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Top News
Mark Zuckerberg faced fresh criticism today as nearly three dozen people who worked at Facebook in its early years called out his decision to leave Donald Trump’s aggressive posts on the site unaltered. The former employees said in an open letter that his position was a “betrayal” of Facebook’s ideals. The Times has it here.
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One Way to Change the Startup Equation: Make Wider Access to Capital Mandatory
As protests continue across the U.S. and beyond, there has been chatter this week in Silicon Valley and the venture industry more broadly about race and which venture firms have done a better job of diversifying their ranks and founder bets. There have been mea culpas, promises by firms to hold themselves more accountable, vows to “listen and learn.” SoftBank and Andreessen Horowitz have even announced new funds to invest in startups led by founders of color.
It’s heartening to see, but these efforts will only go so far in leveling the playing field for people who’ve largely been left out of the trillions of dollars of economic value produced by the global startup ecosystem. Let’s face it, the vast majority of VCs, like other business leaders, tend to forget about diversity when they aren’t being questioned about it.
In fairness, inertia is powerful. It's also the case that venture teams are more fragile than they might appear to outsiders, so changing their composition isn't an overnight exercise. Still, the bigger obstacle is really perception: Investors won't say it publicly, but many don't buy the argument that diversity generates returns. They need proof.
One surefire way to get it? Legislation.
Consider that already, most VCs today sign away their rights to invest in firearms or alcohol or tobacco when managing capital on behalf of the pension funds, universities, and hospital systems that fund them. What if they also had to agree to invest a certain percentage of that capital to founding teams with members from underrepresented groups? We aren’t talking about targets anymore but actual mandates. Put another way, rather than wait for venture firms to organically develop into less homogenous organizations — or to invest in fewer founders who share their gender and race and educational background — alter their limited partner agreements.
It may sound extreme, but study after study has shown that diversity pays dividends. Need one from an Ivy League economist to be persuaded? Try Paul Gompers of Harvard Business School, who has examined the decisions of thousands of venture capitalists and tens of thousands of investments in recent years and found that “diversity significantly improves financial performance on measures such as profitable investments at the individual portfolio-company level and overall fund returns,” as reported by HBR.
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Massive Fundings
Bigfoot Biomedical, a nearly six-year-old, Milpitas, Ca.-based developer of digital devices that help people with diabetes manage their condition, raised $55 million in Series C funding. Abbot Labs led the round, joined by Smile Group and earlier backers Quadrant Capital Advisors, Senvest Capital, Janus Henderson, and Cormorant Asset Management. More here.
MGI Tech, a four-year-old, Shenzhen, China-based affiliate of Chinese genome sequencing company BGI Group, has raised over $1 billion in Series B funding. Beijing-based IDG Capital led the round. DealStreetAsia has more here.
Nice Tuan, a two-year-old, Beijing-based group buying e-commerce platform also known as Shihuituan, has raised $81.4 billion in Series C1 funding led by GGV Capital. The company had closed a separate round of $80 million in January. DealStreetAsia has more here.
Nodthera, a four-year-old, U.K.-based biotech that's developing medicines designed to curb inflammation that flares up in diseases affecting the brain and other organs, has raised $55 million from Novo Holdings, Cowen Healthcare, and Sanofi Ventures. More here.
Varo Money, a three-year-old, San Francisco-based digital bank, has raised $241 million in Series D funding. Gallatin Point Capital and The Rise Fund led the round, joined by U2's Bono, operator and investor Jeff Skoll, HarbourVest Partners and Progressive Insurance. TechCrunch has more here.
Big-But-Not-Crazy-Big Fundings
Cutover, an eight-year-old, London-based cloud-enabled work orchestration platform, has raised $17 million in Series A funding from Barclays and Index Ventures. SiliconAngle has more here.
LanzaTech, a 15-year-old, Chicago-based biotech that converts greenhouse gas emissions from steel mills and other industrial facilities into ethanol, a renewable fuel and chemical feedstock, has raised $50 million in funding from Suncor Energy, All Nippon Airways, and Mitsui & Co., (and a separate $14 million grant from the US Department of Energy). It's using the capital to launch a new spinout company called LanzaJet to produce sustainable aviation fuel in an effort to decarbonize in the industry. Built in Chicago has more here.
