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Question of the Week: How Are Climate Tech Startups Faring?
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By Yuliya Chernova, WSJ Pro
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Good day. Climate Week NYC, which runs through Sunday, offers investors, founders and others a chance to assess, among other things, the outlook for venture-backed climate tech companies. We’d like to hear from readers as well: How are climate tech startups dealing with the challenges the market is facing? Email responses to vcnews@wsj.com.
Last week, we asked whether there’s a point of diminishing returns for "founder mode." Below are responses, edited for length and clarity.
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Elizabeth Joy Zalman, co-founder and CEO of startup Sandgarden and co-author of “Founder vs Investor: The Honest Truth About Venture Capital From Startup to IPO”: “I’ve been in situations where I had to step back in order to have the company scale—like not being able to interview every person we were hiring. I’ve been in other situations of scale where the opposite had to happen: Inter-team communication had irrevocably broken down and the job required me going so deep into the weeds that they weren’t weeds anymore; they were roots.”
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Ven Raju, managing director of Riverfront Ventures and president and CEO of Innovation Works, a seed-stage investor focused on southwestern Pennsylvania: "Founder involvement at the ground level can be crucial in the early stages of a company. Their passion and vision help set the tone and culture, helping to drive the most critical breakthroughs. However, as a company scales, there's a point where founder micromanagement can impede growth. The most successful founders learn to build a strong team of functional and domain experts and in turn trust their team to help drive growth and scale."
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And now on to the news...
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StepStone Group is based in New York. PHOTO: CHARLY TRIBALLEAU/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Private-equity secondary deals. StepStone Group has wrapped up its latest fund focused on secondhand private-equity assets with more than double the amount it raised for the fund’s predecessor, a sign of the continued resilience of secondaries in a historically poor period for private-equity fundraising overall, WSJ Pro reports. The private-asset manager raised $4.8 billion for StepStone Secondary Opportunities Fund V, its latest flagship fund dedicated to acquiring stakes in private-equity funds from institutional investors, StepStone said. The firm also raised around $2.6 billion for separate accounts managed on behalf
of certain institutions, which invest into deals alongside the main vehicle.
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Many secondary buyers and investors believe the market is on the verge of a multiyear bull run. More institutional investors are selling off illiquid assets to generate much needed cash and fund managers are looking for ways to extend their hold of businesses.
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“[Limited partners] see the attractive nature of secondaries because their programs are stretched."
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— John Kettnich, a partner with StepStone Group
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First Novel Schizophrenia Treatment in Decades Gains FDA Approval
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The first new kind of treatment for schizophrenia patients in decades is arriving. The Wall Street Journal reports. The U.S. Food and Drug Administration approved the drug on Thursday, greenlighting the first of a new class of treatments that could help stabilize patients’ symptoms without the uncomfortable side effects that accompany existing antipsychotics. The new drug, called Cobenfy, works differently than the class of drugs used by many Americans today to treat schizophrenia, ones with such troublesome side effects that many people skip taking them. The Bristol-Myers Squibb drug works by mobilizing a new target in the brain that scientists made inroads
researching only in the past couple of decades. The treatment was the centerpiece of Bristol’s $14 billion acquisition of Karuna Therapeutics.
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A U.S. Crackdown Targeted a Silicon Valley ‘Pill Mill.’ Secretly, It Had Already Moved to China.
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Federal authorities came down hard on Done Global, the California-based telehealth startup that prosecutors allege is an Adderall “pill mill” with a “predatory business model.” Its founder was arrested and most of its U.S. staff have quit, but it’s still pumping out prescriptions to its American clientele, WSJ reports.
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Done’s big secret? Key operations were moved to China. Its staff there have been aggressive in making sure customers can still get easy prescriptions for Adderall, a drug prescribed for attention-deficit hyperactivity disorder that is also among the most abused drugs in the country.
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Funds
ARCH Venture Partners closed its thirteenth fund with more than $3 billion in commitments to continue investing in early-stage biotechnology companies. The firm, which has offices in Chicago, San Francisco and Seattle, raised nearly $3 billion for its Fund XII in 2022.
People
New-York-based venture studio Aegis Ventures added Molly O'Neill as chief strategic partnerships officer. She was most recently at Medforth Global Healthcare Education and Proteus Digital Health.
Measurabl, an environmental, social and governance technology platform for real estate, promoted Maureen Waters from chief growth officer to president. Prior to joining the company, she was a partner at Metaprop and president of Ten-X.
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Supabase, an open-source database platform for developers, raised $80 million in Series C funding co-led by Craft Ventures and Peak XV Partners.
Qure.ai, a Mumbai-headquartered AI-driven healthcare diagnostics provider, completed a $65 million Series D round from Lightspeed Venture Partners and others.
Cyclic Materials, a Toronto-headquartered cleantech startup creating a circular supply chain for rare earth elements and other critical materials, closed a $53 million Series B round. ArcTern Ventures led the funding, which included participation from Climate Investment and others.
858 Therapeutics, a San Diego-based startup developing small molecule drugs that act on novel therapeutic targets in oncology and immunology, scored $50 million in Series B funding. Avidity Partners led the round, with Managing Director Monal Mehta joining the company’s board.
Mirai Bio, a Cambridge, Mass.-based genetic medicine development platform, landed a $50 million investment from Flagship Pioneering.
InDebted, a Sydney-based consumer debt management provider, collected 60 million Australian dollars in Series C funding, valuing the company at A$350 million. Airtree Ventures led the round.
Apron, a business payments platform, raised a $30 million Series B round led by Zinal Growth.
Raycast, a platform enabling users to launch and navigate applications, secured $30 million in Series B financing. Atomico led the round, with Partner Luca Eisenstecken joining the company’s board.
Prepared, a New York-based AI platform for emergency communication, picked up $27 million in Series B funding led by Andreessen Horowitz.
GEOX, an AI-powered platform for analyzing real-estate risk from climate-related disasters, grabbed $19 million in Series A funding led by Flashpoint Venture 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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Peloton’s chief marketing officer has a strategy to get the beleaguered fitness company back on track: Don’t talk only about the bike.
Private equity’s takeover of thousands of healthcare businesses has sparked a backlash among physicians, and many are joining together to oppose corporate influence in U.S. medicine.
A profusion of venture mega-rounds in biotech is being seen as a flight to quality, with high-caliber science, entrepreneurs and investors increasingly clustering together.
Data centers have long been squat, utilitarian boxes. But as they move to cities and suburbs, they’re going multistory and getting fresh touches like glass and greenery.
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ILLUSTRATION: WSJ
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