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Three Questions With CapitalG Talent Partner Lauren Illovsky
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Good day. Employers are posting fewer job openings and more workers are getting laid off, the Labor Department reported this week—the upshot of a year’s worth of interest-rate hikes and unsteady market conditions. That affects employment across the startup ecosystem, for better or worse, said Lauren Illovsky, a talent partner at Alphabet’s independent venture-capital investor CapitalG.
Ms. Illovsky, who joined CapitalG in 2021 after similar roles at Andreessen Horowitz, Accel and Gradient Ventures, spends her days searching for prized software engineers, marketers and accountants who may benefit a portfolio startup’s executive team or its board. What does the startup jobs market look like these days? WSJ Pro put the question to Ms. Illovsky. The interview has been edited for length and clarity.
WSJ Pro: For starters, what is a ‘talent partner’?
Ms. Illovsky: While the role varies a bit from firm to firm, it almost always involves supporting portfolio companies and their CEOs on C-level hiring, organizational design and board composition. Since CapitalG maintains a small, concentrated portfolio, I’m able to spend a lot of time with each executive team. I also spend a significant amount of time nurturing our executive network and long-term relationships with established and emerging leaders across the industry.
WSJ Pro: What key challenges do startups face today in finding and recruiting workers?
Ms. Illovsky: Even though the talent market has softened a bit, and it’s easier than it used to be for startups to get the attention of top talent, there’s still often a disconnect between what startup employees expect to make and what startups are able to pay. Startups are watching their burn rates closely, so it can be hard for them to close the candidates who want to optimize for cash compensation. Additionally, candidates are aware that exits may take longer to achieve than before, and they’re taking that elongated timeframe into account when deciding whether to join a startup.
WSJ Pro: What advantages do startups have over larger employers?
Ms. Illovsky: There will always be candidates who are attracted to startups because they have so much to offer. It can be hugely appealing to have the opportunity to work closely with a founder and have access to the board. Startup roles also often tend to be broader in scope and higher level than what might be possible at a bigger, more mature company.
And now on to the news...
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PHOTO: JOSH EDELSON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Return trip for Kustomer. When Meta Platforms closed a deal last year to acquire business-software provider Kustomer for $1 billion, the tech giant had high hopes for how it could integrate the services of the startup, WSJ Pro reports. Meta said the acquisition would enable companies to use its messaging apps for customer service, helping fulfill its longstanding ambition to turn its platforms into e-commerce giants.
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But a little over a year later, Meta is parting ways with Kustomer in a rare transaction where Meta is trading its ownership of Kustomer for a passive minority stake in the company with no guaranteed payment in return, according to people familiar with the matter.
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Meta is giving Redpoint Ventures, Battery Ventures and Boldstart Ventures stakes in the newly independent company in exchange for funding its continued operations, the people familiar with the matter said. Those three firms will jointly put $60 million of capital into Kustomer to cover its operating costs, according to the people. Meta will remain the single largest stakeholder in the new company but won’t have a seat on its board. The deal values Kustomer at $250 million.
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Shopify Sells Logistics Business to Flexport
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Flexport is buying Shopify’s logistics-fulfillment operations, including U.S. e-commerce platform Deliverr, setting up the freight company to add home-delivery services that would compete with Amazon.com for retailer business, The Wall Street Journal reports. Shopify is also selling its 6 River Systems warehouse robotics operation to U.K. automated grocery-fulfillment specialist Ocado Group. Shopify, a Canada-based online retail-services platform that has struggled to gain traction with the physical-delivery business, said it would lay off about 20% of its workforce after selling the operations.
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Crypto Firms Find a Way to Bank Without Banks
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Regulators’ warnings and a series of bank failures have caused some banks to step away from crypto clients. A handful of middlemen companies are helping keep the nascent industry banked, WSJ reports. Intermediary firms store cash on behalf of their clients in their own bank accounts or coordinate with banking partners to get accounts in clients’ names. While indirect banking isn’t unique to crypto, its importance has become more pronounced owing to the limited number of banks willing to work with digital-asset firms.
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Funds
European early-stage and growth investor HV Capital closed its ninth fund with €710 million (about $782 million) in commitments. The Germany-based firm said the new fund will be split into two vehicles, Fund IX Venture and Fund IX Growth, and will invest across all stages with initial ticket sizes of €500,000 to €60 million. HV Capital’s preceding fund launched in 2020 with €535 million.
Energy Impact Partners closed its Elevate Future Fund I LP with $111.9 million in commitments to focus on driving diversity in the energy ecosystem. With over $3 billion in assets under management, the firm invests globally across venture, growth, credit and infrastructure.
Brightspark Ventures held the first close of its Brightspark Canadian Opportunities Fund II with firm commitments of 75 million Canadian dollars (about $55 million) to continue focusing on pre-Series A investments in startups across Canada. The fund has a target of C$120 million and is expected to close by the end of the year. Brightspark Ventures’ first Canadian Opportunities Fund raised C$65 million in 2020.
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Redaptive, a Denver-based energy efficiency and sustainability company, picked up additional Series E funding from returning investor Linse Capital, bringing the round total to about $250 million. The company funds and installs energy-saving and energy-generating equipment across real estate portfolios.
Initial Therapeutics, a South San Francisco, Calif.-based startup focused on developing medicines that block difficult-to-drug protein targets, launched with $75 million in Series A funding from Apple Tree Partners.
Magenta Medical, an Israel-based miniature heart pump developer, nabbed a $55 million investment. OrbiMed led the funding, which included participation from New Enterprise Associates.
Healthy.io, developer of a smartphone-powered at-home kidney test, completed a $50 million Series D round from investors including Aleph. The company has offices in Boston, London and Tel Aviv.
ARTHEx Biotech, a Spain-based startup focused on developing medicines through the modulation of microRNAs, completed a €42 million (about $46 million) Series B round from investors including Hadean Ventures and Sound Bioventures.
Liquido, a payments startup serving Latin America, emerged from stealth and launched publicly with $26 million in funding from Index Ventures and others.
Polymateria, a London-based biodegradable plastic startup, landed £20 million (about $25 million) in Series B funding led by ABC Impact and Indorama Ventures. Sugandhi Matta, chief impact officer of ABC Impact, will join the board. Polymateria says it has invented a plastic that self-destructs safely without leaving any harmful traces in the environment.
Hygieia, a Livonia, Mich.-based insulin therapy startup, raised $22 million in Series B funding led by Firstime Ventures.
OpenEnvoy, an accounts payable automation provider, secured slightly more than $15 million in Series A financing led by RRE Ventures.
Range, a McLean, Va.-based wealth management startup, raised $12 million in Series A funding. Gradient Ventures led the round, with General Partner Darian Shirazi joining the company’s board.
Aiden Technologies, a McKinney, Texas-based provider of software packaging and deployment for Microsoft Windows, added $4.5 million in seed funding co-led by Right Side Capital Management and Blu Venture Investors.
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Editor’s Note: Each week, we will share selections from WSJ Pro that provide insight and analysis we hope are useful to you. The stories are unlocked for The Wall Street Journal subscribers.
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Supply Chains Have Changed Forever
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Nearshoring. Automation. Supplier diversification. Sustainability. WSJ Pro takes a closer look at how companies are reshaping their logistics.
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PHOTO: UNIVERSAL PICTURES /COURTESY EVERETT COLLECTION
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