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What Would Spur More Startups to Test Public Markets?
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By Yuliya Chernova, WSJ Pro
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Good day. The shares of cybersecurity company Rubrik jumped in their debut on the public markets Thursday. For our question of the week, we would like to hear from you what's keeping other companies back from testing the public markets and what would need to happen for the dam to break? Email responses to vcnews@wsj.com.
Last week, we asked about changes in startup hubs that are either resulting in more investment or, conversely, making it harder for startups to thrive in those hubs. Here are edited and condensed excerpts from some responses.
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Nicole LeBlanc, partner at Woven Capital: In Europe, sustainability regulations are driving many corporations to accelerate and implement new processes and technologies to ensure compliance. As an investor, our pipeline within Europe has significantly transitioned to include many circular economy and sustainability startups. These startups are able to get pilots with big brands due to this new market need, enabling them to scale faster than we've seen in other market segments.
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Murat Bicer, general partner at CRV: Over the past year or two, the pendulum swung back to the Bay Area, due in large part to AI. Established players like Y Combinator left Mountain View for SF. And new kids on the block, including Anthropic and OpenAI, are also making their presence known in the city. A number of the stealth AI investments we’ve made are setting up shop along the Peninsula, forgoing the city grit for green space and square footage. The current state of the world and an emphasis on defense tech are resulting in a burgeoning cybersecurity landscape that has unlocked many overseas markets, as well as different metro areas in the U.S., including Washington, D.C.
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Kelly Ford, general partner and chief operating officer of Edison Partners: Our view is that there’s nowhere in the country that matches the combination of entrepreneurial momentum and attractive economic characteristics of Nashville and the Southeast. We announced our new Nashville office earlier this month. Half our firm has moved or is moving there, including some of our most senior investors, and we plan for significant hiring in 2025. Nashville and the state of Tennessee combine a compelling ecosystem of businesses in healthcare, financial services and supply chain and logistics, excellent local universities graduating talent who appreciate the area's live-work-play benefits, and business-friendly policy.
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And now on to the news...
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Rubrik co-founder and Chief Executive Bipul Sinha waves a flag as employees cheer during the company’s IPO at the New York Stock Exchange. PHOTO: BRENDAN MCDERMID/REUTERS
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Analysis: Rubrik IPO reflects increasingly difficult path startups face to going public. Shares of cybersecurity startup Rubrik rose on their first day of trading, reflecting how the IPO market for enterprise software startups has started to come back to life, but only for a limited group of companies, The Wall Street Journal's Steven Rosenbush writes. The market is far more demanding than before 2022, when the Federal Reserve began raising interest rates, ending a long period of ultracheap capital. There have been only a few tech initial public offerings recently, including software automation platform Klaviyo in September 2023.
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23.9%
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The percentage of Rubrik shares Lightspeed Venture Partners owned before the IPO, according to company filings.
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What Is TikTok Worth? Some Say $20 Billion, Others Say $100 Billion
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Now that President Biden has signed legislation forcing the sale of TikTok’s U.S. operations, any potential deal raises a big question: How much is the popular video-sharing app worth? Those asking have some huge—and widely varying—numbers to consider, The Wall Street Journal reports. One suitor has suggested $20 billion as a starting price for the U.S. operations. Executives at TikTok parent ByteDance have previously considered TikTok’s global operations to be worth about half of the Chinese company’s overall value, which would put it above $100 billion, according to people familiar with the matter. Settling on the exact value will be difficult because the tech industry has never seen a sale like this
before, and there are several unknowns.
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BlackRock-Temasek Venture Raises $1.4 Billion for Clean-Energy Bets
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A joint venture of giant asset manager BlackRock and Singapore’s Temasek Holdings has amassed $1.4 billion to back young businesses whose products and services help reduce carbon emissions, WSJ Pro reports. The New York-based firm and Temasek said the venture wrapped up Decarbonization Partners Fund I above an initial $1 billion goal. The fund is the first vehicle raised by the venture, Decarbonization Partners, to make growth investments in developers of viable clean-energy technologies that are poised to expand. The partnership has backed seven businesses so far through the new fund, investing in areas such as hydrogen, energy storage and low-carbon materials.
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Fed Chair Jerome Powell has dialed back expectations on interest-rate cuts.
PHOTO: SAMUEL CORUM/BLOOMBERG NEWS
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The dream of Fed rate cuts is slipping away. Thursday’s report on economic activity delivered the latest in a series of rude awakenings to investors and Federal Reserve policymakers who have held their breath in anticipation that lower inflation would allow interest-rate cuts to begin in earnest this summer, WSJ reports. Instead, Commerce Department data showed that, for the third straight month, inflation was proving stickier than expected after an immaculate cooling in the second half of last year.
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Funds
Venture-capital and growth-equity investor Norwest Venture Partners closed its seventeenth fund at $3 billion to continue backing enterprise, consumer and healthcare startups. The Menlo Park, Calif.-headquartered firm, which raised the same amount for its preceding fund, now has a total of $15.5 billion in capital under management.
People
BLCK VC, whose mission is to empower and advance Black venture investors, said Kareema Thomas joined as chief of staff. She was previously at SAP.iO, Google, GitHub, HashiCorp and Vercel.
Anzu Partners, which focuses on industrial and life science technology investments, promoted Patrick Harrington, Kyle McQuighan and Wendy Papakostandini to principal.
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Tines, a workflow automation platform with headquarters in Dublin and Boston, added $50 million in Series B funding led by Accel and Felicis.
Cerevance, a developer of novel therapeutics for central nervous system diseases, held the initial close of its $47 million Series B1 extension round. Investors including Agent Capital and Bioluminescence Ventures contributed to the new funding, which will bring the Series B1 total to $98 million. Campbell Murray of Agent Capital and Kouki Harasaki of Bioluminescence Ventures joined the Cerevance board.
Nagomi Security, a New York-headquartered proactive security and threat exposure management provider, emerged from stealth with $30 million in funding, including a recent $23 million Series A round led by TCV. Morgan Gerlak, partner at TCV, is joining Nagomi’s board.
Nooks, a San Francisco-based startup bringing artificial intelligence tools to sales teams prospecting over the phone, secured $22 million in Series A financing. Lachy Groom led the round, which included participation from Tola Capital.
Sublime Security, a Washington D.C.-based email security platform, raised $20 million in Series A funding led by Index Ventures.
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The FCC’s new rules would affect a range of internet-service providers, including cable companies and mobile carriers. PHOTO: PATRICK T. FALLON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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