FTX management recovers $7B, Stability AI loses more execs, and a disillusioned AI researcher at Google returns

Just a quick mention that we'll soon be transit for some work halfway around the world, so the delivery times of these missives might get even stranger. Also, please note starting one week from today, we're shutting this thing down for two weeks for a staycation. Longtime readers know we lean into being a lazy blob once a year before the rest of you start coming back from your summer vacations. We'll resume publication on Monday, July 17.  We'll mention this another time or two this week so we're all on the same page (har, har, get it, because StrictlyVC is basically one giant daily tip sheet). More tomorrow, hopefully.

FTX's new management says it has recovered $7 billion in liquid assets.

The WSJ looks at the Sequoia Capital breakup, writing that behind the scenes, there was friction between the U.S. and China arms that dates back. "Sequoia’s rainmaker China chief, Neil Shen, for one, had lost out in a succession battle to lead the group. He didn’t work as closely with the new leadership, was dismayed by recent financial losses from the U.S. side and had talked for years about striking out on his own," says the outlet, citing people familiar with the matter.

It's official. On the heels of a Bloomberg report that a deal might happen, IBM has agreed to buy 16-year-old software company Apptio as part of a deeper push into automation technology. The price it's paying to current owner Vista Equity Partners is $4.6 billion, which is a nice return for the PE firm (it bought Apptio in 2019 for $1.94 billion). Apptio sells online services that help manage information-technology budgets, forecasting and analysis. CNBC has more here.

Research: the state of venture capital in 2023. While the slowdown began in 2022, the collapse of Silicon Valley Bank in early March shook the venture industry and shined a brighter-than-ever light on the space. To go beyond the headlines, Juniper Square surveyed nearly 100 venture capital investors about their concerns, plans, and focus areas for the rest of the year. See what they had to say about the state of the industry. Download The State of Venture Capital: 2023 Benchmark Survey now.

Last week, we talked with Kindred Ventures, a small, nine-year-old, San Francisco-based early stage venture firm that, despite investing in a lot of nascent startups — more than 100 to date — takes a generalist approach, investing in AI, climate tech, consumer internet companies, crypto deals, fintech startups, health startups, mobility startups and the outfits developing tools and infrastructure.

It’s a little like trying to boil the ocean. Still, the firm’s two managing directors — Steve Jang and Kanyi Maqubela — have had enough success that Kindred’s investors last year agreed to let them up the ante considerably. After closing a $56 million fund in 2019 and a $101 million fund in 2021, Kindred last year closed a $200 million fund, as well as a $112 million later-stage fund to back growth-stage companies in Kindred’s own portfolio and outside it. The capital more than doubled their assets under management, which is currently around $550 million, including some special purpose vehicles that they have assembled along the way.

The appeal is understandable. Though the outfit’s biggest wins to date — Uber, Coinbase, Postmates — have come from an angel fund, Kindred has proven its ability to get into interesting deals. Indeed, among its newer bets is Humane, a buzzy, still-stealth startup founded by former Apple team Imran Chaudhri and Bethany Bongiorno that received a seed investment from Kindred, which then went on to lead the company’s $100 million Series C round in March.

We talked about a range of things with Jang and Maqubela, and we’ll have a podcast from that chat available soon; in the meantime, excerpted below is part of our discussion that centered on the future of startups, and whether the ongoing advancements in AI will mean more of them, or far fewer.

TC: Because people are so interested in all things AI right now, can you talk a bit about the companies that you have funded?

SJ: We’ve focused a lot on frontier technology over time, and going after 10- to 20-years-story-arc companies. Humane is one of them. We’ve invested in a company called Hourone AI, which is a video AI company out of Tel Aviv in Israel. We’re early investors in Tonal, which has used a lot of computer vision and machine learning historically and is now upgrading a lot of what it’s doing in that area and bringing forward a lot of AI-related features. We have companies that are in robotics; we have companies in supply chains. They’re all tapping into the opportunity that they’re seeing, with not only generative AI but industrial AI, too.

On the generative AI front, there are these foundation model companies, as well as, right now, many more application layer companies, hardware companies, infrastructure and tooling companies. But over time, it’s still not clear to me whether we’ll have four companies in the world or four bazillion, given how empowering AI appears to be.

More here.

Mypinpad, an 11-year-old company based in Cardiff, Wales, that develops payments and identity authentication software designed to authenticate and accept card payments, raised a $13 million round. Crossfin Holdings was the deal lead. The company has raised a total of $68.1 million. Silicon Canals has more here.

