Good day. More people left startups than joined them in 2023, according to a new report from Carta, a reversal after years of swelling payrolls.

A capital crunch and a greater reliance on artificial intelligence technology have contributed to the contraction, founders and investors say.

Total net head count declined for the first time annually in at least five years, as far back as the data goes, according to Carta. The company aggregates information across about 40,000 U.S. privately held businesses that use its capitalization table management software. They currently employ more than one million people.

Companies were still hiring, though much less aggressively than in prior years. Layoffs and voluntary departures, meanwhile, exceeded total additions last year, Carta said.

“I think this is a net positive and founders are getting more capital efficient,” said Jenny Fielding, managing partner and co-founder of venture firm Everywhere Ventures.

Read the full article. 

And now on to the news...

Cybersecurity company raises Series E. Nozomi Networks has secured $100 million in a Series E funding round, making it the latest company focusing on industrial technology to successfully raise significant investment in recent months, WSJ Pro reports.

• Nozomi, which brought its first product to market in November 2013, develops technology designed to secure the internet-connected devices and systems used to support the day-to-day running of critical infrastructure such as power grids, oil and gas facilities, manufacturing plants and water utilities.
   
• Manufacturers Mitsubishi Electric and Schneider Electric participated in the round. Previous investors in Nozomi, which has raised around $250 million to date, include manufacturing companies Honeywell, Johnson Controls and Keysight Technologies, as well as the venture arm of the U.S. Central Intelligence Agency, In-Q-Tel.

U.S. lawmakers introduced a new bill to Congress on Tuesday aimed at stepping up American interests in deep-sea mining, specifically pushing for financial, diplomatic and infrastructure support for the industry, WSJ Pro reports. Deep-sea mining, the process of collecting minerals from the seafloor, remains controversial with environmental groups but has been gaining traction with U.S. lawmakers as a way of providing alternate sources of minerals needed for U.S. industry needs without having to rely on China.

People

Provi, an online marketplace for the beverage alcohol industry, appointed Kevin Price to the post of chief financial officer. He was previously CFO at Guayaki Yerba Mate and Farmer’s Fridge.

CarbonCapture, a Los Angeles-based developer of direct air capture machines that remove carbon dioxide from the atmosphere, closed an $80 million Series A round. Prime Movers Lab led the round, which included participation from Amazon’s Climate Pledge Fund.

Bear Robotics, a Redwood City, Calif.-based developer of autonomous service robots powered by artificial intelligence, scored a $60 million Series C round from LG Electronics.

Tavus, a San Francisco-headquartered generative AI video research startup, secured $18 million in Series A financing. Scale Venture Partners led the round, with Partner Rory O’Driscoll joining the company’s board.

Axion Ray, a Brooklyn, N.Y.-based AI observability platform helping manufacturing companies detect and solve emerging field quality issues, landed $17.5 million in Series A funding led by Bessemer Venture Partners.

Loop, a San Francisco-based automated delivery intelligence platform for restaurants, completed a $6 million seed round led by Base10 Partners.

Paylode, a Miami-based startup helping companies launch, manage and monetize perks programs for their customers, raised $5.5 million in seed funding from investors including Susa Ventures, Vinyl Capital and Day One Ventures.

The New Club, a San Francisco-based professional network for women in engineering, raised $3.1 million in funding from Sierra Ventures and others.

Another Tomorrow, a New York-based sustainability-focused luxury clothing brand, collected a $2 million investment from Una Terra. Luca Zerbini, chief executive officer and founding partner of Una Terra, will join the board.

• How TikTok was blindsided by a U.S. bill that could ban it
   
• OpenAI calls Elon Musk ‘incoherent’ in legal filing
   
• Tesla, Ford receive ‘poor’ grades in study of driver-assist technology
   
• Apple makes further concessions to app developers in Europe
   
• Do you have painful ‘tech neck?’ This expert-approved gadget might help
   
• How to protect your smart home from hackers
   
• How technology speeds up the hunt for bad science

• Weather forecasts have become much more accurate; we now need to make them available to everyone (Our World in Data)
   
• What sets successful startup accelerators apart (Harvard Business Review)  

This newsletter was compiled by Yuliya Chernova, Matthew Strozier 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.

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