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Well, not everything! But it's proving a lousy week for a wide number of people, including pretty much everyone with ties to the formerly high-flying cryptocurrency exchange FTX and its founder, Sam Bankman-Fried. That includes the 500-plus people employed across imploding FTX; FTX.US (which appears headed for trouble); and his trading desk Alameda Research, which is definitely shutting down.
Also impacted: Alfred Lin of Sequoia Capital, who, to our great delight, has decided to join us at our upcoming StrictlyVC Insider event on Thursday, January 12, in San Francisco to talk in part about the firm's investment in FTX, which Lin led with Sequoia partner Michelle Bailhe. Should Sequoia and other FTX backers have asked for more information? Why didn't they think it was a little good to be true? Was FTX's fate beyond the reach of better corporate governance, and could it happen again? We'll discuss these questions, and cover much more, in a conversation you won't want to miss.
Giant thanks to our exclusive partner Felicis for throwing its support behind the evening. We're also very grateful to the commercial real estate services giant CBRE for letting us taking over its space inside Salesforce Tower for the event.
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We'll move on from FTX, but this was by far the most shocking news in the world of tech, courtesy of the WSJ: "Crypto exchange FTX lent billions of dollars worth of customer assets to fund risky bets by its affiliated trading firm, Alameda Research . . .
"FTX Chief Executive Sam Bankman-Fried said in investor meetings this week that Alameda owes FTX about $10 billion . . .FTX extended loans to Alameda using money that customers had deposited on the exchange for trading purposes . . .
"All in all, FTX had $16 billion in customer assets . . .so FTX lent more than half of its customer funds to its sister company Alameda."
MORE THAN HALF?!?! More here and for a great explainer of what these developments mean, we again defer to Bloomberg's Matt Levine.
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Island, a two-year-old Dallas startup that produces an enterprise browser product that embeds security models and requirements within the browsing experience itself, raised a $60 million Series B extension round led by Georgian. (In March it raised $115 million in Series B funds led by Insight Partners at a $1.3 billion valuation.) The company has raised a total of $285 million. SiliconANGLE has more here.
Kyte, a nearly four-year-old, San Francisco-based company that deliver rental cars to its customers on-demand for daily, weekly or monthly use, has raised $60 million in Series B growth equity financing. InterAlpen Partners led the round, joined by Valor Equity Partners, Anthemis, Citi Ventures, and Hearst Ventures. Earlier backers also chipped in, including DN Capital, 1984 Ventures, FJ Labs, and Urban Innovation Fund. More here.
Ordergroove, a 12-year-old New York startup that has built a “subscription as a service” platform for brands and retailers interested in competing with Amazon Prime, raised a $100 million. Primus Capital Partners was the deal lead. TechCrunch has more here.
Ramp, a five-year-old London crypto payments startup that says its software development kit for on- and off-ramp payment features allows users to buy cryptocurrencies via debit and credit cards, bank transfers, and Apple Pay, raised a $70 million Series B round at an unspecified valuation believed to be in excess of $450 million. The co-leads were Abu Dhabi-based sovereign wealth fund Mubadala Capital and Korelya Capital, with Cogito Capital and previous lead backer Balderton Capital also taking part. The company has raised a total of $133.9 million. The Block has more here.
TRM Labs, a four-year-old San Francisco startup that provides intelligence used by law enforcement agencies, regulators, banks, and private companies to investigate and analyze crypto-related fraud and financial crimes, raised a $70 million Series B extension round led by Thoma Bravo, with Goldman Sachs, PayPal Ventures, Amex Ventures, and Citi Ventures also chipping in. The company has raised a total of $149.9 million. CoinDesk has more here.
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| Big-But-Not-Crazy-Big Fundings |
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Agrolend, a two-year-old São Paulo startup that gives farmers access to credit through partnerships with distributors of agriculture equipment, raised a $27 million Series B round led by Lightrock and including Yara Growth Ventures and Mago Capital. The company has raised a total of $98.9 million. FinTech Futures has more here.
Bink, an Egyptian startup that partners with Egyptian merchants, allowing them to underwrite customers at the point of sale who are purchasing items such as electronics, furniture, and automotive services, raised a $12.5 million in pre-seed and seed equity rounds. The co-leads were Sawari Ventures and Abu Dhabi’s Emirates International Investment Company. The company also raised $11.2 million in debt financing and $8.3 million in securitized bond issuance. TechCrunch has more here.
