First Republic backs away from the edge, GPT-4 makes a splash, and regulators probe insider share sales at SVB

First Republic's shares ended the day up 27% after falling precipitously yesterday. A Washington official told Reuters of its somewhat reassuring performance, "We're certainly monitoring what's going on at First Republic. They're one of the banks that has been under a little more stress, but we have no announcements at this time about any actions that we're taking."

OpenAI has released the latest version of its neural network, GPT-4, four months after its ChatGPT stunned Silicon Valley. The update is an improvement, but it carries some of the same baggage, says the New York Times. In its own blog post, OpenAI said GPT-4 still makes many of the errors of previous versions, including “hallucinating,” perpetuating social biases, being "overly gullible" and offering bad advice. It also lacks knowledge of events that happened after September 2021, when most of its training data was cut off, and “does not learn from its experience.” Still, users are raving. More here and here and here. (Microsoft also acknowledged today that its sometimes moody Bing AI bot is powered by GPT-4.)

The Federal Reserve is weighing tougher rules for midsized banks as it seeks to avoid a repeat of the recent collapse of Silicon Valley Bank that forced government authorities to intervene at the weekend. According to the FT, the U.S. central bank is reviewing the capital and liquidity requirements it imposes on banks, especially those with between $100 billion and $250 billion in assets. Regulatory experts, it notes, believes SVB’s red flags could have been identified in advance, or even outright avoided, had lawmakers and regulators not eased rules for smaller lenders in recent years.

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The Justice Department and SEC are investigating the stock sales that officers of Silicon Valley Bank made days before the bank failed, according to both the WSJ and the NYTimes. The probes are reportedly in their preliminary phase. Both outlets note that it's common to investigate prearranged stock selling plans when the sales take place shortly before releasing news that could have an adverse impact on a company's share price.

Their apparent focus for now are on securities filings that show the bank's CEO of 12 years, Greg Becker, and its CFO, Daniel Beck, who joined the outfit nearly six years ago from Bank of the West, sold shares two weeks ago ahead of the bank's abrupt collapse.

Becker exercised options on 12,451 shares on Feb. 27 and sold them the same day, netting roughly $3 million. Beck sold roughly one-third of his holdings in the company, $575,000 worth of shares, on the same day.

The sales were conducted via 10b5-1 plans, which allow insiders of publicly traded corporations to set up a trading plan for selling stocks they own by establishing a predetermined number of shares to be sold at a predetermined time. The laws around such plans, established by the SEC in 2000, are intended to guard against insiders from unfairly profiting from important corporate information that was not yet public.

As the New York Times notes, SEC enforcement probes often involve "examining whether a firm accurately disclosed financial risks or business uncertainties before a negative event. Enforcers typically examine the company’s regulated, periodic disclosures as well as management’s statements to investors or analysts on conference calls and in other forums."

While the probes may not lead to allegations of so-called insider trading, one possible problem for both Becker and Beck ties to the proposed capital raise that SVB announced last Wednesday -- the same release that set investors on edge, leading many to begin moving their money out of the bank.

More here.

Adept, a one-year-old San Francisco startup founded by former OpenAI team members that say their AI assistant can execute responses to typed queries, raised a $350 million Series B round led by General Catalyst with participation from Spark Capital. The deal was done at a post-money valuation of at least $1 billion, according to reporting by Forbes. 

Airex Energy, a seven-year-old Canadian startup that transforms turn sawmill byproducts and logging residue into biocoal pellets, raised a $27.8 million Series B round led by Cycle Capital, with additional participation from Fonds de solidarité FTQ and previous investors Investissement Québec, Desjardins-Innovatech, and Export Development Canada. The Globe and Mail has more here.

AlgoTx, a five-year-old French startup that is developing drugs to treat complex pain, such as the discomfort that cancer patients often experience as a result of chemotherapy, raised a $21.5 million Series B round led by Relyens Innovation Santé / Turenne Capital, with UI Investissement and previous investors Bpifrance and Omnes Capital. The company has raised a total of $37.7 million. More here.

DRESSX, a three-year-old startup that has built an app and NFT marketplace for fashion lovers, raised a $15 million Series A round led by Greenfield, with participants including Slow Ventures, Warner Music, The Artemis Fund, and Red Dao. Forbes has more here.

Green Li-ion, a three-year-old Singapore startup that fully remanufactures spent lithium-ion battery waste into battery-grade cathode material that can be used in new batteries, raised a $20.5 million led by TRIREC, with Banpu Next and Equinor Ventures also participating. The company has raised a total of $35.5 million. TechNode Global has more here.

HealthPlix, a nearly six-year-old Bengaluru, India-based startup that helps doctors to create a digital, 360-degree medical profile of their patients that can be helpful during consultations and for treating chronic diseases, has raised $22 million in Series C funding. Avataar Venture Partners and SIG Venture Capital co-led the round, most of which came in the form of equity funding ($20 million) along with $2 million in debt. Earlier backers also joined the round, including Lightspeed Venture Partners, JSW Ventures, Kalaari Capital and Chiratae Ventures. TechCrunch has more here.

