Layoffs at Convoy, sleepless in Singapore, and the case for embracing down rounds

Stocks fell sharply during today's regular session, with the S&P 500 and Nasdaq Composite each falling more than 2%. The Dow closed down more than 600 points, losing roughly 400 points during a rough final hour of trading on Wall Street. 

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Media outfits reported earlier this week that the crypto lending platform BlockFi is looking to raise roughly $100 million in fresh funding in a round that would value the company at about $1 billion. Very notably, when BlockFi last raised money from investors -- $350 million in March of last year -- the investors assigned the company a $3 billion valuation.

That's a pretty breathtaking drop, and in the world of venture-backed startups, where everyone feels compelled at all times to be "killing it," the price adjustment could be construed as a black mark against the company.

It may be the smartest play, however. Many companies are now facing a Hobson's choice between trying to maintain the high-flying valuation they've established over the last year -- no matter the contortions necessary to do it -- or conducting a "down round," a financing that results in a lower valuation. And industry experts suggest the latter often makes more sense.

Brad Feld, who has been a venture capitalist for more than 20 years, is among those who advocate for embracing the down round in cases where a company needs capital and hasn't yet grown into a previously established valuation. Feld says that he has participated in financing rounds for startups so married to a particular number that they've agreed to anything to maintain it. He has also participated in deals where the company and its board agreed to bite the bullet and readjust the company's valuation downward.

Based on both experiences, he says his "strong belief" that "just doing a clean resetting -- at whatever the valuation so that everybody is aligned and dealing with reality -- is much, much better for a company."

He's not alone. "Sadly, I've been too long in this industry to see the problems that come with those terms," says Frederic Court, founder of the early-stage firm Felix Capital in London. "As a young investor in the early 2000s, I ended up spending a lot of time restructuring cap tables" after the dot com bust and he learned then that "trying to readjust things or maintain an artificially inflated price through structure is a recipe for disaster."

The Best-Laid Plans . . .

Down rounds are no one's preferred starting point. In the roughly three months since the winds shifted in the startup market, the messaging to startups has been to reduce burn and do it quickly by laying off employees, shelving projects, freezing research and development, and slashing other expenses to become more self-sustaining.

Still, after years of chasing growth, many startups won't be able to shift gears fast enough. They'll need to raise more capital, and while the strongest startups might continue to do so with few strings attached, others will face two options: raise more money at the same valuation but also more "structure," in VC parlance, or start over from a valuation standpoint.

Right now, says Lauren Kolodny, a co-founder of the Bay Area venture firm Acrew Capital, a lot of teams both inside and outside of Acrew's portfolio are agreeing to more structured "flat and extension rounds -- that's the most common thing we're seeing at this moment." Because so many Series A- and Series B-stage companies raised rounds at rich valuations with little in the way of product-market fit, "they might have fundamentals and be doing well," she adds, "but they haven't had the opportunity to grow into those valuations," which is leading them to have "harder conversations about more punitive rounds."

More here.

Backbase, a 19-year-old Amsterdam startup that helps banks mine customer data in order to provide more personalized features and services, raised a €120 million round from Motive Partners (solely). TechCrunch has more here.

Ever/Body, a four-year-old New York startup that has created a cosmetic dermatology training program for providers, raised a $55.5 million Series C round led by Addition, with additional funds provided by Tiger Global, ACME Capital, Declaration Capital, Fifth Wall Ventures, and Imaginary Ventures. Fortune has more here.

HYCU, a four-year-old Boston startup that offers software designed to protect data across multi-cloud and hybrid cloud environments, raised a $53 million Series B round led by Acrew Capital; Bain Capital Ventures, Atlassian Ventures, and Cisco Investments also chipped in. The company has raised a total of $140.5 million. TechCrunch has more here.

Middesk, a four-year-old San Francisco startup whose platform automates business verification and underwriting decisions for its corporate clients such as Plaid, Affirm, Bluevine, Pipe, and Novo, raised a $57 million Series B funding co-led by Insight Partners and Canapi Ventures, with additional participation from Sequoia Capital, Accel, and Gaingels. The company has raised a total of $77 million. TechCrunch has more here.