Elemental Machines, a seven-year-old, Cambridge, Ma.-based developer of data-tracking sensors and software for laboratory equipment, raised a $41 million Series B round co-led by Sageview Capital and Omega Venture Partners, with Gutbrain Ventures and Digitalis Ventures also contributing. The Boston Globe has more here.
Fathom, a San Francisco startup that claims to use artificial intelligence to automate the medical coding process, raised a $46 million Series B round co-led by Lightspeed Venture Partners and Alkeon Capital, with additional participation from Cedars-Sinai, Inflect Health, ApolloMD, Founders Fund, and Tarsadia. The company has now raised $61 million altogether. More here.
Mem, a one-year-old startup based in Los Altos Hills, Ca., whose note-taking app revolves around search and a chronological timeline and allows users to attach topic tags, tag other users, and add recurring reminders to notes, raised a $23.5 million led by OpenAI Startup Fund at a $110 million post-money valuation. The company has raised a total of $29 million. TechCrunch has more here.
Ping, a Miami startup whose freelancer-focused, app-based platform aims to ease the process of getting paid in dollars and converting those funds to local currency, raised $15 million in seed funding. Investors included Y Combinator, Race Capital, BlockTower, Danhua Capital, Signum Capital, and Goat Capital. The Block has more here.
Savvy Wealth, a one-year-old New York startup whose platform for financial advisors includes CRM, investment management, and financial planning, raised an $11 million Series A-1 round led by The House Fund, with Thrive Capital, Index Ventures, and Brewer Lane Ventures also participating. More here.
The Wire Digital, a startup that provides information and data on Chinese companies, raised a $14 million led by Sequoia Capital. The New York Times has more here.
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Airly, a six-year-old London startup that uses sensors and software to detect air pollution, raised a $5.5 million Series A round led by Pi Labs, with additional investors including AENU, Untitled, Semapa Next, TO Ventures, and Richard Branson’s family office. The company has raised a total of $11.9 million. TechCrunch has more here.
Embue, a seven-year-old startup based in Worcester, MA, that helps owners and operators manage multifamily apartment buildings through a dashboard that can monitor harmful conditions such as water leaks and high humidity, raised a $2.3 million seed round led by Shadow Ventures, with Avesta Fund and Leder Investments also chipping in. The company has raised a total of $2.3 million. More here.
Hwy Haul, a four-year-old startup based in Santa Clara, CA, whose AI platform connects produce shippers with truckers, raised a $10 million round led by Eileses Capital, with additional investment form True Blue Partners, BluePointe Ventures, and FDC Partners. The company has raised a total of $31.8 million. TFN has more here.
Ibex Medical Analytics, a six-year-old Tel Aviv startup that has built a a clinical-grade, multi-tissue platform to help pathologists detect and grade breast, prostate, and gastric cancer, raised a $10 million round from Kreos Capital. The company has raised a total of $61.6 million. More here.
Kalder, a New York startup that has developed a web3 toolkit enabling marketing firms, brands, and creators to tokenize product enthusiasts and make following luxury brands a full-time leisure pursuit for the customer, raised a $3 million pre-seed round. Investors included Indigo Fund, 8VC, 500 VC, Human Capital, and Soma Capital. Tech.eu has more here.
Keyo, a 7.5-year-old, New York-based biometric identity company that, via a palm scanner and its software, allows anyone to verify who they are and access what is theirs with a contactless scan of their hand, has raised $7 million in funding, including from Netflix cofounder Marc Randolph. TechCrunch has more here.
MySimplePetLab, a three-year-old Minneapolis startup that sells home testing kits for dogs and cats, raised a $5 million Series A round led by Mars Companion Fund. The company has raised a total of $6.7 million. Forbes has more here.
Pineapple, an iOS app giving young professionals a way to network through visual story profiles that act as digital portfolios, raised a $1.1 million pre-seed round in April (that it's just now discussing) co-led by F7 Ventures and 500 Global. TechCrunch has more here.
