Carta backs down, OpenAI says "no deal," and saying goodbye to bad dates

We're back after a brief, two-week hiatus. Did you miss us? (You did a little bit.)

We have news! First, we're thrilled to say that AI investor Sarah Guo of Conviction Capital is now joining us at our StrictlyVC event in San Francisco later this month. As some of you already know, Guo and Elad Gil host an addictive podcast called "No Priors" together, and we're going to be chatting with them both about all things AI. Giant thanks to our much-appreciated partners in the event, including our anchor partner, the global venture firm Felicis, and our generous hosts at Cloudflare. 

If you didn't nab a seat in time for this one (it's sold out), don't fret. We're hosting another StrictlyVC evening on Thursday, February 29 in Hollywood in partnership with Lightspeed Venture Partners, and it's also going to be amazing. In fact, we're very excited to announce that our first speaker is Tekedra Mawakana, the co-CEO of Waymo, which is about to start testing its driverless passenger vehicles on the highway. (Get ready, L.A.!) If you're interested in partnering with us on our L.A. event, let us know. Our colleague Jessica is happy to answer any and all questions. 🥂

In a statement today, OpenAI claimed that The New York Times' copyright infringement lawsuit against it is "without merit." "The New York Times is not telling the full story," OpenAI states. TechCrunch has more here. 

Juniper Networks shares soared more than 20% in extended trading today after the WSJ reported that Hewlett Packard Enterprise is in “advanced talks” to acquire the company for around $13 billion.

How will venture capital change in 2024? Join Affinity on January 23 to find out in a panel discussion featuring Foxe Capital, SaaS Ventures, Intel Ignite. They'll discuss what their survey of 700+ investors reveals about sentiment for the year ahead and how VCs are adapting their strategies to a changing market. Reserve your spot for the webinar now.

Roughly 72 hours after a prominent startup customer complained that Carta was misusing information with which it was entrusted — scaring many of Carta’s tens of thousands of other customers in the process — Carta is exiting the business that landed it in trouble with the customer.

Carta co-founder and CEO Henry Ward posted on Medium tonight that: “Because we have the data, if we are trading secondaries, people will always worry that we are using the data, even if we are not. So we have decided to prioritize trust, and exit the secondary trading business.”

It’s a dramatic turn of events for 14-year-old Carta, which originally focused on cap table management software but began over time to evolve into a “private stock market for companies” to take advantage of the network of companies and investors that already use its platform and into which it has insights. The big idea was to become the transfer agent, brokerage and clearinghouse for all private stock transactions in the world.

While the move made Carta more valuable in the eyes of its venture backers — a company has to scale after all! — it put Carta on dangerous footing after Finnish CEO Karri Saarinen posted on LinkedIn on Friday that Carta was using information about his company’s investor base to try to sell its shares to outside buyers without the company’s knowledge or consent.

Wrote Saarinen, whose project management software company Linear is four years old and a Carta customer: “As a founder it feels kind [of] shitty that Carta, who I trust to manage our cap table, is now doing cold outreach to our angel investors about selling Linear shares to their non disclosed buyers.” Continued Saarinen, “They never contacted us (their customer) about starting an order book for Linear shares. The investor they reached out to is a family member whose investment we never published anywhere. We and they never opted in to any kind of secondary sales. Yet Carta Liquidity found their email and knew that they owned Linear shares.”

While Ward apologized publicly to Saarinen, blaming a rogue employee who “violated our internal procedures and went out of bounds reaching out to customers they shouldn’t have,” Saarinen continued the discussion very publicly, saying he had identified numerous other founders whose investors had also been contacted by Carta representatives without their knowledge.

In his post tonight, Ward downplayed the impacts of ending secondary trading on Carta, saying the revenue derived from the practice is minuscule compared with Carta’s other business offerings. According to Ward, Carta’s cap table business “is about $250M/year, fund administration is about $100M, private equity is about $20M, and the secondary trading business is about $3M.” Carta, he added has done a “decent job of building the cap table business, an ok job at fund admin (but feeling the growing pains), and an abysmal job at the secondary business.”

More here.

Aqua Security, a nine-year-old Tel Aviv- and Boston-based startup that provides cloud security services for customers such as PayPal, Netflix and Samsung, raised a $60 million Series E extension led by Evolution Equity Partners, with previous investors Lightspeed Venture Partners, Insight Partners, and StepStone Group also anteing up. TechCrunch has more here.

Claris Bio, a four-year-old startup based in Jersey City, NJ, that is developing a recombinant human variant hepatocyte growth factor aimed at improving corneal healing in patients with corneal eye diseases, raised a $57 million Series A round. Novo Holdings A/S, RA Capital, Mass General Brigham Ventures, and Janus Henderson Investors invested in the deal. More here.

An unnamed startup founded by former Twitter CEO Parag Agrawal that is building software for developers of large language models, raised a round of approximately $30 million led by Khosla Ventures, with Index Ventures and First Round Capital also pitching in. The Information has more here.

ABL Space Systems, an aerospace and launch service provider based in El Segundo, Ca., has raised at least $40 million as part of a targeted $100 million fundraise, per an SEC filing first flagged by TechCrunch. It’s the first indication that ABL has raised venture funding since October 2021, when the outfit on closed $200 million at a $2.4 billion valuation. More here.

