Trouble at M12, Tiger Global preps a strip sale, and a home sales record in California gets shattered (again)

Friday. ✌️

Before we grab our air guitar and needlessly kick something over, we leave you with the latest StrictlyVC Download. This week, we talked with Gary Marcus, an emeritus professor at NYU who was part of an historic hearing in Washington this week, wherein Marcus, OpenAI CEO Sam Altman, and IBM's Chief Privacy and Trust Officer, Christina Montgomery, talked with the Senate Judiciary Committee about what each thinks needs to be done to ensure that society can live safely with increasingly advanced AI. 

We published excerpts of our chat with Marcus yesterday, but here, you'll hear more about what Marcus thinks the actual risks are today, why he has a long-standing beef with Meta's AI Research Director Yann LeCun (who is also affiliated with NYU), and the reason Marcus thinks we're headed toward a "Black Mirror" moment. We were a little bleary (we got up with the chickens for this one) but we enjoyed it; we hope you will, too.

Giant thanks to the team at the financial technology company Mercury for sponsoring this week's podcast. Mercury says that through its partner banks and their sweep networks, its customers can access up to $5 million in FDIC insurance, which is 20 times the per-bank limit. Mercury caters to startups of all sizes; check out mercury.com to learn more.

Federal Reserve Chair Jerome Powell said today that inflation continues to be “far above” the central bank’s target but that policymakers “haven’t made any decisions” about whether to raise rates at their next meeting next month. The New York Times has more here.

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Hashkey Group, a five-year-old Hong Kong startup that operates a virtual asset trading platform, is reportedly in the market to raise $100 million at a $1 billion valuation, according to Bloomberg. It has more here.

Kyoto Fusioneering, a four-year-old Tokyo startup that is developing fusion reactor technology, raised around $79 million in Series C funding from 17 investors, including Inpex, Mitsubishi Corp., and Mitsui & Co. The company has raised a total of $94.4 million. Marketwatch has more here.

Restaurant365, a 12-year-old outfit based in Irvine, Ca., whose software helps restaurants with accounting, analytics, staff, and inventory management, raised a $135 million round co-led by KKR and L Catterton, with previous investors Iconiq Growth and Bessemer Venture Partners also taking part.The company has raised a total of $288 million. TechCrunch has more here.

Odyssey, a five-year-old startup based in Boulder, Co., that provides tools that help renewable energy companies in emerging markets manage their projects more effectively, raised a $15 million Series A round led by Union Square Ventures and including Equal Ventures, Twelve Below, Transition, Equator, MCJ Collective, Abstract Ventures, Founder Collective, and Climate Venture Capital. More here.

Sabi, a three-year-old Lagos startup that supplies African SMBs with credit, logistics, and payments software, raised a $38 million Series B round at a $300 million valuation from CommerzVentures, Norrsken22, Fluent Ventures, Proof VC, CRE Ventures, and Jaango. The deal valued the company at $300 million. Sabi has raised a total of $66 million. TechCrunch has more here.

Stathera, a Montréal startup that is developing MEMS timing for applications such as wearables, IoT devices, and smartphones, raised a $15 million Series A round co-led by Deep Tech Venture Fund and Celesta Capital, with MediaTek, Seiko Epson, and TXC also anteing up. More here.

Flintpro, a nine-year-old startup based in Canberra, Australia, whose visualization tool lets companies track emissions and measure the validity of their sustainability claims, raised a $9 million Series A round led by Understorey Ventures, with Pollination, Persei Venture, and previous investors Ananta-OM and Synovia Capital also contributing. Business News Australia has more here.

Lumeus.ai, a startup based in San Jose, Ca., whose zero-trust platform employs AI and machine learning to help companies manage security on-premises and in the cloud, raised a $6 million seed round led by Tola Capital, with previous investors Emergent Ventures and First Rays Ventures also chipping in. SiliconANGLE has more here.

Manifest Cyber, a startup based in Westport, Ct., that allows companies to generate, collect, and monitor their software bill of materials, raised a $6 million seed round led by First Round Capital and also backed by XYZ, Palumni VC, Homebrew, BoxGroup, Silver Buckshot, Twelve Below, and Huge if True Ventures. SecurityWeek has more here.

Orbital Witness, a six-year-old London startup that is developing software to automate the paperwork involved in property transactions, raised a $9.3 million Series A round led by Parker89, with LocalGlobe, Outward VC, Seedcamp, Portfolio Ventures, and Realty Corp. also piling on. The company has raised a total of $13.8 million. EU-Startups has more here.

PYOR, a one-year-old startup based in Wilmington, De., that provides tools that enable institutional investors to research, trade, and manage digital assets, raised a $4 million seed round led by Castle Island Ventures, with additional investment from Hash3, Antler, Future Perfect Venture, Force Ventures, CoinSwitch Ventures, and Coinbase Ventures. More here.