Mineralys Therapeutics, a two-year-old startup based in Radnor, Pa., that is shepherding a new hypertension drug through clinical trials, raised a $118 million Series B round co-led by RA Capital and Andera Partners. Also participating were RTW Investments, Rock Springs Capital, SR One, Sectoral Asset Management, Ysios Capital, HealthCor Management, Boulder Ventures, and previous investors Catalys Pacific, Samsara BioCapital, HBM Healthcare Investments, and Adams Street Partners. The company has raised a total of $162 million. FierceBiotech has more here.

OhmConnect, a nine-year-old San Francisco startup whose platform is used by utilities to incentivize customers to reduce their electricity use, raised a $55 million Series D co-led by ClearSky, Sidewalk Infrastructure Partners, and TELUS Ventures. Previous investors City Light Capital and Elemental Excelerator also contributed to the deal, along with new investors Japan Energy Fund, SunPower, and Carrier. The company has raised approximately $100 million. Canary Media has more here.

Recover, an "ethical fashion" startup based in Madrid that provides recycled fiber to retailers such as Zara's parent company, raised a $100 million round that values the Spanish company at about $1.1 billion, according to WSJ. The lead was Goldman Sachs, while majority shareholder Story3 Capital Partners also participated. More here.

Shield AI, a seven-year-old San Diego startup that makes software and hardware for drones and other autonomous aircraft used by military and other government organizations, raised a $90 million Series E at a $2.3 billion valuation, as well as $75 million in debt. The deal lead was Snowpoint Ventures, with additional funds provided by Riot Ventures and previous investors Disruptive and Homebrew. Per Crunchbase, the company has now raised a total of $513.1 million. TechCrunch has more here.

Continual, a three-year-old San Francisco startup that says its AI enables its customers to create predictive models for inventory forecasts, risk mitigation, and supply chain logistics, has raised $14.5 million in Series A funding. Innovation Endeavors led the round, joined by Amplify Partners, Illuminate Ventures, Inspired Capital, Data Community Fund, Activation, New Normal, GTMfund, Dremio founder Tomer Shiran, and dbt Labs founder Tristan Handy. The company has raised a total of $18.5 million. TechCrunch has more here.

Cryptio, a four-year-old Paris startup that makes crypto accounting software, raised a $10 million Series A round led by Point Nine, with BlueYard, Alven, Coinshares, Avantgarde Finance, Protocol Labs, and Draper Associates also pitching in. The company has raised a total of $11.2 million. Tech.eu has more here.

Degron Therapeutics, a year-old, Shanghai startup that says its drug discovery platform has already yielded several preclinical candidates in disease areas including targeting cancer, inflammatory diseases, and rare diseases, raised a $22 million Series A led by Med-Fine Capital, with additional funds supplied by Dyee Capital, Baidu Venture, NeuX Capital, CO-WIN Ventures, and Yuanbio VC. More here.

Finch, a two-year-old San Francisco startup that builds APIs to connect corporate payroll, HR, and benefits systems, raised a $15 million Series A led by Menlo Ventures; General Catalyst, Bedrock, Sempervirens, and Y Combinator also participated. The company has raised a total of $18.6 million. TechCrunch has more here.

Ion Storage Systems, a seven-year-old startup based in Beltsville, Md., that manufactures high energy density, solid state lithium metal batteries, raised a $30 million Series A. Investors included Toyota Ventures, Tenaska, and Bangchak Corp. The company has raised a total of $52.5 million. More here.

Papercup, a five-year-old London startup that uses natural language processing to dub videos for clients such as Sky News, Discovery, and Business Insider, raised a $20 million Series A led by Octopus Ventures, with Local Globe, Sands Capital, Sky and Guardian Media Ventures, Entrepreneur First, and BDMI also participating. TechCrunch has more here.