PlushCare, a seven-year-old, San Francisco-based virtual primary care platform, has raised $23 million in Series B funding led by Transformation Capital, with participation from GGV Capital, WTI, and others. More here.
Tae Life Sciences, a three-year-old, Foothill Ranch, Ca.-based radiation therapy company focused on treating cancers, has raised $30 million in Series B funding, including from Artis Ventures. More here.
Smaller Fundings
Anvil, a two-year-old, San Francisco, Ca.-based business process automation platform, has raised $5 million in Series A funding. Gradient Ventures led the round, with participation from Citi Ventures, Menlo Ventures, Financial Venture Studio and 122 West. Crunchbase has more here.
BlackCart, a three-year-old, Toronto-based fashion and e-commerce startup, is coming out of beta with $2 million in seed funding led by Struck Capital, with participation from 500 Startups, Revel Partners, and Dean Bakes, a principal at M3 Ventures. BetaKit has more here.
Energysquare, a six-year-old, Paris-based startup that says its patented wireless charging technology overcomes the downsides of current wireless charging solutions, such as overheating and energy loss, has raised €3 million ($3.4 million) in funding. Partech led the round. Tech.eu has more here.
Good Monday, a two-year-old, Copenhagen-based workspace management startup, has raised $4 million led by Firstminute Capital, with additional backing from earlier investors Creandum, Seed Capital, and Preseed Ventures. EU Startups has more here.
Lili, a two-year-old, New York-based startup that says it's building banking products to meet the needs of freelance workers, has raised $10 million in seed funding. Group 11 led the round, joined by Foundation Capital, AltaIR Capital, Primary Venture Partners and Torch Capital. TechCrunch has more here.
Magic, a two-year-old, San Francisco-based startup that has built a customizable, passwordless login solution, just raised $4 million in a seed funding round led by Placeholder. Other participants in the round include Lightspeed Venture Partners, SV Angel, Social Capital, Cherubic Ventures, Volt Capital, Refactor Capital, Unusual Ventures, and individual investors. TechCrunch has more here.
Meditrina, a four-year-old, San Jose, Ca.-based women’s healthcare company whose medical device system was created to treat intrauterine pathologies such as polyps and fibroids, has raised $10 million in funding led by Deerfield Management Company. More here.
Nesto, a two-year-old, Montreal, Quebec-based online mortgage marketplace, has raised $8.5 million in Series A financing. BetaKit has more here.
Overjet, a two-year-old, Cambridge, Ma.-based startup using AI to help dentists and insurance companies understand dental scans, has raised $7.9 million in seed funding from investors including the Harvard Innovation Lab. More here.
Poka, a six-year-old, Quebec-based connected worker platform for manufacturers, has raised $6.4 million in funding led by SE Ventures. More here.
Re-Vana Therapeutics, a four-year-old, Belfast, Ireland-based drug delivery company that's developing sustained-release therapeutics for ocular diseases, has raised $3.3 million in pre-Series A funding. Investors included ExSight Ventures, Visionary Ventures, InFocus Capital Partners, TechStart Ventures, Clarendon Fund Managers and Qubis. More here.
Shorla Pharma, a two-year-old, Tipperary, Ireland-based specialty pharmaceutical company, has raised $8.3 million in Series A funding led by Seroba Life Sciences. More here.
Vara, a two-year-old, Berlin-based AI company focused on breast cancer screening accessibility, has raised $7 million in Series A funding. OMERS Ventures led the round, joined by Merantix, Think.Health, Soleria Capital, and Plug and Play. VentureBeat has more here.
Vetty, a four-year-old, New York-based maker of employee verification software, raised $4 million in seed funding led by 3Lines VC. More here.
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New Funds
Venture firm Andreessen Horowitz announced today in a blog post that it is launching a fund designed to invest in underrepresented and underserved founders. The Talent x Opportunity (TxO) fund, which a16z says was in the works for six months, starts with $2.2 million in donations from the firm’s partners. TxO will be invested in a small group of seed-stage startups the first year and expand in size going forward. TechCrunch has more here.
Japanese conglomerate SoftBank today launched the Opportunity Growth Fund, which “will only invest in companies led by founders and entrepreneurs of color,” according to an internal memo from SoftBank’s COO Marcelo Claure about the new fund. Claure said the fund will initially start with $100 million. TechCrunch has more here.
