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Is Venture Debt Good for Startups?
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By Marc Vartabedian, WSJ Pro
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Good day. After a couple of flattish years, deals funded by venture debt suddenly jolted back to life. Last year, $53.3 billion of such deals were struck, a 94% leap from 2023, according to the latest PitchBook-NVCA Venture Monitor. Debt deals at the venture-growth stage—generally Series E or later—accounted for almost 78% of the total venture-debt deal value in 2024, the report said.
We would like to hear from readers: Have VCs noticed more debt financing recently among their portfolio companies? What are the advantages–or disadvantages–of debt in today's market? Please email responses to vcnews@wsj.com.
Last week, we asked whether you expect a surge in M&A around cybersecurity following Google's $32 billion deal to buy cyber startup Wiz. Here are responses, edited for clarity and length.
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Bob Ackerman, managing partner and co-founder of DataTribe and founder, managing director and chairman of AllegisCyber Capital: “Google’s planned acquisition of Wiz likely kicks off a new ‘gold rush’ round of M&A in cybersecurity, as competing cloud providers are forced to respond to Google’s new ‘table stakes’ for hybrid cloud environments. With this fuse lit, we can expect increased M&A activity as the broader cyber platforms step into the market to upgrade and expand their capabilities.”
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Alex Doll, co-founder and managing general partner at Ten Eleven Ventures: “The great thing about cybersecurity investing is that every tech revolution needs a security backbone. Take cloud adoption 5–7 years ago. Security was key to building trust and enabling its rapid growth. Now, we’re seeing the same pattern with AI. With all the valid concerns around AI security, cybersecurity is stepping into an even bigger spotlight. The boom in venture investment into AI security startups signals another wave of acquisitions.”
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Dana Eli-Lorch, co-founder and general partner at Vesey Ventures: “A perfect storm is accelerating consolidation: increasingly sophisticated attacks, the rise of AI, pressure on CISOs, and a crowded startup ecosystem. Enterprises want fewer vendors and fuller solutions—and M&A will follow. But let’s be real: not every startup gets a Wiz-style valuation. There are only so many buyers with the balance sheet—or stomach—to play at that level.”
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And now on to the news...
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Ryan Petersen, Flexport founder and chief executive, shown in 2022. PHOTO: ARND WIEGMANN/REUTERS
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Profitability pushed forward. Flexport, the tech-focused freight forwarder that launched more than a decade ago, is extending its timeline to reach profitability, according to the WSJ’s Logistics Report. Ryan Petersen, the privately held company’s founder and chief executive, says Flexport missed its target of profitability at the end of 2024 largely because of weaker-than-expected demand for its e-commerce fulfillment and distribution services.
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Petersen said too much of the company’s 5.2 million square feet of warehouse space, spread across five buildings, went unfilled last year.
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He said demand for fulfillment services is rebounding and that he expects Flexport will be “quite profitable” by the end of 2025.
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$2.1 Billion
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Flexport’s revenue last year, up from $1.6 billion in 2023, according to the company’s Founder and Chief Executive Ryan Petersen.
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Private-Equity Job Market Faces Critical Test in 2025
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Demand for private-equity workers has remained strong through a yearslong slump in the industry’s fortunes, but 2025 will be a make-or-break year for firms under pressure to attract the best talent, recruiters say, WSJ Pro reports. The ongoing private-equity downturn has reshaped the industry’s talent market. Big firms with multiple lines of business have held up the best, extending their lead over smaller, single-strategy buyout shops, which have found it harder to add and keep top employees. Demand from the biggest firms has kept private-equity salaries and bonuses afloat. But 2025 is a key test for an industry that thus far—with a few exceptions—hasn’t had to resort to layoffs, said Chris Connors, a Johnson Associates principal.
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People
Sequence Equity, a private-equity and venture-capital investor focused on human optimization and sports, said Brett Brewer joined the firm as a managing partner. He was previously a general partner at Crosscut, a firm he co-founded.
SpyGlass Pharma, an ophthalmic drug-delivery startup, appointed Chetan Pujara as chief research and development officer. He most recently served as chief development officer at Osanni.
Supply-chain automation provider Project44 appointed Jonathan Scherr as chief strategy and operations officer. He was most recently co-founder and chief executive officer of Juno.
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Also, a Palo Alto, Calif.-based electric micromobility startup, emerged from stealth with $105 million in funding from Eclipse.
Augustine Therapeutics, a Belgium-based startup focused on developing new therapies for neuromuscular, neurodegenerative and cardio-metabolic diseases, scored €77.7 million in Series A funding co-led by Novo Holdings and Jeito Capital.
Marvel Fusion, a Munich-based fusion energy startup, added €50 million in Series B funding, bringing the round total to €113 million. The new investment included participation from EQT Ventures, Siemens Energy Ventures and the European Innovation Council Fund.
Mendel, a Mexico City-based enterprise spend management platform serving Latin America, closed a $35 million Series B round led by Base10 Partners.
Allen Control Systems, an Austin, Texas-based developer of autonomous precision robotics for defense, secured $30 million in Series A financing led by Craft Ventures.
Straiker, a Sunnyvale, Calif.-based startup providing real-time protection for AI applications and agents, launched from stealth with $21 million in initial funding from Lightspeed and Bain Capital Ventures.
GetReal Security, a San Mateo, Calif.-based startup specializing in the detection and mitigation of malicious generative AI threats, completed a $17.5 million Series A round. Forgepoint Capital led the investment, with Co-Founder and Managing Director Alberto Yépez joining the company’s board.
Yutori, a San Francisco-based startup building personal AI assistants that automate everyday digital tasks, emerged from stealth with $15 million in seed funding led by Radical Ventures.
Hakimo, a Menlo Park, Calif.-based startup that builds AI agents for physical security monitoring, picked up a $10.5 million Series A round led by Vertex Ventures and Zigg Capital.
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Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.
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Pat Gelsinger was ousted as Intel CEO after the board lost confidence in his turnaround plan for the legacy chip maker. Now he’s planning a few more technology long shots.
A broad cross-section of American business is dialing up its opposition to the Trump administration’s plan to impose steep fees on Chinese ships calling at American ports.
Southwest, an outlier in the airline industry for its fuel hedging, is ditching the program because it has gotten too costly and hasn’t paid off for much of the past decade.
SEC Republican Commissioner Hester Peirce would like to see big changes to how the agency creates, and enforces, its rules.
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Ubisoft, a French videogame company, said its deal with Tencent values the newly formed subsidiary at an enterprise value—including debt—of €4 billion. PHOTO: TROY HARVEY/BLOOMBERG NEWS
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