It's more than a feeling; according to new data, venture firms are raising -- and deploying -- a lot less

Happy Passover to those who observe it. (Also, have you seen that moon tonight?! Our entire neighborhood is illuminated.)

ChatGPT is being threatened with its first defamation suit. According to Reuters, an Australian mayor said he may sue OpenAI if it does not correct ChatGPT's false claims that he had served time in prison for bribery, in what would be the first defamation lawsuit against the automated text service. Brian Hood reportedly became concerned about his reputation when members of the public told him ChatGPT had falsely named him as a guilty party in a foreign bribery scandal involving a subsidiary of the Reserve Bank of Australia in the early 2000s.

In related news, ChatGPT invented a sexual harassment scandal and even named a real law professor as the accused. In a statement, OpenAI tells the Washington Post, “When users sign up for ChatGPT, we strive to be as transparent as possible that it may not always generate accurate answers. Improving factual accuracy is a significant focus for us, and we are making progress." More here.

Does Satoshi Nakamoto work at Apple? According to technologist and blogger Andy Baio, the Bitcoin white paper is hidden in every modern copy of macOS. So weird! Apple Insider has more here.

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It's more than a feeling. According to new data coming out from the research firm Pitchbook and the National Venture Capital Association, venture firms are raising -- and deploying -- a lot less money than in recent years.

What to know: overall deal count in the U.S. has fallen more than 25% between the first quarter of last year and this year. Less than 3,000 deals were closed between the start of the year and the end of March, which doesn't sound so terrible until you realize things haven't been so slow, comparatively, since 2018 (see chart below).

Late-stage deal value also dropped like a boulder in the first quarter. While it's obvious from recent headlines that the era of the "mega round" has come and gone (for now), it's something else to read that late-stage values have declined for the seventh straight quarter to $11.6 billion, according to Pitchbook and the NVCA. The two say that just 19 late-stage mega rounds occurred in the first quarter of 2023, compared with a stunning 98 in Q1 2022.

Unsurprisingly, that slowdown, or right-sizing, or whatever you prefer to call it, has had ripple effects. In the first quarter, per the organizations' findings, the median late-stage, pre-money valuation fell 16.9% from the 2022 full-year figure to $54 million, while the average pre-money valuation declined by more than $100 million to $159 million.

The industry is getting squeezed on all sides.

More here.

LayerZero Labs, a two-year-old Vancouver startup whose messaging protocol lets users send different types of messages between blockchains, like cross-chain interactions, eliminating the need for intermediaries, raised a $120 million Series B round at a $3 billion valuation, a 3X increase over the valuation it received just 13 months ago. Investors included a16z crypto, Circle Ventures, Sequoia Capital, OpenSea, Samsung Next, Christie’s, and BOND. The company has raised a total of $293.3 million. TechCrunch has more here.

TerraPay, a London startup whose platform enables businesses to send and receive payments across borders, raised a $100 million Series B round led by IFC, with additional funds provided by Prime Ventures, Partech, and the U.S. International Development Finance Corporation. The company has raised a total of $161.5 million. More here.

4.screen, a three-year-old Munich startup that develops interactive video screens for customers such as Mercedes-Benz and Audi, raised a $23 million Series A round. S4S Ventures and Continental VC were the investors. Tech.eu has more here.

Fetcherr, a four-year-old Israeli startup that has built a platform that attempts to optimize prices for airfare using AI algorithms, raised a $12.5 million pre-Series B round. Left Lane Capital was the deal lead, while M-Fund also participated. The company has raised a total of $31 million in equity and debt. TechCrunch has more here.

Magenta Mobility, a five-year-old Mumbai startup that operates a fleet of 800 three-wheeled electric cargo delivery trucks, raised a $22 million Series A1 round. Morgan Stanley India Infrastructure and BP Ventures co-led the deal. The company has raised a total of $58.2 million. TechCrunch has more here.

Mojo Vision, an eight-year-old startup based in Saratoga, Ca., that is pivoting to commercialize micro-LED technology originally intended for a smart contact lens product it was developing, raised a $22.4 million round. Investors included Dolby Family Ventures, Liberty Global Ventures, Fusion Fund, Drew Perkins, Open Field Capital, and Edge as well as previous investors NEA and Khosla Ventures. TechCrunch has more here.

Agnostiq, a five-year-old Toronto startup that uses quantum technologies to help organizations solve mission-critical tasks, raised a $6.1 million seed extension round led by Differential Ventures, with follow-on participation from Scout Ventures, Tensility Venture Partners, Boost VC, and Green Egg Ventures. More here.

Apptile, a two-year-old startup based in Palo Alto, Ca., that has built a "no-code" mobile app development platform, raised a $2.5 million seed round. Mankekar Family Office and Ramakant Sharma co-led the deal. EnTrackr has more here.

Billy, a nearly three-year-old outfit that collects, verifies, and tracks compliance documents like business licenses and W9 forms for general contractors, developers, and property managers (it also operates an insurance marketplace for them), has raised $2.5 million in new funding. The capital came from Entrada Ventures and MetaProp and brings the startup's total funding to $6.7 million. TechCrunch has more here.

