Good day. Two years ago Industry Ventures predicted a surge of deals in 2023 in the venture capital secondary market. That estimate didn’t come to pass, said Hans Swildens, chief executive and founder of Industry Ventures, a large player in the secondaries market. But the market, which includes resales of startup equity and venture-fund stakes, is improving now, he said.

The secondary market took a dip in 2022 because sellers and buyers couldn’t agree on price during the start of the market downturn, Swildens said. Industry Ventures had originally anticipated that issue would be resolved by 2023, and put out a forecast for a rise in deals. But the issue wasn't resolved, he said.

“We were off on our 2023 estimate, as there was still a bid/ask spread that lingered from 2022, but now we’re getting more volume done,” Swildens said.

Prices are changing. Last year, secondary buyers paid on average a discount of 40% to 60% on venture funds’ net asset value, for example, Swildens said. This year’s discounts are about 30% to 45% off, he said. Net asset value refers to the value of all the holdings of a fund on a net basis.

“The main difference is just the funds wrote down their NAV,” he said.

The markdowns have been happening gradually over the past couple of years. “It was bleeding out versus one big correction,” Swildens said.

Venture fund values are now more in line with public comparables and M&A exits, he said, though he still expects to see some readjustments.

Overall, Industry Ventures now estimates that the total amount of secondary venture deals will come in at about $105 billion this year.

And now on to the news ...

Fresh AI-focused fund. Fika Ventures has raised a $160 million fourth fund as investors continue seeking exposure to artificial intelligence, the cornerstone technology for the venture firm’s portfolio companies, WSJ Pro reports.

• Los Angeles-based Fika will make investments in sectors including fintech, supply chain and logistics, manufacturing, healthcare and enterprise software. Co-founder TX Zhuo said all the companies the firm backs seize on the latest advancements in artificial intelligence, including generative AI.
   
• “We wouldn’t invest in a company without an AI strategy because we think that’s very important in today’s world,” Zhuo said. “But at the same time, we wouldn’t want to exclude a company where AI wasn’t its core business.”

Demand for nuclear energy is rising fast. Whether there are enough new recruits to keep the industry humming is another question, WSJ Pro reports. Between 2012 and 2022, the number of students graduating with bachelor’s degrees in nuclear engineering in the U.S. fell by 25%, according to the Oak Ridge Institute for Science and Education. “We need nuclear expertise in order to combat climate change,” said Sara Pozzi, professor of nuclear engineering and radiological sciences at the University of Michigan. “We are at a crucial point where we need to produce the new generation of nuclear experts so that they can work with the older generation and learn from them.”

AI is about to make the cloud a lot heavier.

Cloud services and private networks for years had to handle relatively limited amounts of data. Now that artificial intelligence and deep learning are driving vast quantities of photos, video, sound and natural language into the mix, however, data that was once counted in gigabytes and terabytes is measured in much larger units of petabytes and exabytes.

Information systems, including the cloud, must expand to store all of that data. Less obvious—and more interesting—is the need to access all of that information at much higher speed and, critically, lower operating cost.

Some companies have already begun trying to develop the next generation of infrastructure.

Read the full column.

Funds

New York-based growth equity firm Alpha Partners closed its third fund with $153 million in commitments to continue making investments in the $3 million to $15 million range.

People

Bessemer Venture Partners promoted Aia Sarycheva to vice president, where she primarily focuses on early-stage investments in artificial intelligence and B2B cloud software. Prior to Bessemer, she was at Revolution's Rise of the Rest Fund.

Cloud networking company Aviatrix appointed John Qian as chief information security officer. He was previously head of security architecture at Zoom.

Exits

Data infrastructure company Confluent acquired WarpStream, a data streaming platform, for an undisclosed amount.

Glean, a Palo Alto, Calif.-based startup helping to securely deploy generative AI in the enterprise, raised more than $260 million in Series E funding co-led by Altimeter and DST Global at a $4.6 billion valuation.

Forterra, a Clarksburg, Md.-based self-driving technology provider, scored a $75 million Series B round led by Moore Strategic Ventures, XYZ and Hedosophia.

Quantum Source, an Israel-based startup developing technology for photonic quantum computers, secured $50 million in Series A financing led by Eclipse.

Smartcat, an AI translation platform, landed $43 million in Series C funding. Left Lane Capital led the round, with Managing Partner Vinny Pujji joining the company’s board.

Spare, a Vancouver-based startup providing transit agencies with technology focused on ADA-paratransit systems and microtransit services, completed a 42 million Canadian dollar Series B round led by Inovia Capital.

AttoTude, a Menlo Park, Calif.-based developer of interconnection technologies for AI and hyperscale data center applications, closed a $29 million Series A round from investors including Wing VC, Sutter Hill Ventures and Canaan Partners. Wing’s Peter Wagner will join the board.

Elum Energy, a Paris-based provider of energy management technology for renewable energy systems, collected $13 million in Series B funding led by Energize Capital.

StackGen, a San Francisco-based generative infrastructure from code startup, was seeded with a $12.3 million investment led by Thomvest Ventures. The company, which was previously known as appCD, also appointed Arshad Sayyad as chief business officer.

Protege, a New York-based provider of an AI training data platform, collected $10 million in seed funding led by CRV.

Illuma Labs, a Plano, Texas-based provider of voice authentication technology for banking contact centers, grabbed $9 million in Series A funding led by LiveOak Ventures.

AudiencePlus, a Phoenix-based business-to-business marketing technology provider, closed a $7 million funding round led by Emergence Capital, High Alpha and PHX Ventures. Santi Subotovsky, general partner at Emergence Capital, will join the company’s board.

• The college dropout who invested billions to cozy up with Elon Musk

• After EVs, China seeks to dominate AI-powered autonomous driving

• It’s the airplane of the future. It’s still grounded.

• Oracle’s missteps in cloud computing are paying dividends in AI

• EU top court upholds $2.7 billion fine against Google over search results

• Lumen Technologies bets on AI deals to turn its finances around

• AirPods will soon be hearing aids—and more from Apple’s new AirPod lineup

• Saudi fintech acquisition by Tabby sparks new hopes for VCs (Bloomberg)
   
• Drybaby is a dating app for the ‘sober curious’ movement (TechCrunch)
   
• 44 of the most promising AI startups of 2024, according to top VCs (Business Insider)

This newsletter was compiled by Matthew Strozier 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.

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