TOffeeAM, a three-year-old London startup that works to maximize structural and thermo-fluid performance in the design of air jets, sports cars, and fuel pipelines in order to reduce CO2 levels, raised a $5.7 million Series A round co-led by Presidio Ventures Europe and East Innovate, with IQ Capital, Exor Seed, Type One Ventures, and Excellis also participating. The company has raised a total of $7 million. Tech.eu has more here.
Topicals, a four-year-old startup based in Santa Monica, CA, that has developed fastest-growing skincare brand at Sephora, raised a $10 million round. CAVU Consumer Partners was the lead investor. The company has raised a total of $12.6 million. Forbes has more here.
WellTheory, a three-year-old San Francisco startup that helps to support individuals with debilitating autoimmune disorders, raised a $7.2 million seed round led by Accel; Lux Capital, Box Group, and Coalition Operators also took part. The company has raised a total of $7.2 million. Forbes has more here.
Yave, a five-year-old Mexico City startup whose embedded mortgage app can be embedded into customer websites, raised a $7.5 million seed II round co-led by Better Tomorrow Ventures and MetaProp, with Goodwater, Activant, Moore Capital, Fintech Fund, Cross River, Vinte, Magma Partners, DILA Capital, and Wollef also piling on. Axios has more here.
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Allied Advisers provides an analysis of a select group of companies across the two flavors of SaaS: horizontal vs vertical SaaS. While horizontal SaaS companies generally have larger TAM, vertical SaaS companies can be more capital efficient and have better operational metrics, making them better suited for middle-market funds. While there are category leaders in horizontal SaaS, there are also a lot of opportunities in building targeted, vertical SaaS companies that can become leaders in their own vertical sectors. As advisors who have worked across both flavors, we see interesting differences; more here.
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Forbes, the media company whose SPAC merger collapsed over the summer, is in talks to sell to a “consortium of family offices and global investors" says the company. The New York Times says the outfit had been seeking at least $800 million in a sale but that, according to its sources, the final price will most likely be below that. More here.
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Several top executives resigned from Twitter yesterday in an exodus that prompted federal regulators to warn they might step in. Among those to bounce: Twitter's head of moderation and safety, Yoel Roth, who had become the public face of the company’s efforts to reassure users and advertisers that Twitter would not descend into a “free-for-all.” Just yesterday he appeared on a Twitter Spaces public meeting to defend the company to advertisers alongside Musk. Also out the door: Chief Information Security Officer Lea Kissner, the company’s chief privacy officer, and its chief compliance officer. More here.
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Yesterday, we speculated about the unrealized gains that Sequoia Capital is losing by marking down its FTX investment to zero. Turns out Sequoia Capital's lost upside is slightly less than we imagined, though still significant: For its $150 million investment from its Global Growth Fund III, its unrealized gain was $62 million because it owned less than 1% of FTX. Sequoia also marks its private company investments at a discount to their last round.
SoftBank Group's core Vision Fund arm posted a $7.2 billion quarterly loss as plunging startup valuations continue to hammer the company’s financial performance. SoftBank will lose even more because of the spectacular meltdown of FTX, though it has declined so far to comment on the extent of its exposure. SoftBank joined a $400 million round for FTX in January at a valuation of $32 billion.
About 27% of voters between the ages of 18-29 cast a ballot in the midterm election this year, according to an early estimate from the Center for Information and Research on Civic Learning and Engagement at Tufts University. NPR has more here.
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Elon Musk emailed Twitter employees for the first time late yesterday to prepare them for “difficult" economic times ahead and to ban remote work unless he personally approves it. The new rules, which kick in immediately, mandate that employees be in the office for at least 40 hours per week. (He did add: "Obviously, if you are physically unable to travel to an office or have a critical personal obligation, then your absence is understandable.") According to The Information, he also told employees yesterday that Twitter may burn “several billion dollars” in cash next year and that “bankruptcy is not out of the question."
Amazon CEO Andy Jassy is leading a cost-cutting review of the tech giant and paring back on businesses at the company that haven’t been profitable, reports the WSJ. More here.
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Join hundreds of military veteran entrepreneurs, venture capitalists, and early-stage operators at the Military Veteran Startup Conference hosted by Context Ventures on Feb 2nd & 3rd, 2023 in San Francisco. Military veterans make fantastic founders and investors - come build your network at the densest gathering of military veteran talent in the early-stage ecosystem. The event is open to everyone: military veterans, veteran spouses, and civilians. Learn more and register here.
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