Nabla, a five-year-old Paris startup that has created an AI assistant for doctors that automatically writes clinical notes, raised a $24 million Series B round at a valuation of $180 million, according to TechCrunch. The deal was led by Cathay Innovation, with additional participation from ZEBOX Ventures. TechCrunch has more here.

Recurrent, a four-year-old Seattle startup that provides EV battery analytics to shoppers and car dealerships, raised a $16 million Series A round led by ArcTern Ventures and including Automotive Ventures, Goodyear Ventures, Wireframe Ventures, and Pioneer Square Labs. The company has raised a total of $19 million. GeekWire has more here.

Robin AI, a five-year-old London startup that uses AI to speed up the process of drafting and negotiating contracts as well as extracting information from them, raised a $26 million Series B round. Temasek was the deal lead, while QuantumLight, Plural, and AFG Partners also participated. The company has raised a total of $43.6 million. Tech.eu has more here.

Cleva, a Nigerian startup founded last year that helps African consumers and businesses establish USD-denominated accounts, raised a $1.5 million pre-seed round led by 1984 Ventures, with The Raba Partnership, Byld Ventures, and FirstCheck Africa also contributing. TechCrunch has more here.

Health in Her HUE, a five-year-old New York startup whose app connects women of color with healthcare providers and content that can better address their needs, raised a $3 million seed round led by Seae Ventures, with Johnson & Johnson Impact Ventures, HBCU Founders Fund, Stanford Impact Fund, and Morgan Stanley Inclusive Ventures Labs also taking part. The company has raised a total of $4.2 million. TechCrunch has more here.

Intrinsic, a one-year-old San Francisco startup whose mission is to give safety teams the tools necessary to prevent abusive behavior on their products, raised a $3.1 million seed round. Investors included Urban Innovation Fund, Y Combinator, 645 Ventures, and Okta. TechCrunch has more here.

Patchworks, a nine-year-old startup based in Nottingham, UK, that helps retailers connect and manage different data streams, raised a $2.2 million round. Gresham House Ventures led the investment. The company has raised a total of $13.4 million. More here.

QuantHealth, a three-year-old Tel Aviv startup that helps researchers maximize the success of their clinical trials, raised a $2 million Series A extension led by Accenture Ventures. CTech has more here.

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Here, a three-year-old Miami startup that operated a fractional short-term vacation rental marketplace, is closing its doors. The company raised at least $5 million from investors such as Fiat Ventures. TechCrunch has more here.

Cabana, a five-year-old Seattle startup that rented out its custom-built camper vans for approximately $200 per night, is shutting down. The company previously raised a total of $16.5 million from the likes of Craft Ventures, Goldcrest Capital, Nordic Eye, and Jason Calacanis. Geekwire has more here.

On Saturday, The Wall Street Journal published an intriguing piece questioning whether Elon Musk's alleged consumption of LSD, cocaine, ecstasy, mushrooms, and ketamine poses a risk to his businesses and particularly SpaceX, which depends on billions of dollars in government contracts. Yesterday, Musk responded that he had endured frequent randomized drug tests for the last three years and had been uniquely successful. "Whatever I’m doing, I should obviously keep doing it!” he tweeted.

Twilio founder Jeff Lawson today said he would step down as CEO and board member at the enterprise communications software company, as the company continues to grapple with two activist investors.

Breakout Ventures, the San Francisco-based, bioscience-focused venture firm, has promoted Dana Watt, Ph.D. to partner and Nima Ronaghi, Ph.D. to principal. More here.

The venture firm Northzone, headquartered in London, has announced some promotions of its own, including: Michelle Nacouzi has been promoted to principal in New York; Pascual Cortes-Monroy has been promoted to VP in London; Aaron Liu has been promoted to VP in New York; and Dominik Esen has been promoted to VP in Stockholm. More here.

Unity Software, the publicly traded, San Francisco-based videogame software provider, is cutting 1,800 employees, one quarter of its total staff.  “We are … reducing the number of things we are doing in order to focus on our core business and drive our long-term success and profitability,” CEO Jim Whitehurst wrote in a memo.

Pitch, a six-year-old German startup that has developed collaborative presentation software for businesses, is sacking its CEO and laying off two-thirds of its workforce. Pitch has raised a total of $130 million from investors such as Lakestar, Index Ventures. and Tiger Global Management. TechCrunch has more here.

Flexe, a Seattle warehouse and logistics startup that raised a $119 million Series D round at a $1 billion valuation in 2022, is laying off 38% of its employees. Flexe's investors include Activate Capital, Madrona Venture Group, Prologis Ventures, Redpoint Ventures, T. Rowe Price, Tiger Global, and BlackRock.

London- and Dublin-based Frontline Ventures is looking to add two associates to its seed investing team. Apply here.

Could generative AI make "know your customer" processes effectively useless?

The American Dialect Society's Word of the Year for 2023 - "enshittification" - was created by writer Cory Doctorow to describe how digital platforms can become worse and worse.  

Get ready to have your world turned Upside Down: the fifth and last season of Stranger Things officially started production today.

The obscure song that a capella groups just can't quit.

Tired of bad dates? You deserve more - you know it, your friends know it, your family knows it. Try this heirloom variety box of rare and unusual dates and never be disappointed again. 

Volkswagen announced today at CES that it will roll out ChatGPT in a number of its cars. Sadly, this feature will not be available in the U.S., although VW said that it "is being considered for the United States."

Hugh Hefner's smoking jacket and pajamas are up for auction. (Captain hat not included.)

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