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Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg told the company today, after which staffers were alerted via email whether their role was being impacted by the layoff. He said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire fewer people next year. The company extended its hiring freeze through the first quarter with a few exceptions, he added. CNBC has more here.
Crypto contagion fears are growing.
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| Sequoia Capital Just Marked Down Its Investment in FTX to Zero Dollars |
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Sequoia Capital just marked down to zero the value of its stake in the cryptocurrency exchange FTX — a stake that, as of last week, likely represented among the most sizable unrealized gains in the venture firm’s 50-year history.
It alerted its limited partners in a letter that it sent out to them this evening.
No doubt those backers are collectively still processing the events of this week. They're accustomed to startup failures; this is outright calamity.
When Sequoia invested in the Series B round of FTX in July 2021, the high-flying, Bahamas-based outfit was valued at $18 billion. Two months later, the company was valued by investors at $25 billion. In January of this year,
FTX raised a $400 million in Series C round that brought its total funding to $2 billion and its valuation to a breathtaking $32 billion.
Now, following a series of missteps — that’s the best-case scenario — FTX didn’t just lose its rich valuation. According to the WSJ, FTX founder and CEO Sam Bankman-Fried told investors today that he needed emergency funding to cover a shortfall of up to $8 billion due to withdrawal requests received in recent days. Reportedly, he has been seeking a mixture of debt and equity.
It's not surprising that Sequoia decided instead to write off its roughly $210 million investment. Presumably, others of FTX's investors -- including BlackRock, Tiger Global, Insight Partners, and Paradigm -- are shooting out their own communications to limited partners today about making the same decision. (The Ontario Teachers’ Pension Plan Board, which invested directly in FTX, has a much broader base of shareholders who may be wondering about their retirement savings, even while their pensions are guaranteed.)
More uncharacteristic was Sequoia’s decision to tweet out the letter tonight after sending it directly to its investors. It’s hard to interpret the move as anything other than a clear signal that Sequoia wants to distance itself as far from FTX as it can, just as details of FTX’s abrupt unspooling continue to surface.
More here.
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Zenas Biopharma, a startup based in Waltham, Ma., that is developing immune-based therapies for conditions such as IgG4-related disease, a chronic fibroinflammatory disease that can affect multiple organs, raised a $118 million Series B round led by Enavate Sciences, with additional investors including Longitude Capital, Vivo Capital, Rock Springs Capital, Perceptive Advisors, Agent Capital, Pivotal bioVenture Partners, and Superstring Capital as well as previous investors Fairmount, Wellington Management, Tellus BioVentures, Quan Venture Fund, and Xencor. FierceBiotech has more here.
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| Big-But-Not-Crazy-Big Fundings |
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Archax, a four-year-old London startup that allows institutional investors to custody and trade a variety of digital assets (such as digital securities and cryptocurrencies) alongside traditional securities, raised a $28.5 million Series A round led by Abrdn; Bitrock Capital, Blockchain Coinvestors, and the Tezos Foundation also participated. Finance Feeds has more here.
Beekeeper, an 11-year-old Zurich startup that helps companies engage with their "deskless" frontline workforce, raised a $50 million Series C round. Investors included EGSB, Kreos Capital, Energize, Thayer, SwissCanto, Keen Ventures, Alpana, and Verve Capital. The company has raised a total of $146.5 million. TechCrunch has more here.
Equals, a one-year-old San Francisco startup that is building a spreadsheet product that can build analyses with real-time data directly from a database or data warehouse, with or without using sequel query language, raised a $16 million Series A round. Andreessen Horowitz was the deal lead; additional investors included Craft Ventures, Box Group, Worklife, and Combine. The company has raised a total of $22.6 million. TechCrunch has more here.
Everybuddy Games, a nine-year-old Tel Aviv startup that developed casual mobile game "Lucky Buddies," raised a $15 million Series A round led by Makers Fund and including Key1 Capital. Calcalist has more here.
Fordefi, a one-year-old New York startup that is developing a crypto wallet for institutions, raised an $18 million seed round led by Lightspeed Venture Partners and joined by Electric Capital, Jump Crypto, Castle Island, Pantera Capital, Illuminate Financial, PayPal Alumni Fund, Nima Capital, Digital Currency Group, Defiance Capital, StarkWare and Alameda Research (whose fate right now is also up in the air, seemingly). Fortune has more here.
Glow, a four-year-old San Francisco startup whose digital insurance agency for small businesses uses technology to look more deeply at data like job codes to judge the risk of a given business, raised a $22.5 million Series A round led by Cota Capital, with additional capital provided by AV8 Ventures, Markd, Startup Venture Capital, and Maiden Re. More here.
