Good day. Two small first-time fund announcements last week indicate there’s still some life left in new venture firms' ability to get off the ground despite a dismal fundraising environment.

Venture-market pullbacks often hit first-time fundraising hard because limited partners, which invest in venture funds, sometimes opt to back more established firms in an effort to minimize risk.

U.S.-based debut funds netted $6.1 billion through the first three quarters of this year, according to a report by analytics firm PitchBook Data and the National Venture Capital Association, a trade group. These funds raised $10.3 billion all of last year and $22.2 billion in the easy money days of 2021.  

Factor Capital Management, a Charlottesville, Va.-based firm founded this year, said it raised about $10 million in the first close on its debut venture fund. The fund aims to invest up to $30 million in seed-stage startups developing blockchain technology. Limited partners include crypto investment firm GSR Markets and Theta Capital Management.

Ex/ante, a New York-based pre-seed and seed-stage firm, launched with $33 million in capital commitments from Union Square Ventures, Cendana, which invests in venture funds, the Ford Foundation, Schmidt Futures, the philanthropic initiative co-founded by Eric and Wendy Schmidt, among others. Andreessen Horowitz co-founder and general partner Marc Andreessen also invested in the fund. The fund will target startups in sectors including cybersecurity, artificial intelligence, data infrastructure, fintech and crypto.

And now on to the news...

Crypto’s broken dreams. Sam Bankman-Fried is gone. And crypto is back to its favorite activity: a wild speculative rally, The Wall Street Journal reports. The FTX founder’s trial featured a parade of witnesses detailing a multibillion-dollar fraud at the heart of the crypto market. None of it dented the enthusiasm of crypto investors. During the trial, crypto prices surged on optimism that U.S. regulators would allow an exchange-traded fund that holds bitcoin.

Meanwhile, the ambitions of cryptocurrency advocates to remake the traditional financial system remain a distant dream.

• Companies that once seemed like pillars of a new digital-asset economy, such as FTX and crypto lender Genesis Global, are bankrupt. Venture-capital investment in crypto has fallen to its lowest level since 2020. Investors have pulled back from previously hot efforts to build the equivalent of banks and exchanges using blockchain technology.

Foreign-born workers account for nearly one-in-five of the top 1% wage earners in the U.S., new research shows.

Overseas-born workers declined slightly as a share of the U.S. workforce between 2005 and 2019. Still, their presence in the top 1% of wage-earners climbed to 19.7% from 13.4%, according to research recently published by the Federal Reserve Bank of Minneapolis.

Independent sponsors, who typically raise money for each deal rather than investing out of a fund, say they are finding plenty of opportunities and taking on larger deals, even with a broader market slowdown, Maria Armental reports.

“Our market here is pretty much on fire,” Russ Spieler, co-founder and managing partner of investment and advisory firm Enceladus Partners, said at a webinar hosted by Expert Webcast.

Funds

Norrsken22 closed its first African technology growth fund at $205 million, surpassing a $200 million target.

People

Israel-based Red Dot Capital Partners promoted Atad Peled and Danielle Ardon Baratz as partners. Before joining the firm, Peled worked as a product manager in the security divisions of Cisco, Akamai and AWS. Ardon Baratz was previously at O.G. Venture Partners.

Enterprise browser startup Island added Matt Fairbanks as chief marketing officer and Ellen Roeckl as chief communications officer. Fairbanks was most recently CMO at Sophos. Roeckl previously worked at companies including Fastly, Symantec and Juniper Networks. Last month, Dallas-based Island said it raised a $100 million Series C round led by Prysm Capital.

Clari, a revenue collaboration and governance provider, promoted Kevin Knieriem to president, strategic GTM. The company also appointed Ben Fiechtner as chief revenue officer and Scott Peyser as senior vice president of revenue operations.

Exits

Property-casualty insurer Travelers agreed to acquire Corvus Insurance Holdings, a cyber insurance managing general underwriter, for about $435 million. The deal is expected to close in the first quarter of 2024.

Digital operations management company PagerDuty agreed to buy incident analysis platform Jeli for an undisclosed amount.

Infinitum, an Austin, Texas-based sustainable-motor maker, scored a $185 million Series E round led by Just Climate.

Gynesonics, a Redwood City, Calif.-based women’s healthcare company focused on the development of minimally invasive treatments for symptomatic uterine fibroids, picked up a $42.5 million investment from Amzak Healthcare, Endeavour Vision and others.

Nowsta, a Brooklyn, N.Y.-based hourly workforce management platform, landed $35 million in Series C financing led by VMG Partners.

Imagine Pharma, a Pittsburgh-based biotech startup focusing on oral delivery, therapeutics and regenerative medicine, secured $32.5 million in Series A funding. IP Investors led the round, with John T. Callaghan joining the company’s board.

Payroll Integrations, a San Diego-based startup whose technology integrates payroll providers and benefit platforms, closed a $20 million Series A round led by Arthur Ventures.

Aclarity, a Mansfield, Mass.-based startup focused on the elimination of hazardous "forever chemicals," completed a $15.9 million Series A round led by Aqualateral.

Govly, a network for public sector procurement, snagged $9.5 million in Series A funding led by Insight Partners.

Wraithwatch, a Bozeman, Mont.-based cyber defense startup, was seeded with an $8 million investment led by Founders Fund.

P0 Security, a San Francisco-based startup helping security engineers secure cloud access and entitlements for developers, collected $5 million in seed funding from investors including Lightspeed Venture Partners.

• How farmers are teaching old tractors to think for themselves
   
• Meta pledges to allow marketplace customers to opt out of data sharing, U.K. regulator says
   
• A tech pioneer focused on making AI a force for good 
   
• A new way to​ tell deepfakes from real photos: Can it work?
   
• Investors aren’t buying Apple’s new iPhone
   
• Can a $400 box keep your packages safe from porch pirates?

• VCs launch emergency impact fund for war-affected Israeli startups (Times of Israel)
   
• Dall-E 3 is so good it’s stoking an artist revolt against AI scraping (Bloomberg)
   
• OpenSea slashes NFT marketplace staff by 50% (Decrypt)

This newsletter was compiled by Matthew Strozier, Marc Vartabedian 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.

Follow us on X: @wsjvc