Good day. Crossover investors are a vital part of the biotechnology ecosystem because of their role in helping drug startups hold strong initial public offerings. But their job has become more difficult recently.

Crossover investors have long invested in biotech venture rounds to build their positions in companies poised to go public. Startups use crossover financings to gain additional investors who can support them during and after their IPO.

These investors typically aim for a 10% to 30% discount to the price they project for the company’s IPO, according to Jonas Grossman, president of health-care investment bank Chardan Capital Markets LLC.

Projecting IPO prices is harder in today’s more-volatile market than it was before the pandemic, according to Mr. Grossman, adding that some biotech startups are going back to their existing investors for top-up financings instead of seeking a crossover round.

Some signs suggest that crossover players aren’t ready to pull back from private rounds just yet. A few biotechs have raised crossover financings in recent weeks, including Pandion Therapeutics Inc., which secured $80 million from a syndicate that included these investors.

And Mr. Grossman points out that crossover investors have raised significant capital in recent years and have money to deploy in private rounds if they choose.

And now on to the news...

No contact. Orion Innovation, a private equity-backed tech company, had to do without one key component of the deal-making process when it purchased engineering technology company Tekmark Global Solutions LLC this month: physical contact, WSJ Pro's Laura Kreutzer reports.

• “I’ve been in the private-equity industry for a quarter of a century, and that’s a lot of credit cycles,” said Chip Schorr, senior managing director at One Equity Partners, the midmarket buyout firm that has owned Orion since late 2018. “I’ve never closed a deal and done diligence completely virtually before.”
   
• The transaction, which closed on April 24, illustrates the importance of virtual technology to PE and VC firms trying to close deals in the midst of the coronavirus pandemic.
   
• Orion, based in Edison, N.J., provides technology and services to help businesses design and engineer products and services for their digital platforms. Its services include business intelligence, IT strategy and architecture, application development, cloud and infrastructure services, among others.

Hosting crisis. There's trouble facing an upper-crust of the gig economy: property owners and speculators who bought or leased real estate in pursuit of Airbnb profits. Airbnb spawned a cottage industry of homeowners running their own property empires, turning the startup into a hotelier without any hotels, the Journal reports.

• The sharing economy has proven particularly unstable in the pandemic. Silicon Valley championed the concept of turning America into a land of entrepreneurs taking advantage of flexible hours. People turned their cars into work stations for Uber and Lyft or became couriers for food-delivery services like DoorDash.
   
• They have taken a hit, but with Airbnb, the problems are broader. Hosts brought with them cleaning services, interior designers and property-maintenance workers who helped build miniature property empires—so their plight has ripple effects that go far beyond their own listings.
   
• Airbnb hosts saw $1.5 billion in bookings vanish in mid-March as the travel industry froze, according to AirDNA LLC.

Talent marketplace. Startup Gloat, which helps companies match employees with internal opportunities, has brought on two veteran entrepreneurs as advisers and investors, WSJ Pro's John McCormick reports. Lars Dalgaard and Aaron Au, co-founders of human-capital-management software company SuccessFactors, are joining the artificial-intelligence-driven startup.

Funds

Publicly traded financial technology firm FIS launched FIS Ventures, its venture investment division, to invest a target of $150 million over the next three years in fintech startups worldwide. Earlier this year FIS Ventures made its first investment, participating in Nigerian startup Flutterwave’s $35 million Series B round.

Partech Ventures closed its latest seed fund, Partech Entrepreneur III, with $100 million in commitments to continue investing across Europe, the U.S. and Asia. The firm raised €100 million for its preceding seed fund back in 2015.

People

SignalFire appointed Josh Constine as principal and head of content. He was previously editor-at-large at TechCrunch

Exits

Publicly traded security analytics and automation provider Rapid7 Inc. agreed to acquire competitor DivvyCloud for $145 million in cash and stock. Arlington, Va.-based DivvyCloud is backed by investors including RTP Ventures, MissionOG and Providence Strategic Growth.

