harlem Capital closed its inaugural fund at $40.3 million, more than $15 million over its original target. Limited partners included TPG, State of Michigan Retirement Systems, Vanderbilt University, the Harry and Jeanette Weinberg Foundation, W.K. Kellogg Foundation, Consumer Technology Association and Dorm Room Fund. Harlem Capital Partners Venture Fund I LP has invested in eight companies so far including gig economy job marketplace Jobble, pet wellness platform Wagmo and feminine hygiene products startup Aunt Flow.
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Ether, which runs on the Ethereum blockchain, is the world’s second-largest cryptocurrency by market value. PHOTO: DADO RUVIC/REUTERS
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Nearly $50 million of ether swiped from South Korean cryptocurrency exchange. Upbit says it has barred all cryptocurrency withdrawals and deposits at the exchange since the heist.
Amazon rolls out quantum-computing service. Select customers will be able to test quantum algorithms, hardware.
Commentary: drone-delivery projects must look beyond the hype. Unmanned aircraft have a role in the future of logistics, but pie-in-the-sky forecasts should give way to reality.
FBI warns FaceApp could pose counterintelligence threat. The viral app and similar products could be exploited by the Russian government, federal authorities say.
The hidden power of poetry to make better entrepreneurs. Studying verse can help build creative thinking that is crucial for founders, educator says.
Chinese citizens must scan their faces to register for new mobile-phone service. New requirement will further increase the government’s scrutiny of its people.
With Brits used to surveillance, more companies try tracking faces. Businesses flag suspected shoplifters and troublemakers.
Online brands tap customer data to create pop-up shops. Retail sites have a wealth of detailed information that they use to focus their temporary stores.
Singapore orders Facebook to correct user’s social-media post. Directive is first test for tech company since city-state passed broad law to regulate social media.
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Dolls Kill, a San Francisco-based fashion brand, picked up a $40 million Series B investment. Sequoia led the round, with Partner Alfred Lin joining the company’s board.
Diabeloop SA, a French diabetes management startup, closed a €31 million ($34.3 million) Series B round. Investors included company management, Air Liquide Venture Capital, Supernova Invest, Sofimac Innovation, Kreaxi and Crédit Agricole.
Cazoo Ltd., a London-based startup that sells and delivers used cars, launched with a £25 million ($32.3 million) round of funding from investors including General Catalyst and Mubadala Capital.
Migo, a San Mateo, Calif.-based provider of credit access to consumers in emerging markets, completed a $20 million Series B round led by Valor Capital Group. Existing backers The Rise Fund and Velocity Capital also participated, along with new investors Africinvest and Cathay Innovation. Valor’s Antoine Colaco joined the company’s board.
Ockam, a San Francisco-based secure internet-of-things development startup, was seeded with a $4.9 million investment from Future Ventures, Core Venture Group, Okta Ventures and SGH Capital. Future’s Maryanna Saenko joined the board.
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Konstantine Buhler joined Sequoia Capital as a partner in its seed and early-stage practice. He was previously a principal at Meritech Capital Partners.
Boston-based venture firm PJC named Rob May as a general partner, where he will focus on investments in artificial intelligence, hardware, business-to-business and software-as-a-service. Mr. May co-founded and was formerly chief executive of Talla.
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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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