Coast, a nearly two-year-old, Chattanooga, Tn.-based platform that enables a sales team to demo its company’s APIs via a dashboard that executes live requests visually and in the browser, has raised $2.1 million in seed funding. Backers include Y Combinator, Liquid2 Ventures, GTMfund and Brickyard, as well as individual investors such as Dropbox co-founder Arash Ferdowsi and Segment co-founder Calvin French-Owen. TechCrunch has more here.

Flyby Robotics, a two-year-old, L.A.-based drone automation and delivery company, has raised $4 million in seed funding. The round was led by Mac Venture Capital, with participation from Weekend Fund, Anthemis, and Evening Fund. SiliconAngle has more here.

Hype, a New York startup that develops pre-designed web templates for creators looking to build landing pages, raised a $10 million Series A round led by King River Capital and including Bullpen Capital, Precursor Ventures, Bloomberg Beta, Tapestry VC, and Sterling Road. TechCrunch has more here.

Kashet, a five-year-old London startup that offers a membership-based payments app for private bank clients, raised a $6.7 million round. Investors in the deal included Trifork Lab. TFN has more here.

Magnotherm, a four-year-old German startup that is developing technology to remove environmentally harmful refrigerants, raised a $6.9 million. Extantia Capital led the transaction, with additional participation from Hessen Kapital, Lauda Dr. R. WOBSER Beteiligungs-GmbH, and Revent. The company has raised a total of $11.7 million. TechCrunch has more here.

Ronbow, a twenty-one-year-old company based in Livermore, CA, that has built a platform that helps customers design cabinets and then produce them with no middlemen involved, raised a $10.5 million Series A round led by Celtic House Asia Partners, with AME Cloud Ventures (Jerry Yang's fund) and Harpers Investments also pitching in. The company has raised a total of $10.8 million. TechCrunch has more here.

Teton.ai, a three-year-old Copenhagen startup that claims its platform acts as an AI companion for nurses to help monitor patients and optimize workflows, raised a $5.3 million round. Plural was the deal lead. The company has raised a total of $6.4 million. EU-Startups has more here.

TipHaus, a five-year-old Seattle startup whose software aids businesses in pooling and distributing tips to employees, raised a $3.5 million round led by Fuse, with additional funding provided by Sugar Mountain. The company has raised a total of $4.5 million. GeekWire has more here.

Zealy, a Paris startup that helps web3 and web2 companies engage with their communities by giving them tasks that they can achieve in exchange for various rewards, raised a $3.5 million pre-seed round led by Redalpine, with Connect Ventures, Aglaé Ventures, Kima Ventures, Purple, Station F, Founders Future, and Pareto Holdings also contributing. TechCrunch has more here.

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Lux Capital, known for investing in life science and frontier tech startups, is back in the market to fundraise for its latest vehicle — but this time without a dedicated late-stage entity, observes TechCrunch. The firm is targeting over $1 billion for Lux Ventures VIII, according to meeting materials from the New Mexico State Investment Council for March 28, which committed $62.5 million to the fund. The fund will combine the firm’s early and late-stage investing strategies into one pool. Lux is the latest firm with early-stage roots to ditch a dedicated late-stage fund; Felicis did the same recently. Last month, Y Combinator said it would shut down its continuity fund, pulling back from late-stage investing and letting go of 20% of its team in one move. More here.

Savvy Games Group, a games and esports company that is part of the Saudi government’s Public Investment Fund, has agreed to acquire mobile games studio Scopely for $4.9 billion. Founded in 2011, Scopely is known for several popular mobile games including Yahtzee With Buddies, Star Trek Fleet Command, Marvel Strike Force, Stumble Guys and Scrabble Go. The Los-Angeles based company had a $3.3 billion post-money valuation in 2020 after raising a $340 million funding round. TechCrunch has more here.

Stifel Bank has brought another longtime Silicon Valley Bank exec on board, hiring Minh Le as a managing director following his 14-year career with the fallen outfit. Stifel recently hired three other SVB bankers to help manage its venture lending business. GeekWire has more here.

Investor Chamath Palihapitiya published his annual letter to his shareholders yesterday, suggesting among other things that a "small line of credit" that his firm established for the purpose of generating "incremental returns" backfired in a big way, quickly ballooning as "some of the assets we used to collateralize it saw up to a 70% reduction in price." He added that "[w]hile 2022 was a challenge, the valor and lessons learned came from actually being in the arena, not commenting from the sidelines."

The ChatGPT revolution opens the door to a four-day week by providing a major productivity boost for swathes of jobs, according to Nobel Prize-wining labor economist Christopher Pissarides. The professor at the London School of Economics who specializes in the impact of automation on work believes the the labor market can adapt quickly enough to AI-backed chatbots. Bloomberg has more here.

Twitter has labled NPR's account as "state-affiliated media," which it is not. In related news, the newsletter startup Substack announced a new feature that looks very similar to Twitter as it capitalizes on chaos at the company under Musk's leadership. (We're sitting down with Substack cofounder Hamish McKenzie next week at Startup Grind in the Bay Area, by the way; if you follow the company and have questions for him, lay 'em on us.)

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