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Dealmaking Continues for Israeli VCs and Startup Founders Amid Attack
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By Yuliya Chernova, WSJ Pro
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Good day. Michael Eisenberg, a general partner at Israeli venture firm Aleph, was in Tel Aviv early Tuesday, taking two meetings with founders pitching their startups. Later in the day he was home in Jerusalem when Iran began its missile barrage on Israel.
“I don’t make light of it. It’s not fun to have your door rattled by missiles,” said Eisenberg, who sheltered in a safe room in his apartment with his three daughters and a two-month-old granddaughter.
Business goes on in Israel despite the military escalation with Iran and Hezbollah, he said, noting a founder of one of Aleph’s companies took a video call in a bomb shelter on Tuesday with a potential investor in California.
Fundraising by Israeli startups declined last year from 2022, but it has seen an uptick recently, according to Dealroom. The data provider said Israeli startups raised $3 billion in the second quarter of this year, the best quarterly showing in the past two years.
Interruptions to air travel, which Eisenberg blames on large U.S. airlines that stopped flights to Israel, has hurt business. Israeli founders are still getting around the world but travel is slower and more expensive.
Itamar Friedman, co-founder and chief executive of Tel Aviv-based AI startup Qodo, formerly CodiumAI, learned of Iran’s attack while in Seattle at the AWS Generative AI Accelerator. On Monday, Qodo, which develops AI technology for software code generation and integrity, announced a $40 million Series A led by Susa Ventures and Square Peg.
“It’s heartbreaking I’m not with my kids while they are experiencing this,” Friedman said of Tuesday’s missile attack. “This is part of the sacrifice I feel I’m doing as a founder. At the same it is a critical time for the Israeli economy to be strong.”
Qodo received several term sheets over 10 days of fundraising this summer, he said, showing many venture investors remain excited about Israeli startups despite the Gaza war and its related conflicts.
Qodo’s business, which helps developers ensure AI-generated code is sound, has been strong, Friedman said. Qodo began selling to companies in April and crossed $1 million in annual recurring revenue in the second quarter, and it could cross $10 million in ARR by the end of 2025, he said.
Friedman expects to return to Israel, probably through Dubai, after the accelerator ends later this week. He said he was able to focus solely on his company for a while, but as a reservist with the Israel Defense Forces he expects to be in and out of uniform after he comes home.
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And now on to the news...
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Eleven percent of CISOs changed employers this year, compared with 12% in 2023 and 21% in 2022. PHOTO: FRANCESCA VOLPI/BLOOMBERG NEWS
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Pay rises for cyber chiefs. Cybersecurity executives now earn an average of $565,000, reflecting a moderate increase at a time when cyber threats are growing and regulatory pressure is adding stress to the role, WSJ Pro reports. Corporate chief information security officers are on the hook for defending their companies against cyberattacks, as well as handling breach response, participating in regulatory inquiries and, at times, supplying information during litigation. Pay is rising as the job evolves, but not at the pace of change. “The scope of the role and the demands of the CISO are increasing at a much faster rate than the rewards and compensation,” said
Nick Kakolowski, senior research director at cybersecurity firm IANS.
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$565,000
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Average compensation for cyber leaders in the U.S. in 2024, according to a survey from IANS and recruiting company Artico Search published Wednesday.
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Apollo’s Marc Rowan Says Raising Money Is No Longer the Hard Part. Finding Deals Is.
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The success of private-equity firms has long hinged on their ability to raise money. Apollo Global Management Chief Executive Marc Rowan says a firm’s fate in coming years will be determined by whether it can find good ways to invest that money, The Wall Street Journal reports. Rowan said Tuesday at Apollo’s investor day in New York that the industry has the potential to capture trillions of dollars from people saving for retirement and from individuals and institutions looking for an alternative to increasingly concentrated public markets. “We’ve trained ourselves to think that we’re limited by capital,” Rowan said in an interview with the Journal ahead of his remarks on Tuesday. “Maybe we are
actually limited by investment opportunities.”
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Venture Capital Pioneer Vinod Khosla Says AI Will Deliver Broad Deflation
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At a time of widespread concerns about the safety, efficacy and economics of AI, venture capital pioneer Vinod Khosla is still all in.
Yes, artificial intelligence will become capable of replacing a good deal of human labor, Khosla said in an interview, but that will push down the price of healthcare, education and other services. Many current forms of work will even be eliminated, but society will be able to create a more robust safety net than is possible today.
“Most expertise in the world, whether you’re talking about structural engineers, oncologists, mental health therapists or primary care doctors, or journalists and teachers, that expertise will be near-free for all of us to access,” Khosla said at Khosla Ventures’ offices on Sand Hill Road in Silicon Valley.
Khosla, 69, is worth listening to at a freighted moment for the development of AI, partly because of his record as a driving force in technology since he co-founded Sun Microsystems in 1982.
Read the full column.
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Impulse Space, a Redondo Beach, Calif.-based company involved in in-space transportation services, said it has raised a $150 million Series B financing. The funding will help Impulse expand its team and support production of its Helios and Mira vehicles. The round brings the company’s total funding to $225 million.
Numa, a San Francisco-based startup that offers AI technology to auto dealerships, said it raised a $32 million Series B round from lead investors Mitsui and Touring Capital. Costanoa Ventures, Threshold and Gradient Ventures, a Google fund focused on AI startups, also participated.
Enterprise software startup xtype, based in Covina, Calif., has raised a $21 million Series A round, led by Norwest Venture Partners, with participation from ServiceNow Ventures, Columbia Capital and Inner Loop Capital.
Culver City, Calif.-based Salient Motion, an aerospace and defense component supplier, said it has raised $12 million in pre-seed and seed rounds. Cantos Ventures led the company’s seed round, while Andreessen Horowitz led its pre-seed. Other investors include AE Ventures, Hummingbird Ventures and BoxGroup.
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Online sports-betting and fantasy-sports companies deploy VIP hosts to build relationships with big-spending customers. PHOTO: RICHARD B. LEVINE/ZUMA PRESS
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He stole $22 million to fund his gambling addiction. Now, he’s suing FanDuel.
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Snap failed to warn users about sextortion risks, state lawsuit alleges
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For Happiest Baby, maker of $1,700 bassinet, growth comes at cost of angry parents
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Teeth-cleaning robots, red-light therapy: what’s ahead for dental health
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