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January 8, 2021
WHAT A WEEK.
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We're not going to lie -- we're completely distracted tonight by our top news story. But before we go, we're just out of the recording studio (fine, our home office) with a new StrictlyVC Download for you. On this week's show: Mark Kvamme and Chris Olsen, the former Sequoia Capital partners who said sayonara to Silicon Valley long before it was cool to make a stink about leaving California. If it's helpful to know, they're not looking back. Instead, they hope to lure more VCs to their adopted city of Columbus, Oh., a base from which they say they're seeing more solid deals than they can fund.
They were candid about what's gone really well, along with the challenges they've had to overcome in setting up shop in the Midwest -- including convincing commercial landlords to think differently. We hope you enjoy it.
Major thank to Lexicon Branding for sponsoring this episode. Lexicon has dreamed up Sonos, Impossible Foods, and many other iconic brands; you can learn more here.
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Top News
Donald Trump was permanently banned from Twitter today after tweeting that he would not attend the upcoming inauguration of Joe Biden, as well as tweeting earlier in the day that "great patriots" who voted for him "will not be disrespected or treated unfairly in any way, shape or form!!!” Twitter cited “the risk of further incitement of violence,” adding, very notably: “Plans for future armed protests have already begun proliferating on and off-Twitter, including a proposed secondary attack on the US Capitol and state capitol buildings on January 17, 2021.” After being knocked off Twitter, Trump later tweeted through the @POTUS account and through @Teamtrump that Twitter was conspiring with "Democrats and the Radical Left" in removing his account to silence him; Twitter deleted the tweets afterward and permanently suspended @Teamtrump for flouting its rules. TechCrunch has more here and here.
Apple has given Parler, the social network favored by conservatives and extremists, an ultimatum to implement a full moderation plan of its platform within the next 24 hours or face expulsion from the App store, says BuzzFeed. Google just barreled ahead and suspended the app from its Google Play store.
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Venrock Has a New $450 Million Fund; Here's Where It's Looking to Shop
Venrock, the 51-year-old firm that started as the venture arm of the Rockefeller family, has closed its ninth fund with $450 million, the same amount it raised for its last two funds. The outfit, with offices in Palo Alto, New York, and Cambridge, clearly feels comfortable with the fund size, but it says change is otherwise a constant, given that trends and tech shift so fast that so-called pattern recognition can prove a liability if an investment team isn't careful.
To learn more about what the team is tracking at Venrock -- whose newest exits include last year's IPOs of Cloudflare and 10x Genomics IPO, and the recent sales of Corvidia and Personal Capital -- we were in touch earlier today with longtime partner Bryan Roberts, who has spent his 24-year career in venture with the firm.
Our exchange has been edited lightly for length and clarity.
I talked with your colleague Camille Samuels earlier this year about aging biology. How big an area of focus is that for Venrock and why?
It's one of many interesting areas of biology on a go-forward basis, along with immunology, CNS (central nervous system) and other areas [where they has been] little progress and great unmet need.
Speaking of unmet needs, Camille also talked about why infectious disease isn’t good business for new companies, as are cancers and orphan diseases. As she explained it, with something like the coronavirus, it’s hard to get funding before it’s an actual problem; once a treatment is developed, it has to be sold at low cost, and then you hope you won’t have repeat customers. Do you agree, and do you think this needs to change?
Yes, I think things need to change, but there are several issues. In the case of one company on which I lost a bunch of money — Achaogen, which made a successful drug for a big unmet need [but faced] screwy commercialization dynamics in the infectious disease space — and for many historical [infectious disease] companies, the cost of a drug is borne by the hospital, not billed separately.
It has also been hard historically to get anyone to pay attention to much of anything from a preventive perspective – even more so in communicable diseases. Covid was, on the one hand, not a particularly hard biological problem to solve. But from an investing perspective, the issue was it was a problem tailor-made for an existent or large company to tackle, not a startup. Startups take 12 or more months to find their way out the front door, and the problem is largely solved by then by one of the very large competitors.
You saw this with Moderna. Its tech turned out to be specifically suited to vaccines — and then a pandemic hit.
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Massive Fundings
Affinivax, a 6.5-year-old, Cambridge, Ma.-based vaccines developer that was seed funded by the Bill and Melinda Gates Foundation, raised $226 million in Series C funding. Rock Springs Capital and Foresite Capital co-led the round, joined by T. Rowe Price, Wellington Management, Blackrock, Cormorant, Perceptive Advisors, EcoR1 Capital, Surveyor Capital, Logos Capital and insiders Viking Global Investors, Bain Capital Life Sciences and Ziff Capital Healthcare Ventures. The Pharma Letter has more here.
DiCE Molecules, an eight-year-old, South San Francisco, Ca.-based biopharmaceutical company focused on immunology, has raised $80 million in Series C funding. RA Capital Management led the round, joined by Eventide Asset Management, New Leaf Venture Partners, Soleus Capital, Driehaus Capital Management, Osage University Partners, Asymmetry Capital Management, Northpond Ventures, Sands Capital, Sanofi Ventures, Alexandria Venture Investments, Altitude Life Science Ventures, and Agent Capital. More here.
