Strictly VC - So where were the regulators?

Happy Saint Patty's Day.:) We're exhausted from this insane week, so we already drank a Guinness and cannot guarantee the quality of our StrictlyVC Download podcast as a result. We do think you'll enjoy it, featuring as it does founder Parker Conrad, who spoke with us about a $500 million Series E funding round he managed to pull together last weekend after his company, Rippling, was put in a hair-raising position by the Silicon Valley Bank implosion. (You can also read some of what happened below.) We also talked with Universal Hydrogen founder and CEO Paul Eremenko, who says his company has developed the largest airplane ever to fly on hydrogen fuel cells. 

Giant thanks to this week's sponsor, Tegus, which says it can help VCs figure out which deals to fast track, aided in part by a library of 55,000+ expert calls. For a limited time, StrictlyVC readers can trial Tegus for free at tegus.com/svc.

First Republic Bank's shares fell more than 30% today after a multibillion-dollar rescue deal orchestrated by the biggest U.S. banks failed to convince investors that the troubled lender is on solid footing. The WSJ has more here.

According to the FT, UBS is in discussions to take over all or part of Credit Suisse, with the boards of Switzerland’s two biggest lenders set to meet separately over the weekend to consider what would be Europe’s most consequential banking combination since the financial crisis,

With just $2.2 billion in remaining liquidity, Silicon Valley Bank’s parent company has filed for bankruptcy. The widely expected move was done to ease a sale of its remaining assets after the bank was seized by federal regulators a week ago. TechCrunch has more here.

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As a serial entrepreneur who has famously endured some ups and downs, Parker Conrad thought he’d seen it all. Still, he never imagined that there would be a run on Silicon Valley Bank that would upend Rippling, his six-year-old workforce management company, a run so severe that Rippling would liquidate $130 million in money market funds that its customers needed for their payrolls.

He also didn’t imagine that in the span of 12 hours, Rippling would be able to secure $500 million in fresh funding to protect his company in the event that the markets spiraled even more out of control.

Yet both things happened in short order, enabling Rippling to avert disaster and also quite possibly changing the 1,800-person company forever. Now, a week later, Conrad suggests he’s still processing it all, saying there wasn’t really time to panic; there was too much to do.

Everything everywhere all at once

As with so many customers of the 40-year-old bank, Conrad first heard that there was trouble brewing last Thursday morning, March 9. Conrad received a call from a founder friend around 10 a.m., asking “‘Hey, what are you guys doing about SVB?’” Conrad recalls now. “I was like, ‘What are you talking about?’ and he said they’d gotten a call from an investor at Valor Equity Partners who told them they should move their money out of SVB.” 

Conrad’s initial reaction was,” That seems crazy; I haven’t heard anything about that.” Then he started looking more closely at his laptop, where on Twitter, moving money out of the bank had very suddenly become the talk of the startup world.

With SMS messages starting to appear from Rippling’s own investors on his phone, Conrad quickly opened a Slack channel titled “SVB risk,” inviting the company’s finance team but hesitating briefly before looping in the company’s CTO, Albert Strasheim, and other engineers. Says Conrad: “I didn’t want to panic anyone or set off a crisis internally until we were sure there was an issue.”

By 11:30, it was clear; there was an issue. More here.

Cast AI, a four-year-old Miami startup that analyzes a company’s cloud usage in order to find the optimal cost-performance ratio, raised a $20 million led by Creandum. The company has raised a total of $38 million. TechCrunch has more here.

Fairmatic, a San Francisco startup that claims to use AI to reduce the risk associated with commercial auto insurance policies, raised a $46 million round. Battery Ventures was the deal lead. The company has raised a total of $88 million. TechCrunch has more here.

Parker, a startup that offers a corporate credit card for e-commerce businesses with spending limits that it claims are 10 to 20 times higher than traditional business credit cards, says it has raised a $5.9 million seed round and a $31.1 million Series A round led by Valar Ventures, as well as $70 million in debt from Triple Point Capital and $50 million in warehouse debt from Jeffries. TechCrunch has more here.

Allermi, a four-year-old San Francisco startup that operates a direct-to-consumer telehealth service providing a customized approach to allergy relief, raised a $3.5 million seed round co-led by Nelstone Ventures and FourSight Capital Partners. The company has raised a total of $4.8 million. More here.

Fenix24, a one-year-old startup based in Chattanooga, Tn., that provides a professional cybersecurity force focused exclusively on restoring companies after cyber breach events, raised a $5 million. Eos Venture Partners was the deal lead. More here.

Payabli, a three-year-old Miami startup that says its tools enable its clients to accept payments from customers and automate payouts to vendors, raised an $8 million seed extension round. Investors included TTV Capital, Fika Ventures, and Bling Capital. The company has raised a total of $12.1 million. Refresh Miami has more here.

Shinydocs, a 10-year-old Canadian company that automates the process of finding and identifying files, media content, and documents within an organization’s repositories, raised a $9.7 million round. First Ascent Ventures and Export Development Canada co-led the deal. BetaKit has more here.

Soul Wallet, a startup based in Santa Monica, Ca., that is developing an online, self-custodial Ethereum wallet built on top of ERC-4337, raised a $3.1 million seed round. Investors included Struck Crypto, Game7DAO, NGC Ventures, Dispersion Capital, Alchemy, Ankr, and Signum Capital. TechCrunch has more here.

TeleportDAO, a Vancouver crypto startup that aims to become the trusted infrastructure for secure cross-chain interactions, raised a $2.5 million seed round led by AppWorks and DefinanceX, with participation from Quantstamp, Coinlist, Candaq Fintech Group, SNZ Holding Limited, and Gate Labs. More here.

Trala, a seven-year-old Chicago startup whose platform listens to users play their instruments and provides instant feedback, raised an $8 million Series A round led by Seven Seven Six, with Lachy Groom Fund, Altman Capital, Next Play Ventures, and Concrete Rose Ventures also participating. The company has raised a total of $19.8 million. More here.

Affinity spoke to investors at Menlo Ventures, Two Sigma Ventures, and Nexa Partners for their tips to make outbound deal sourcing more efficient. Get their top 5 best practices in the dealmaker’s email playbook. Download your copy today.

Bullish, a 7.5-year-old, New York-based early-stage venture firm focused on U.S. consumer startups (past bets include Peloton, Harry's, and Casper), has reportedly raised garnered $50 million in capital commitments for its second fund. More here.

Last month, when transportation startup Via raised $110 million at a $3.5 billion valuation, it said it planned to make acquisitions to grow its transportation technology stack. Now the company is announcing its acquisition of Citymapper, the London startup that produces a popular urban mapping app. Financial terms aren't being disclosed but the deal involved both cash and stock, says TechCrunch. More here.

The WSJ reports that a group of Silicon Valley executives, including Founders Fund cofounder Peter Thiel and Washington lawmakers, are quietly mobilizing against China’s involvement in the U.S. tech industry ahead of TikTok CEO Shou Zi Chew’s Capitol Hill testimony next week. It says that spearheading the effort to create an alliance of China hawks is Jacob Helberg, a former Google policy adviser (who also has ties to Founders Fund -- his husband is general partner Keith Rabois) -- and that Vinod Khosla, for whom Rabois previously worked as an investor, is also part of a small group gathering next week to discuss China and national security. More here.

Baidu’s ChatGPT rival launched yesterday to mixed reviews. More here.

Meta said today that it's rolling out paid verification on Instagram and Facebook in the U.S.

So where were the regulators?

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Two words: plant pedestals.

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