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Midsize Funds Might Close Out the Year Strong
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By Marc Vartabedian, WSJ Pro
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Good day. Midsize funds are on the march.
A smattering of venture funds in this size category has emerged in the last couple of months—a welcome development for an asset class stuck in the fundraising limbo of the past several years.
There were just 56 U.S.-based funds that raised between $100 million and $250 million in the first three quarters of the year, according to analytics firm PitchBook Data. There were 82 such funds raised during all of last year and a record 191 in 2021.
But anecdotally, there's been an uptick of activity in the current quarter.
On Friday, WSJ Pro VC reported that Victor Lazarte, a former general partner at venture firm Benchmark, was wrapping up fundraising for a debut solo fund with about $200 million in commitments. The new fund’s target was reported to be $180 million, with a hard cap of $215 million.
Also this month, LegalTech Fund, a venture firm that exclusively invests in legal technology companies, said it closed its second fund, a $110 million vehicle; and Glasswing Ventures, which targets seed and pre-seed enterprise artificial-intelligence and cybersecurity startups, said it closed its third fund, a $203 million vehicle.
The fundraises add to the $8.9 billion that midsize U.S. funds raised through the third quarter. Don’t be surprised if by year’s end fundraising eclipses 2024’s $11.6 billion total for this category.
It would be a small, but much-needed, win for venture fundraising.
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And now on to the news...
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The San Francisco skyline. PHOTO: ERIC RISBERG/ASSOCIATED PRESS
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New fund. Victor Lazarte, a former general partner at venture firm Benchmark, is wrapping up fundraising for a debut venture fund, overcoming a tough market for new firms.
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The fund, called VL Fund, has received about $200 million in commitments, said a person familiar with the raise. The new fund’s target was $180 million, with a hard cap of $215 million, according to another person.
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Lazarte is the solo general partner at VL Fund. He didn’t respond to a request for comment.
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68
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Number of debut funds that were raised in the first three quarters of this year in the U.S., according to a PitchBook-NVCA Venture Monitor report. Last year, 183 debut venture funds were raised.
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It Was Supposed to Be Crypto’s Year. Then Came the Crash.
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This was supposed to be crypto’s year. There was a perfect storm of a crypto-loving White House, Wall Street adoption and friendly legislation that put a close to more than a decade of antagonistic U.S. regulation and prosecutions. But the crypto market turmoil only intensified last week, with bitcoin shedding more than 10% and over $10,000 in value. In the 24 hours leading up to Friday morning, more than $2 billion worth of leveraged crypto trades were liquidated, pushing bitcoin below $81,000, according to data from CoinGlass. The largest cryptocurrency is now on track for its worst monthly performance since June 2022, when the collapse of crypto lender Celsius Network plunged the market into what
became known as its crypto winter.
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A New Prediction-Market Startup Is Taking On Polymarket and Kalshi
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A team of prediction-market veterans is launching a new platform that will underpin bets on future outcomes in politics, sports, culture and other areas. The Clearing Co., a San Francisco-based startup, says it differs from competitors because it will focus on providing the underlying plumbing to process bets, instead of building its own website and app to reach individual users. Potentially, brokerages could plug into Clearing’s technology to offer access to prediction markets alongside stocks, cryptocurrencies and other trades.
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DAISY KORPICS/WSJ, ISTOCK (2)
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Investors clamor for a peek behind the private markets curtain. Selling data on private equity and private credit is becoming big business on Wall Street. In a market where opacity is the whole point, it is also a tricky feat.
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People
People.ai, an AI data platform for sales teams, promoted Natalie Wolf to chief customer officer, and appointed Kimberly Gordon as senior vice president of marketing.
Arbital Health, a startup providing critical infrastructure to manage risk-based contracts, appointed Stephanie Gutendorf as chief commercial officer. She most recently led growth at Interwell Health.
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Numeric, a San Francisco-based accounting automation platform, scored $51 million in Series B funding. IVP led the investment, which included contributions from Menlo Ventures, Friends & Family Capital, Long Journey Ventures and others.
Sorcero, a Washington, D.C.-based intelligence platform for life sciences, secured $42.5 million in Series B financing led by NewSpring Capital's dedicated growth equity strategy.
Twenty, an Arlington, Va.-based startup developing cyber warfare systems, emerged from stealth with $38 million in funding from investors including Caffeinated Capital, General Catalyst and In-Q-Tel.
Stuut Technologies, a New York-based startup that automates accounts receivable work for businesses, grabbed $29.5 million in Series A funding. Andreessen Horowitz led the round, which saw participation from Activant Capital, Khosla Ventures and others. Seema Amble from Andreessen Horowitz and Steve Sarracino from Activant Capital will join the company’s board.
Method Security, a cybersecurity startup headquartered in New York and Washington, D.C., landed $26 million in combined seed and Series A funding led by Andreessen Horowitz and General Catalyst.
Nest Health, a New Orleans-based healthcare provider built for families, raised over $22.5 million in Series A funding from investors including Amboy Street Ventures.
Tidalwave, a New York-based agentic AI mortgage point-of-sale platform, picked up a $22 million Series A round. Permanent Capital led the investment, which included participation from Engineering Capital. Jason Duboe, managing partner of Permanent Capital, joined the board.
Modern Life, a New York-based AI-powered life insurance brokerage, collected $20 million in Series A funding. Thrive Capital led the round, which included additional support from New York Life Ventures and Northwestern Mutual Future Ventures.
HelloTrade, a blockchain-powered trading platform, completed a $4.6 million seed round led by Dragonfly Capital.
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AMD Chief Executive Lisa Su. PHOTO: JORDAN VONDERHAAR FOR WSJ
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