Peptone, a six-year-old London drug discovery platform focusing on disordered proteins, raised a $40 million Series A round co-led by F-Prime Capital and Bessemer Venture Partners, with additional capital provided by Walden Catalyst Ventures, Hoxton Ventures, and Novartis' dRX Capital. Fortune has more here.

SCiFi Foods, a three-year-old San Francisco startup that is combining plant-based and cultivated meat technology to create its first burger product, raised a $22 million Series A round led by Andreessen Horowitz. The company has raised a total of $29 million. TechCrunch has more here.

Sensel, a nine-year-old, Bay Area-based trackpad startup, has raised $18.8 million in Series B funding led by Global Lighting Technologies, with participation from Lenovo. The company has now raised $57 million altogether. TechCrunch has more here.

Skolem Technologies, a two-year-old San Francisco startup that aims to provide the strict risk and reporting requirements that institutions require in order to access crypto markets, raised a $20 million Series A led by Galaxy Digital; Point72 Ventures, Jump Crypto, Fenwick and West, Morpheus Ventures, and Dragonfly Capital also joined in. The Block has more here.

Summer, a 17-month-old, New York-based proptech startup that aims to streamline the way people buy and use second homes, raised a $13.4 million seed round from co-leads QED Investors and Lightspeed Venture Partners, with 1Sharpe Ventures and Firstminute Capital also chipping in. FinLedger has more here.

SuperTeam Games, a year-old, San Jose, Ca.-based startup that is building multi-player sports games based on blockchain technology, raised a $10 million seed round led by Griffin Gaming Partners, with additional participation from Forte, Powerhouse Capital, and former Disney CEO Michael Eisner, among others. VentureBeat has more here.

​​Valkyrie Investments, a two-year-old startup based in Nashville, Tn., that develops financial products such as trusts and ETFs for the crypto market, raised $11.15 million in funding from BNY Mellon, Wedbush Financial Services, Clearsky, Zilliqa Capital, C-Squared Ventures, Belvedere Strategic Capital, and SenaHill Partners. The company has raised a total of $23.3 million. The Block has more here.

Brown Foods, a year-old, Delhi, India-based company developing a “real” whole milk created using mammalian cell culture technology, raised $2.36 million Y Combinator, AgFunder, SRI Capital, Amino Capital, Collaborative Fund and a group of individual angel investors, including Kunal Shah. TechCrunch has more here.

Curio NFT Intelligence, a nine-month-old startup based in Santa Monica, Ca., that provides an analytics tool to browse NFTs and track their value, raised a $3.7 million seed round led by 776, with additional funds provided by Gary Vee, Cozomo de Medici, Polygon CEO JD Kanani, OpenSea CEO Devin Finzer, OrangeDAO, and Coinbase Ventures. TechCrunch has more here.

De Oro Devices, a four-year-old startup based in San Luis Obispo, Ca., whose NexStride gadget helps people with Parkinsons fight "freezing," raised a $2.8 million seed round led by True Wealth Ventures; AARP, StartUp Health, Capital Factory, Wai Mohala Ventures, Kachuwa Impact Fund, Barton Investments, HealthTech Capital, Wealthing VC Club, Rockies VC, and Mentors Fund also participated. The company has raised a total of $4.3 million. TechCrunch has more here.

Five to Nine, a four-year-old Chicago startup that helps enterprises plan events for employee groups and measure the effectiveness of these meetings, raised a $4.25 million seed round led by Black Ops Ventures, with additional capital supplied by Slack Fund and Cleveland Avenue. TechCrunch has more here.

Gander, a year-old, Los Angeles-based e-commerce platform that collects and embeds user-generated video content into retail sites so shoppers can see what a product looks like in the wild, has raised $4.2 million in seed funding co-led by Harlem Capital and Crossbeam Venture Partners. TechCrunch has more here.

GoMyCode, a five-year-old, Tunisia-based edtech startup that offers training in digital skills and connects users with job opportunities in tech around the world, has raised $8 million in Series A funding. AfricInvest, through its Cathay AfricInvest Innovation Fund, and the French-based development finance institution Proparco co-led the round. TechCrunch has more here.