Cheetah, a San Francisco-based startup offering contactless pickup and delivery of food and supplies, closed a $36 million Series B round of funding. Eclipse Ventures led the investment, which included participation from Iconiq Capital, Hanaco Ventures and Floodgate Fund.

LifeSprout Inc., a Baltimore-based aesthetic and regenerative medicine startup, completed a $28.5 million Series A round. Redmile Group led the funding, with participation from Nexus Management, Emerald Development Managers and the Abell Foundation.

Velo3D Inc., a Campbell, Calif.-based 3D metal printing startup, raised $28 million in Series D funding. New investors Piva and TNSC were joined by existing backers Bessemer Investment Partners, Playground and Khosla Ventures in the round.

Tecton.ai, a San Francisco-based data platform for machine learning, launched with $25 million in seed and Series A funding co-led by Andreessen Horowitz and Sequoia. Andreessen’s Martin Casado and Sequoia’s Matt Miller joined the company’s board.

AtaCor Medical Inc., a San Clemente, Calif.-based developer of extracardiac therapies, picked up a $25 million Series B investment. Participants included new investors Hatteras Venture Partners, Catalyst Health Ventures and Longview Ventures, along with previous backers Broadview Ventures and aMoon Fund. Darshana Zaveri of Catalyst Health and Jeff Terrell of Hatteras will join the board.

Catalyst, a New York-based customer management software provider, landed $25 million in Series B financing. Spark Capital led the round, which included support from Accel.

enVerid Systems Inc., a Westwood, Mass.-based heating, ventilation and air conditioning startup, closed a $20 million Series B round. Breakthrough Energy Ventures led the financing, with participation from Ajax Strategies, Building Ventures and OurCrowd.

Qoala, an Indonesian insurtech startup, raised a $13.5 million Series A round led by Centauri Fund. New investors in the financing included Sequoia India, Flourish Ventures, Kookmin Bank Investments, Mirae Asset Venture Investment and Mirae Asset Sekuritas, with existing backers MassMutual Ventures Southeast Asia, MDI Ventures, Surge, SeedPlus and Central Capital Ventura also participating.

Amply Power, a Mountain View, Calif.-based provider of charging technology for commercial electric vehicle fleets, fetched $13.2 million in Series A financing from investors including Soros Fund Management, Siemens, Congruent Ventures, PeopleFund and Obvious Ventures.

Vutiliti, a Salt Lake City-based smart utility monitoring provider, secured an $11.8 million Series A round. Constellation Technology Ventures and Cycle Capital Management led the investment, with Chevron Technology Ventures, University Venture Fund and Kickstart Seed Fund also participating.

Tomorrow Health, a New York-based home health-care platform, emerged from stealth with $7.5 million in seed funding led by Andreessen Horowitz.

Qorus, a Bellevue, Wash.-based platform for remote sales teams, collected a $5 million investment. WestRiver Group led the round, with Managing Directors Anthony Bontrager and Laurel Buckner joining the board.

• Mark Zuckerberg asserts control of Facebook, pushing aside dissenters.
   
• Google revenue climbs, in encouraging sign for big tech.
   
• Race for coronavirus vaccine accelerates as Pfizer says U.S. testing to begin next week.
   
• Senator pushes DOJ to open criminal investigation into Amazon.
   
• A coronavirus surge in screen time boosts chip makers.

• Marc Benioff’s $25 million blitz to buy protective gear from China. (New York Times)
   
• How spies snuck malware into the Google Play store—again and again. (Wired)
   
• Uber discusses plan to lay off about 20% of employees. (The Information)
   
• Apple adds Covid-19 testing sites to maps across the U.S. and shares more mobility data. (TechCrunch)
   

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: Matthew Strozier, Tomio Geron, Yuliya Chernova, Brian Gormley and Marc Vartabedian.

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