Harmonic, a New York startup whose search engine helps companies research startups that they hope exist in the world, raised a $23 million Series A round led by Sozo Ventures, with previous investor Craft Ventures also chipping in. The company has raised a total of $30 million. TechCrunch has more here.
Joylux, a nine-year-old Seattle startup that markets products to support the health of menopausal women, raised a $13 million Series A round co-led by J-Ventures and J-Impact. The company has raised a total over $20 million. GeekWire has more here.
Macrometa, a startup based in San Mateo, Ca., that enables cloud developers to run backend services closer to mobile phones, browsers, smart appliances, connected cars, and users in edge regions or points of presence, raised a $38 million round led by Akamai Technologies, with Shasta Ventures and 60 Degree Capital also pitching in. TechCrunch has more here.
Muncher, a three-year-old Bogota startup that operates over 400 "dark kitchens" in Colombia, Mexico, Peru, and Brazil, raised a $27 million Series B. Glisco Partners was the deal lead. The company has raised a total of $53.3 million. LatamList has more here.
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Antavo, a ten-year-old London startup that has developed a no-code platform that enhances customer retention and loyalty, raised a $10 million Series A round led by Euroventures, with Lead Ventures, iEurope, and Innovation Nest also participating. EU-Startups has more here.
Anzen, a two-year-old San Francisco startup that provides executive risk insurance, raised a $10 million led by Andreessen Horowitz, with additional participation from MS&AD Ventures and Tokio Marine. More here.
Cherry, a Brooklyn startup that automates B2B payment processing for medium and small companies, starting with the nursing home industry, raised a $4 million seed round. NFX was the deal lead. More here.
Mendel, a two-year-old, Mexico City startup that is developing B2B payments software, raised a $10 million Series B round and $50 million in debt. Investors included Industry Ventures, Infinity Ventures, and Victory Park Capital. The company has raised a total of $95 million. PYMNTS has more here.
Notifi, a 10-month-old communication infrastructure platform for web3, said Tuesday it has raised $10 million in an oversubscribed seed funding co-led by previous backers Hashed and Race Capital. Other investors include Struck Capital, HRT Capital, Wintermute, and Superscrypt, an early-stage blockchain investment company founded by Temasek, bringing its total funding to $12.5 million. TechCrunch has more here.
Options MD, a two-year-old Los Angeles startup that provides telehealth for patients suffering from treatment-resistant depression, raised a $2.4 million round led by Bread & Butter Ventures and joined by M13, Bright Ventures, Collab Capital, MedMountain Ventures, and Techstars. The company has raised a total of $3.9 million. CityBiz has more here.
Secure AI Labs (aka SAIL), a five-year-old startup based in Cambridge, Ma., whose clinical data registry helps patient advocacy groups connect with clinical researchers to securely access greater volumes of representative data, raised a $4.7 million seed round led by Asset Management Ventures, with Mozilla Ventures, Future Labs, and York IE also participating. The company has raised a total of $8.1 million. More here.
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Rule of 40 for SaaS companies is a useful metric for private equity investors and strategic buyers to measure the performance of SaaS companies. Allied Advisers’s report shows that companies that exceed Rule of 40 trade at significant, premium valuations compared to companies that do not even in this downturn. In this market downturn for public and private companies, the Rule of 40 is a good metric for founders, management and investors to keep in mind as they build their companies for optimal valuations.
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EQT Ventures, the venture fund arm of the Swedish investment giant EQT that makes early-stage bets on startups primarily in Europe, has closed its latest fund with 1 billion euros in capital commitments. TechCrunch has more here.
Microsoft's venture arm, M12, has partnered with GitHub to launch a $10 million fund that will make investments in open source startups developing on GitHub’s platform. More here.
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Astra, a rocket startup that went public last year, told investors Tuesday it laid off 16% of its workforce as part of a wider strategy to increase shrinking financial runway and decrease expenses. The company also said it would reduce near-term investments in space services to grow its core businesses: namely, launch and spacecraft engines. TechCrunch has more here.
Kabam, the gaming company that has developed mobile games in partnership with entertainment brands including Disney, Marvel and Universal, has laid off about 7% — around 35 people — of its workforce, reports TechCrunch. More here.
Redfin is shuttering its iBuying business and laying off workers for the second time in almost five months, as the likelihood of a prolonged US housing slowdown continues to ripple through the industry. In Bloomberg.
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Advertisers don’t mind what Elon Musk says; they're concerned about what he does and what he tweets.
Google has been rolling out a redesign of its email service. If you don’t care for the new look, too bad.
Twitter's blue check mark chaos.
Tesla vehicles will soon have Zoom video conferencing.
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Derek Jeter's castle (no, really) is headed to the auction block.
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