NVision Imaging, an eight-year-old German startup whose focus is on fashioning MRI polarizers and hyperpolarized imaging agents, raised a $30 million Series A round led by Playground Global, with B-to-V, Pathena Investments, Entree Capital, Lauder Family, ES Kapital, and Sparkassenkapital Ulm also contributing. The company has raised a total of $52.2 million. CTech has more here.

Omeat, a five-year-old Los Angeles startup that grows meat from the plasma of free-roaming herd cows, announced that it raised a $40 million round last year. S2G Ventures, GV, Bold Capital Partners, Tyson Ventures, Rethink Food, Trailhead Capital, and Cavallo Ventures all contributed. TechCrunch has more here.

Utu, a Singapore startup that distributes a card that offers benefits to duty free shoppers, raised a $33 million Series B round. SC Ventures was one of the investors. TechCrunch has more here.

1MT Nation, a three-year-old startup based in Tallin, Estonia, that restores degraded lands in Africa and allows companies to invest in carbon removal projects, raised a $1.1 million round. Investors included Warmeston OÜ and Margus Kohava. EU-Startups has more here.

Adamo Foods, a two-year-old London startup that is creating plant-based whole-cut meats using fermentation technology combined with mycelium, raised a $1.9 million round. SFC Capital and Innovate UK were the deal leads. The company has raised a total of $2.5 million. Tech.eu has more here.

Lilz, an Okinawa, Japan-based startup that builds battery-powered smart cameras that can read meters remotely, has raised $4.1 million in seed funding as it enters the North American market. Backers in the round include JIC Venture Growth Investments, Mitsubishi UFJ Capital, Tokyo Century, Dimension Fund, Okinawa Development Finance Corporation, Okinawa’s Science and Technology Development Center, and Dogan Beta. TechCrunch has more here.

Neutron, a crypto startup that is working on smart contract technology, raised a $10 million round co-led by Binance Labs and CoinFund, with Delphi Ventures, LongHash, and Nomad also contributing. Decrypt has more here.

Raincoat, a three-year-old Puerto Rico startup that develops white-label climate insurance products focused around specific weather events, raised a $6.5 million round led by TwoSigma Ventures, with additional participation from Mundi Ventures, Revolution’s Rise of the Rest Seed Fund, and EleFund. The company has raised a total of $11.2 million. More here.

SOS, a six-year-old Boston startup that manages vending machines that dispense personal care and wellness products from popular brands, raised a $7.6 million round. Wasserman Ventures and Urban Us Capital were the co-leads. The company has raised a total of $11 million. More here.

These five dealmaking benchmarks will reveal how your firm's performance stacks up against the competition. Explore Affinity's infographic today.

Arkam Ventures, a Bengaluru-based venture firm, is looking to raise up to $180 million for its second fund, nearly doubling the size of its maiden fund, as it looks to address the "middle India" opportunity. Arkam was cofounded by two investors who previously worked at Kalaari Capital and Helion, respectively. TechCrunch has more here.

Frst, a Paris-based venture firm, has held a first close for a fund that's targeting €100 million (it has garnered €72 million in capital commitments so far). The team -- led by Pierre Entremont and Bruno Raillard -- originally met when they were working for Otium Venture as part of Pierre-Edouard Stérin’s family office, and they spun out on their own in 2019. TechCrunch has more on their newest plans here.

Offline Ventures, the Mill Valley, Ca.-based venture firm co-founded by entrepreneur-investors Dave and Brit Morin, is raising up to $100 million for its second fund, per an SEC filing first flagged by Axios. We talked with the two in 2021 when they launched their debut fund with $100 million in capital commitments, with Apple as its anchor investor. More here.

Palmer Luckey's Anduril Industries is purchasing a rocket-engine business to supply motors used in missiles, reports the WSJ. The venture-backed company is acquiring Adranos, an Indiana-based company developing a new solid rocket motor for conventional and hypersonic missiles. The companies didn’t disclose the terms of the deal. The "move shows how Anduril, which already has drones deployed in Ukraine, is taking a bigger swing at the military market as Pentagon contractors attempt to expand production to meet demand following Russia’s invasion last year," notes the outlet.

Databricks, a 10-year-old, San Francisco-based unified data analytics platform, will pay $1.3 billion to buy MosaicML, a two-year-old, San Francisco-based startup with neural networks expertise that has built a platform for organizations to train large language models and deploy generative AI tools. MosaicML had raised just under $64 million from investors, including DCVC, AME Cloud Ventures, Lux, Frontline, Atlas, Playground Global and Samsung Next. Databricks has meanwhile raised $3.5 billion dollars (as of 2021) and was valued during its last round of funding at $38 billion. TechCrunch has more on this new deal here.