MassMutual Ventures, the corporate venture arm of Massachusetts Mutual Life Insurance Co., has received its third $100 million allocation to invest in early-stage startups in North America, Europe and Israel, reports the WSJ. One of the most active investors in insurtech of the past decade,MassMutual Ventures is seeing fewer interesting early-stage startups to back in the sector than it did when it first began investing in 2014, Doug Russell, managing director and head of the firm, tells the outlet.
Meritech Capital Partners, the 21-year-old, Palo Alto, California, based venture capital firm that invested in Datadog and Salesforce.com before they went public, has raised $800 million for its seventh fund. Bloomberg has more here.
Francisco Partners has raised nearly $10 billion across three funds to invest in technology companies, one of the largest pools of capital collected by a U.S. private equity firm this year.
The money includes $7.45 billion for the firm’s sixth flagship vehicle, $1.5 billion for a fund targeting smaller deals and $750 million for its debut credit strategy. The. WSJ has more here.
A six-year-old Israel-based company-building venture group, today announced the launch of Team8 Capital, a new venture capital fund. Initially focusing solely on building cybersecurity companies, Team8 now says it is focusing on enterprise technology startups with a focus on data, AI and cybersecurity. Team8 did not disclose any financial details about the fund but according to forms submitted to the SEC it has already received commitments for $104 million. Globes has more here.
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IPOs
Unity Technologies, a developer of graphics software used to design video games, is working with financial advisers to prepare for a U.S. listing that could take place later this year and could happen as early as this fall, according to Bloomberg's sources. More here.
Warner Music Group stock popped 8% on its Nasdaq debut today, after the world’s third-largest recording label sold shares in its $1.9 billion IPO toward the higher end of its target. The deal is the biggest U.S. listing so far in 2020. Reuters has more here.
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Exits
Cruise, the self-driving car developer that is majority owned by General Motors, has acquired a producer of high-resolution radar sensors for cars, says The Information. Astyx is a Munich, Germany-based spinoff of Daimler's aerospace unit that was launched as a separate company in 1997, backed by private investors. It has 60 employees. Terms of the deal aren't known. More here.
The women’s digital health platform Maven, which recently raised $45 million in Series C funding, has acquired a parent-child relationship app, Bright Parenting, for an undisclosed sum. As part of the deal, Bright Parenting’s app will be embedded into Maven’s upcoming pediatrics and parenting program. MobiHealth News has more here.
The publicly traded hybrid cloud data services company NetApp has agreed to acquire the 150-person Israeli cloud services company Spot.io for what Calcalist reports is $450 million. Spot.io, incorporated as Spotinst, has raised $52 million from investors, including Highland Capital, Intel Capital, and Vertex Ventures Israel. More here.
French luxury goods group LVMH's $16.2 billion takeover of Tiffany & Co is looking less certain as the jeweler grapples with a deteriorating situation in the US market brought on by a global pandemic and severe social unrest, fashion trade publication WWD reports. More here.
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People
Creighton Hicks has joined Austin-based LiveOak Venture Partners as a principal. He'd previously spent three. years as a partner with Dell Technologies Capital.
Unusual Ventures, an early-stage venture firm, has brought aboard Nextdoor cofounder Sarah Leary as an investment partner. Directly before cofounding Nextdoor, Leary cofounded Fanbase and spent a year as an entrepreneur-in-residence at Benchmark. More here.
South Korean prosecutors say they have filed an arrest warrant for Samsung’s vice chairman and anointed heir Jay Y. Lee and two other former company executives over an alleged accounting fraud and a controversial merger back in 2015. Lee, whose father is Samsung’s chairman, has previously denied charges.
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Lawsuit!
In the latest lawsuit over WeWork’s scuttled IPO, investors say the company hoodwinked them in order to sell hundreds of millions of dollars worth of stock. The complaint was filed as a class action on behalf of investors who bought shares in the privately held company 2.5 years before the IPO was canceled last September and the value of WeWork nosedived. They allege that WeWork executives and board members overhyped the business plan and downplayed its losses as “strategic investment spending that would lay the foundation for profitability.” Bloomberg has more here.
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Essential Reads
As protests against police brutality have swept across the United States, Americans have flocked in record numbers to police scanner apps, where they can listen in on law enforcement’s radio communication. They’ve also rushed to download Signal, the secure messaging app, and Citizen, a community safety app that sends out police alerts. Vox has more here.
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