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Venture Investors Warm to Public-Safety and Law-Enforcement Tech
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By Marc Vartabedian, WSJ Pro
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Good day. Venture capitalists have made a flurry of bets on public-safety and law-enforcement technology startups this year, the latest sign of a shifting appetite toward companies that rely on government revenue.
Venture firms, including industry leaders Sequoia Capital and Andreessen Horowitz, have invested in tech ranging from artificial-intelligence voice chatbots that handle nonemergency 911 calls to analytics software that helps detectives solve cold cases. The deals propelled the sector’s overall U.S. funding haul to $990 million this year through July 9, nearly double the amount raised for all of last year, according to data firm Crunchbase.
Investors and entrepreneurs have long viewed plodding government sales cycles as incompatible with the hypergrowth many startups seek. But that’s changing. As AI supercharges the startups’ tech and lowers the cost of developing new products, founders say public-safety agencies are more eager and amenable to doing business with them.
Investors, in turn, are warming to young companies that rely on government sales. The recent success of defense-tech startups—many of them powered by AI—has demonstrated that startups with government-reliant revenue models can make it.
“The ‘Why now’ is AI,” said Nihal Mehta, co-founder and general partner of Eniac Ventures.
Read the full article here.
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And now on to the news ...
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President Trump raised the idea of a U.S. sovereign-wealth fund while campaigning for his second term. PHOTO: JIM LO SCALZO/EPA/SHUTTERSTOCK/SHUTTERSTOCK
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Japanese investment. President Trump has long wanted a U.S. sovereign-wealth fund that would give him free rein to make big investments in key sectors. Japan could help him get the next best thing.
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As part of a new trade deal, Japan agreed to invest $550 billion in projects across strategic U.S. industries, including energy, semiconductor manufacturing and shipbuilding.
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The White House said Trump would have final say over where the money goes and that the U.S. would keep 90% of profits on any investments. One Trump official said the administration was thinking of the arrangement like a sovereign-wealth fund that Japan is funding. The money will take the form of equity, loans and loan guarantees and come from the Japanese government, not private companies, said Sen. Bill Hagerty (R., Tenn.), who met Thursday with a Japanese delegation.
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He said the deal doesn’t include any private-sector commitments already made, such as the Japanese investment-firm SoftBank’s pledge to back an up to $500 billion artificial-intelligence project known as “Stargate.” “This is separate from all of that,” said Hagerty, who was ambassador to Japan in Trump’s first term. “This is a Japanese government commitment.”
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$550 Billion
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The amount Japan agreed to invest in projects across strategic U.S. industries as part of a new trade deal.
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Private Credit and Wealth Strategies Boost Blackstone’s Growth
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Blackstone is betting its private-credit strategies and funds tailored to wealthy investors will continue to boost its earnings, as the asset manager reported strong returns for this year’s second quarter. During a Thursday analyst call to discuss the results, Blackstone’s leaders highlighted the fast expansion in the assets the New York-based firm manages across credit and insurance strategies, which as of June 30 totaled about $407.3 billion, a 23% increase from a year earlier. That made credit and insurance the fastest-growing of Blackstone’s four broad investment segments, which also include real estate, private equity and multiasset investing.
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Funds
Healthcare-focused Omega Funds closed its eighth fund with $647 million in commitments, exceeding the original $600 million target, to continue backing startups focusing on severe, unmet medical needs.
People
Cybersecurity-focused investor Ballistic Ventures said David Schellhase joined the firm as an entrepreneur in residence.
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HeroDevs, a provider of security and compliance solutions for deprecated open-source software, secured a $125 million strategic growth investment. PSG led the funding, which included participation from Album.
LegalOn Technologies, a legal AI startup with headquarters in San Francisco and Tokyo, scored $50 million in Series E funding led by the growth equity business within Goldman Sachs Alternatives.
Swift Navigation, a San Francisco-based provider of positioning technology for vehicle autonomy, robotics and precision logistics, completed a $50 million Series E round led by Crosslink Capital.
Daylight Security, an agentic security services provider based in New York and Tel Aviv, was seeded with a $7 million investment led by Bain Capital Ventures.
Drizz, an India-based startup using AI for mobile app testing, launched from stealth with $2.7 million in seed funding led by Stellaris Venture Partners and Shastra VC.
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In response to a U.S. government report, Microsoft pledged to rededicate itself to protecting itself and its customers from bad actors. PHOTO: ADAM GRAY/BLOOMBERG NEWS
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Silicon Valley startups are embracing China’s controversial ‘996’ work schedule (Wired)
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What role should oil and gas companies play in climate tech? (MIT Technology Review)
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AI may be the future, but first it has to study ancient Roman history (New York Times)
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Trump’s AI plan calls for massive data centers. Here’s how it may affect energy in the U.S. (Associated Press)
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