Just Move In, a seven-year-old startup based in Bournemouth, U.K., that helps people who are moving to a new home to sell up their utilities and other services in one fell swoop, raised £4 million. Longbrook Ventures and Love Ventures co-led the deal. The company has raised a total of $9.3 million. TechCrunch has more here.

Overalls, a year-old, New York startup whose platform integrates with a company's benefits program in order to demystify insurance and encourage employees to use their benefits, raised a $4.6 million round led by RPM Ventures, with additional capital supplied by Frontier Ventures and former NFL player Jerod Mayo. Insurtech Insights has more here.

SolarSquare, a 2.5-year-old, Mumbai, India-based startup that is racing to sell, install and help individuals finance solar panels, has raised $4 million in seed funding led by Good Capital. TechCrunch has more here.

TestBox, a two-year-old startup based in Boulder, Co., that helps clients test customer support software in their own environments, raised a $10 million seed round led by Felicis Ventures; SignalFire and Firstminute Capital also participated. The company has raised a total of $12.7 million. TechCrunch has more here.

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Forbion, the 16-year-old, Netherlands-based venture firm, has raised €470 million in capital commitments for its second European biotech fund. FierceBiotech has more here.

China’s securities watchdog said it’s not conducting a review and research work on an Ant Group IPO, following a report in Bloomberg that regulators are holding early-stage discussions about a revival of the fintech company’s listing. More here.

Jeff Bezos and Mukesh Ambani, two of the world’s richest men, are set for another clash. This time the potentially $7.7 billion fight is over the media rights to the Super Bowl of cricket, one of the world’s fastest-growing sporting events with 600 million viewers. Bloomberg has the story here.

The Seattle trucking marketplace startup Convoy laid off 7% of its staff today, becoming the latest tech company to slash headcount amid an uncertain economic environment. Convoy said it employed 1,300 people in April, when it raised a $260 million investment round at a $3.8 billion valuation, so GeekWire estimates that the cuts affected around 90 employees.

Kara Swisher, the tech commentator and Recode co-founder, is leaving the New York Times to return to Vox Media. Swisher says she’s become “very interested” in owning intellectual property and sharing in the benefits of building a business alongside a partner. Bloomberg has more here.

Jay-Z is teaming up with former Twitter CEO Jack Dorsey to launch Bitcoin Academy, a program to help underserved kids "learn that you can lose all your money on an unstable currency that is ruining the planet," observes Gawker. TechCrunch takes a longer look here.

SK Telecom Americas is hiring a venture capital associate; the job is in Santa Clara, Ca. More here.

Artificial intelligence gurus are quitting top jobs at companies like Google, Meta, OpenAI and DeepMind and joining a new breed of start-ups that want to take AI to the next level. observes CNBC. It reports that four of the best-funded new AI start-ups — Inflection, Cohere, Adept and Anthropic — have recently poached dozens of AI scientists with backgrounds in Big Tech.

The billionaires behind a push to revive U.S. chipmaking.

Coinbase employees apparently want to see several top execs removed. Here's a look at a petition that an unknown number of them crafted.

Home buyers just can't quit the Craftsman style.

Sleepless in Singapore: the challenges facing Hong Kong expats as families flee China's restrictions.

Eating two portions of fish per week has been linked to an increased risk of skin cancer, says a new observational study of nearly half a million people. 

Phil Mickelson has been indefinitely suspended by the PGA along with 16 other pro golfers for competing today in the Saudi-backed LIV Golf event near London, but we're guessing Mickelson is fine with the consequences. His deal with LIV is reportedly worth about $200 million -- more than twice what he has earned across his career, says CNBC. In February, Mickelson told his biographer that he believes it’s “scary” to be involved with the Saudis but that there were other factors at play, like, 200 million other factors.

A modernist marvel hits the market in East Hampton.

Father's Day gifts for the stylish dad. 🎩

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