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New York's Insight Partners has raised a fund to help it hold on to stakes in companies held by six older vehicles. The New York-based firm, which manages $75 billion in assets, rounded up $1.3 billion to buy stakes in the software companies from the vehicles Insight originally used to acquire them, according to a statement seen by The WSJ. 

The Boston-based venture firm LRVHealth says it has garnered $200 million in capital commitments to invest in healthcare startups, with a focus on connecting industry incumbents with digital health entrepreneurs. The fund is the firm's fifth and largest vehicle to date. FierceBiotech has more here.

China’s Qiming Venture Partners yesterday said it had closed its seventh renminbi fund at 6.5 billion yuan ($940.4 million), in what it said is the largest renminbi fundraising in China’s venture capital market this year. Reuters has more here.

After a years-long buying spree in the VC market, Tiger Global has been playing the role of seller. Specifically, according to Pitchbook, the New York-based crossover investor has hired Evercore to shop a so-called strip sale in the secondary market to liquidate a curated portfolio of mid- and late-stage VC-backed companies. The firm hopes to sell interests in its private holdings to return some liquidity to LPs, as first reported by the Financial Times earlier this week. More here.

Changes at Microsoft's M12 venture capital fund have created months of internal strife, including an executive exodus and a complaint of misconduct, according to Business Insider, which says it talked with half a dozen current and former employees of the firm. BI says it's holding off on reporting some allegations, but says the turmoil stems from M12's transformation at the beginning of this year from an outfit modeled after an independent venture firm that pursued a range of ambitious bets into a more traditional corporate strategic fund that is focused more narrowly on startups that help boost Microsoft's ecosystem. The organization also reportedly tweaked employees' "carried interest" compensation, meaning the percentage of profits on returns that employees can earn.

FTX and sister trading unit Alameda Research are suing ex-CEO Sam Bankman-Fried and two other former execs over the acquisition of stock clearing company Embed last year. The lawsuit alleges that they overpaid, and while Embed's former shareholders, including its founder and CEO Michael Giles, re not accused of wrongdoing, Giles personally saw $157 million from the acquisition. The bankrupt crypto exchange is now seeking to claw back more than $240 million it paid, saying former FTX insiders did no investigation before buying the essentially worthless bug-ridden software platform. Axios and Reuters have more here and here.

In 2021, Marc Andreessen and his wife set a sales record for the state of California, buying a Malibu compound with seven oceanfront acres that sold for $177 million, according to the WSJ. Now, Jay-Z and Beyoncé have shattered it, paying $200 million for a 40,000-foot concrete compound that's also in Malibu.The Los Angeles Times says the agent who handled both sides of the deal could not be reached today (because he was probably knee-deep in a cocaine celebration). More here.

James Gorman, Morgan Stanley’s chief executive, told a shareholder meeting today that he plans to step down from the bank’s top job “at some point in the next 12 months,” bringing to a close the tenure of one of the longest-serving bank chiefs on Wall Street. He did not identify a successor, according to the New York Times, but reportedly said he had “no plans to go out like Logan Roy" in the hit series "Succession."

Speaking of Marc Andreessen, Jeff Jordan says in a blog post that he is stepping back from making new investments at Andreessen Horowitz nearly a dozen years after joining the firm and leading such consumer-focused deals as Airbnb, Fanatics, Instacart and Pinterest. As for why he's leaving, he suggests he has absorbed most of what he was going to learn at the firm ("the learning curve has started to shallow") and hints he isn't diving anything into immediately. Axios has more here.

The nation’s leading paging company, Spok, says it has 800,000 pagers in use across the country, down from 6.6 million pagers in use in 2004. Still, die-hard fans refuse to let go. More in the WSJ.

An Austin accelerator made big claims; employees and customers say it was mostly a lie.

Everything known right now about Instagram’s Twitter clone, due this summer.

Two Wall Street heavyweights are locked in a bidding war for bankrupt cryptocurrency lender Celsius Network, says the WSJ. It reports that Apollo Global Management and senior executives at distressed-debt specialist Fortress Investment Group are each backing competing groups that aim to restart Celsius under new management. More here.

Apple has restricted the use of ChatGPT and other external AI tools for some employees as it develops its own similar technology, according to the WSJ. Per a document viewed by the outlet, Apple is concerned workers who use these types of programs could release confidential data. Apple also told its employees not to use Microsoft-owned GitHub’s Copilot, which automates the writing of software code, the document said. An OpenAI spokeswoman pointed the WSJ to an announcement last month where the company introduced the ability for users to turn off their chat history, which OpenAI said would block the ability to train the AI model on that data, but that apparently means bupkis to Apple. (Like Andy Grove once said, or wrote -- whatever -- only the paranoid survive.) More here.

Dress sneakers in the oval office? (Quel scandale, says GQ.)

Oh, you are going to love camping.

RIP, Jim Brown.

A Billionaires’ Row pad with the new low price of just $130 million.

A compact cinema camera for just under $10K.

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