HelloSelf, a five-year-old London startup whose platform allows users to consult with therapists and create tailored psychological self-care plans, raised a $20 million Series B round led by Octopus Ventures and including Omers, Mantaray, and Oxford Capital. The company has raised a total of $31.3 million. EU-Startups has more here.

LexxPluss, a 2.5-year-old, Japan-based startup that designs and develop autonomous mobile robots to transport loads and optimize workflows within warehouses and logistic sites, has raised $10.7 million in Series A funding that values the company at approximately $38.8 million. Drone Fund led the latest financing along with SOSV’s HAX, Incubate Fund, SBI investment and DBJ Capital. TechCrunch has more here.

Mitiga, a New York startup that helps companies prepare for cyberattacks, raised a $45 million Series A round led by ClearSky Security, with participation from Samsung Next and existing investors Blackstone, Atlantic Bridge, and DNX. The company has raised a total of $77 million. TechCrunch has more here.

RightHub, a two-year-old London startup that helps its clients protect their patents, trademarks, and copyrights, raised a $15 million seed round co-led by Firstminute Capital and Anker Capital. TechCrunch has more here.

Verity, a 7.5-year-old, Zürich-based maker autonomous indoor drones meant to help with inventory tracking (and cofounded by a cofounder of Kiva Systems), has raised $32 million in Series B funding led by A.P. Moller Holding. Exor Ventures and undisclosed existing and new investors also joined the round, which brings the company's total funding to $63 million. Tech.eu has more here.

AG5, a startup that helps clients like KLM Air France and Tata Steel create custom skills matrices specific to their respective businesses, raised a $6.4 million round led by Headline, with Acadian Ventures also chipping in. TechCrunch has more here.

Elate, a four-year-old Indianapolis startup whose platform helps employees collaborate on strategic planning initiatives, raised a $4.9 million Series A round led by WestWave Capital, with participation from The Pritzker Group Venture Capital, Hyde Park Angels, and Capital Midwest Fund. The company has raised a total of $6.3 million. More here.

Jungle, a São Paulo web3 startup that is developing shooting games, raised a $6 million seed round co-led by Bitkraft and Framework Ventures, with additional investment from 32bit Ventures, Delphi Digital, Fourth Revolution Capital, Karatage, Monoceros, Norte Ventures, Snackclub, and Stateless Ventures. PocketGamer.biz has more here.

One Impression, a Gurugram, India-based influencer marketing platform that does business in markets including Indonesia, Dubai, Europe and the U.S., has raised $10 million in a funding round led by the South Korean gaming company Krafton. TechCrunch has more here.

As the co-founder and managing partner of QED Investors (and previously cofounder of Capital One), Nigel Morris has his finger on the pulse of fintech. Read this interview with Affinity for Morris's take on the abundance of dry powder right now, and the future of the industry.

Flat6Labs, an 11-year-old Egypt-based seed-stage firm, raised $95 million in capital commitments for an Africa-focused fund. TechCrunch has more here.

Rethink Ventures, a year-old, Munich, Germany-based Germany raised a €50 million fund focused on mobility, automotive and logistics. The outfit was cofounded by mobility investors Jens-Philipp Klein, previously of Atlantic Labs, and Matthias Schanze, who led the mobility team at Siemens’ venture fund Next47. Forbes has more here.

Silicon Valley Bank's new CEO Tim Mayopoulos today urged the failed bank's top venture capital clients to move their deposits back to SVB. “There’s no safer place in the United States, or any bank in the United States, for deposits,” Mayopoulos said, adding that the freshly formed bridge bank is “not even subject to the typical legal limit of [FDIC insurance that covers only] $250,000 of the account.” TechCrunch has more here.

Bank of America Corp. soaked up more than $15 billion in new deposits in a matter of days, emerging as one of the big winners after the collapse of three smaller banks dented confidence in the safety of regional lenders, sources tell Bloomberg. More here.

Valo Ventures, a thesis-driven venture capital firm investing across three megatrends: climate change, circular economy, and empowered people, is looking to bring on an associate. This job is hybrid and located in Palo Alto, Ca.

Meta CEO Mark Zuckerberg said today the company plans to cut 10,000 employees. The company laid off more than 11,000 employees in November. The market is happy, even if employees are feeling shell-shocked. Meta shares closed up 7% today; CNBC has more here.

Creditors of Silicon Valley Bank’s parent company have formed a group in anticipation of a potential bankruptcy filing, through which they hope to profit from a sale of the collapsed firm’s private-wealth and other units, according to the WSJ.

TikTok parent company ByteDance was reportedly valued at around $220 billion in a recent private-market investment by Abu Dhabi AI firm G42, a significant discount to the $300 billion that Bytedance set during a recent share buyback program. G42, controlled by United Arab Emirates royal Sheikh Tahnoon bin Zayed Al Nahyan, acquired a $100 million-plus stake from existing investors in recent months through its 42XFund, says Bloomberg. More here.

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