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Two Exits in a Day for This VC
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By Yuliya Chernova, WSJ Pro
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Good day. For Matt Murphy, partner at Menlo Ventures, Tuesday was a good day. Two companies that he backed years ago while a general partner at Kleiner Perkins announced deals that would return money to their investors.
These deals illustrate that there is an appetite for business software companies from acquirers. They also show that an exit can take a long time and that prices paid are far from stratospheric.
Egnyte, whose software helps businesses manage content, said it received a majority investment from private-equity firms GI Partners and TA Associates. The deal valued the Mountain View, Calif.-based company at more than $1.5 billion, including cash on the balance sheet, according to a person familiar with the situation. Existing investors such as Spingcoast Capital Partners, GV, Polaris Partners and Kleiner Perkins retained stakes in the company, Egnyte said in the announcement. An Egnyte representative declined to disclose the financial details of the deal.
Murphy said he first invested in Egnyte in 2011, leading the company’s Series B round at a pre-money valuation of about $40 million on behalf of Kleiner. Murphy has been on Egnyte’s board since then. He said the new investment from the private-equity firms generates a more than 10-times return for many venture investors in the company.
“This was a great liquidity event and allowed investors to roll some forward for a future IPO,” Murphy said.
Meanwhile, IBM announced plans to acquire DataStax, a provider of tools for building AI applications, and yet another company Murphy backed when he was at Kleiner. Murphy said he first invested in DataStax in 2014. The value of the IBM deal wasn’t announced. Menlo isn’t an investor in DataStax or Egnyte.
While Murphy said he’s thrilled about the deals, he noted that the exit picture today doesn’t justify the frenzied pace of investments in early stage artificial intelligence companies at high valuations.
“I spent over 10 years on each of these companies and neither was a $2 billion exit, so what is everyone thinking when they’re investing in early companies at $1 billion or $2 billion?” Murphy said. “The way people are investing is assuming that every company they invest in will be an outlier, and that’s a dangerous game,” he added.
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And now on to the news...
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Quantum Machines founders, from left to right, Nissim Ofek, Itamar Sivan and Yonatan Cohen. PHOTO: ILYA MELNIKOV, HAARETZ
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Fifth largest quantum deal. Quantum Machines, an Israeli quantum computing startup, raised $170 million in a Series C round, bringing total funding to date to $280 million, The Wall Street Journal reports.
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The raise, the fifth-largest ever for a quantum computing company according to data provider PitchBook Data, comes amid growing excitement for quantum computing in the wake of hardware advancements announced by Microsoft and Google. The largest was a $624.6 million investment into PsiQuantum in 2024, according to PitchBook.
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“Investors understand that at the end of the day, if you can bring a new paradigm of computing, that’s probably the biggest potential one can think of,” said Quantum Machines co-founder and Chief Executive Itamar Sivan. “There’s nothing that’s driving the industry and the economy more than computing in the last hundred years.”
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45%
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The decline in sales of Tesla cars in Europe in January compared with a year earlier.
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German Startup Publishes Open-Source Plans for Nuclear-Fusion Power Plant
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A German startup has published plans for a commercial nuclear-fusion plant, in what scientists are touting as an important breakthrough in making the energy that fuels stars a viable source of sustainable clean power here on earth, WSJ Pro reports.
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Proxima Fusion, which was spun out of the Max Planck Institute for Plasma Physics, in Munich, published its design in the journal Fusion Engineering and Design. Its plans for what it calls a Stellarator are being heralded as a milestone in what could eventually become a working fusion power plant, which physicists have long touted as a holy grail for clean energy supply.
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He Left CNN to Start a Newsletter. It’s Now a Must-Read.
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Oliver Darcy left CNN, one of the most recognized news outlets in the world, to start a newsletter. It has quickly become a must-read for the power brokers of publishing and entertainment, WSJ reports.
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Darcy’s newsletter, Status, which launched in August, is fueled by juicy tidbits about media deals, newsroom spats and executive moves. He was first to report that then-New York Magazine correspondent Olivia Nuzzi had a romantic relationship with Robert F. Kennedy Jr., and that ABC News was going to re-sign anchor George Stephanopoulos last fall.
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Status has accumulated more than 70,000 total subscribers since August and is on track to surpass $1 million in annual recurring revenue by the end of 2025. Darcy declined to comment on how many subscribers are paying members.
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Funds
Growth-stage investor Camber Partners closed its second fund at $210 million, surpassing the original target of $150 million and a hard cap of $200 million.
People
Norwest Venture Partners promoted Irem Rami, Scott Mitchell and Chris Scullin to partner; Connor Pike and Chris Sondej to principal; and Suraj Shah to vice president.
Browser security startup SquareX appointed John Carse as field chief information security officer. He was most recently CISO at Dyson.
Nuclear energy startup Deep Fission hired Stuart Lacey as chief AI officer.
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Together AI, a San Francisco-based startup whose decentralized cloud services enable developers and researchers to train and deploy generative AI models, scored a $305 million Series B round, valuing the company at $3.3 billion. Investors included General Catalyst and Prosperity7 Ventures.
Bitwise Asset Management, a San Francisco-based crypto asset trading startup, landed a $70 million investment led by Electric Capital.
Metronome, a San Francisco-headquartered usage-based billing platform, scored $50 million in Series C funding led by New Enterprise Associates.
Perfect, an agentic AI platform for recruitment, has raised $23 million in total seed funding, with the latest round led by Hanaco Ventures.
Bridgetown Research, a Seattle-based startup building AI agents for decision research, secured $19 million in Series A financing led by Lightspeed and Accel.
Unit Network, a New York-based digital assets company, raised $18 million in a round led by firms including the Blockchain Founders Fund and Outlier Ventures.
Goose, a Chicago-based startup developing an operating system for pet care providers, picked up $13.4 million in seed funding from investors including B Capital and First Round Capital.
Vayu, an Israel-based billing and revenue management platform for business-to-business tech companies, was seeded with a $7 million investment co-led by Flint Capital and The Garage.
Vidyut, an India-based electric vehicle platform, grabbed a $2.5 million investment from Flourish Ventures.
Memes Lab, a platform for the creation, trading and distribution of memecoins, closed a $2.3 million seed investment led by Lemniscap.
Opal, a startup that automates back-office operations for ad agencies, raised $1.5 million in pre-seed funding led by Founders’ Co-op.
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Health and Human Services Secretary Robert F. Kennedy Jr., left, and Commerce Secretary Howard Lutnick joined President Trump in the Oval Office on Tuesday. PHOTO: JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES
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