ThoughtSpot, an AI-powered analytics platform last valued at $4.5 billion, say it has entered into a definitive agreement to acquire Mode Analytics, a business intelligence startup, for $200 million in cash and stock. Mode was co-founded in 2013 by three former colleagues at Yammer who were early employees of the company and stayed on after its acquisition by Microsoft. It went on to raise $81 million in venture capital, including from H.I.G. Growth Partners, Valor Equity Partners and Rev. TechCrunch has the story here.

Finance automation company Ramp has acquired Cohere.io, a startup that built an AI-powered customer support tool, the companies told TechCrunch earlier today. Founded in 2020, New York-based Cohere.io -- not to be confused with Cohere, another AI startup that recently raised capital, notes TC -- raised $3.1 million in a seed funding round led by Initialized Capital, later tacking on another $400,000 in funding. Other backers include Y Combinator, BoxGroup, Soma Capital, Shrug Capital and Chapter One. 

Apogee Therapeutics, a seven-month-old, San Francisco- and Waltham, Ma.-based based developer of monoclonal antibodies for inflammatory diseases, filed for an initial public offering. The outfit spun out of Paragon Therapeutics, itself a nascent company that launched just last year. FierceBiotech has more here.

Jacob Devlin, a prominent AI researcher who left Google for rival OpenAI in January after complaining internally about how the company trained its Bard AI chatbot software, has reportedly returned to his old job. 

John Goodenough, the scientist who shared the 2019 Nobel Prize in Chemistry for his crucial role in developing the revolutionary lithium-ion battery, has passed away at age 100. More here.

Stability AI, the closely watched AI startup, has lost at least two top executives in recent weeks, including its head of research and chief operating officer. David Ha, head of research for the London-based startup, resigned this month. Chief Operating Officer Ren Ito was “let go,” CEO Emad Mostaque tells Bloomberg. Meanwhile, the outlet notes, Christian Cantrell, who joined Stability AI as VP of product in October after working at Adobe for 20 years, left in March.

It isn't just Mark Zuckerberg who's learning jiu-jitsu.

Goldman Sachs has started cutting managing directors across the globe as the firm reduces its headcount amid a deals slump; according to Bloomberg, about 125 MDs, including some in investment banking, will lose their job. 

Gerson Lehrman Group, which connects clients with a network of industrial experts, is reportedly laying off employees in China as Beijing intensifies scrutiny of the sector on national security grounds. The FT has the story.

Robinhood is laying off another 7% of its staff, or around 150 employees, marking the third round of layoffs that the brokerage firm has conducted since April 2022, reports the WSJ.

Google DeepMind’s CEO Demis Hassabis tells Wired that the company's next  algorithm -- a system called Gemini that will tap techniques that helped AlphaGo defeat a Go champion in 2016 -- will eclipse ChatGTP. Hassabis says the process will take a number of months and could cost tens or hundreds of millions of dollars. Meanwhile, notes Wired, Gemini could play a major role in Google’s response to the competitive threat posed by ChatGPT and other generative AI technology. More here.

Generative AI models are changing the economy of the web, making it cheaper to generate lower-quality content. We’re just beginning to see the effects of these changes, observes The Verge.

Major global law firms are increasingly looking to Saudi Arabia to lift their fortunes, reports the Financial Times. Kirkland & Ellis is reportedly considering opening up shop in the kingdom; Latham & Watkins, Greenberg Traurig, and Squire Patton Boggs already have outposts there.

A quick look at the state of buy-now-pay-later, where revenue is still booming -- but profits are not.

Jenna Lyons, unlikely housewife.

The true history of "Custer's Last Stand."

Free Agent Kyrie Irving Excited to Alienate All Potential Options. 🏀

Steve McQueen's preferred shades, the Persol 714SM.

Hermes nail polish. 💅

This is an ad for photography…but you’ll have to imagine that, because there are no photographs in StrictlyVC ads. Bart Nagel has been photographing Silicon Valley legends and up-and-comers since before the dot-com boom—and through crypto. From high-flying adventurers Larry Ellison and Richard Branson, then-n00bs Larry and Sergey, and the PayPal gang, to newer unicorns like Discord and Oculus, he’s the guy who CMOs trust to photograph their VIPs. Have your people contact his… er, him at bart@bartnagel.com.