Hipcamp, a seven-year-old, San Francisco-based company that works with landowners to offer tent camping, RV parks, cabins, treehouses, and glamping—everywhere from national parks to farms, has raised $57 million in Series C funding from Index Ventures and Bond Capital, among others. The deal values the company at more than $300 million, says The Information. More here.
Jobandtalent, an 11-year-old, Madrid-based temp staffing platform, has raised €88 million in new Series C funding from earlier backers, including Atomico, Seek, DN Capital and Kibo Ventures. TechCrunch has more here.
LEXEO Therapeutics, a year-old, New York-based clinical-stage gene therapy company, has raised $85 million in Series A funding led by Longitude Capital and Omega Funds. The company's CEO, Roland Townsend, was previously the president of Pfizer's North American rare disease division. FierceBiotech has more here.
Scorpion Therapeutics, a year-old, Boston-based precision oncology startup, has raised $162 million in Series B funding, including from Boxer Capital, EcoR1 Capital, Omega Funds, and roughly a dozen other backers, including earlier investors Atlas Venture and Abingworth. FierceBiotech has more here.
Big-But-Not-Crazy-Big Fundings
Abcuro, a new, Newton, Ma.-based company focused on autoimmune diseases and cancers, has raised $42 million in Series A1 funding. Mass General Brigham Ventures and Sanofi Ventures led the round, joined by Pontifax Venture Capital, Hongsen Investment Group, RA Capital Management, and Samsara BioCapital. FierceBiotech has more here.
Smaller Fundings
SilviaTerra, a 10-year-old, San Francisco-based forestry company for organizations to exchange carbon offsets, has raised $4.4 million seed round. Union Square Ventures' climate-tech fund led the round, joined by Scribble Ventures, Gratitude Railroad, Alpha Edison, CoFound Partners and several high-profile individuals, including Salesforce founder Marc Benioff and Pinterest cofounder Ben Silbermann. TechCrunch has more here.
N0t-Saying-How-Much Fundings
TaxBit, a 2.5-year-old, Draper, Ut.-based cryptocurrency tax automation software company, has raised an undisclosed amount of funding from PayPal Ventures, Coinbase Ventures, and earlier investor Winklevoss Capital. Pymnts has more here.
Groundspeed Analytics, a 4.5-year-old, Ann Arbor, Mi.-based maker of software for the property and casualty insurance industry, has raised an undisclosed amount of Series C funding led by Insight Partners, with participation from Oak HC/FT. More here.
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New Funds
BGV, or BioGeneration Ventures, a 14-year-old, North Holland, Netherlands-based biotech-focused investment fund, has raised €140 million ($170 million) in capital commitments for its fourth fund. Among its limited partners are numerous large biotech players, including Eli Lilly, Novo Holdings, and earlier backer Bristol Myers Squibb. FierceBiotech has more here.
Prelude Growth Partners, a 3.5-year-old, New York-based growth equity firm focused on fast-growing consumer brands, has raised $122.9 million in capital commitments for its second fund, shows a new SEC filing that lists a $200 million target. More here.
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Exits
The credit bureau Equifax says it's paying $640 million to acquire Kount, a 13-year-old, Boise, Id.-based company that uses artificial intelligence to drive its fraud prevention and digital identity services. Crunchbase shows that Kount raised $80 million from one investor alone: CVC Capital Partners. Venturebeat has more here.
Roku has agreed to acquire the rights to content from Quibi, a deal that will make the defunct short-form streaming service’s shows available on the biggest streaming-media player in the U.S. Roku paid less than $100 million to acquire the shows, says the WSJ, with one of its sources characterizing the deal as “significantly less” than $100 million. More here.
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Going Public
SoftBank's AI-focused SPAC -- SVF Investment Corp. -- has raised $525 million by offering 52.5 million units at $10. The company is led by CEO and Chairman Rajeev Misra, who currently serves as CEO of SoftBank Investment Advisers. Renaissance Capital has more here.
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Lawsuit?
Cisco’s proposed $2.6 billion merger with Acacia Communications could be destined for court, after Acacia said today it is terminating the agreement on grounds that Cisco disputes. Acacia says the the deal had yet to receive approval by Chinese regulators by today, which was the extended deadline. Cisco says that, on the contrary, China’s State Administration for Market Regulation, told it yesterday that Cisco’s submissions were “sufficient to address the relevant competition concerns.” As Larry Downes, project director for the Georgetown Center for Business and Public Policy, tells MarketWatch: “Companies try to get out of mergers all the time and it usually has nothing to do with the thing they cite as the reason for getting out of it." Last July, Cisco said it would buy optical component maker in a bid to capture a bigger chunk of 5G spending by telecom companies.
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Essential Reads
Police let most Capitol rioters walk away. But cellphone data and videos could now lead to more arrests. More in the Washington Post.
Tesla CEO Elon Musk urged his Twitter followers yesterday to “use Signal,” meaning the encrypted messaging app. But some people appear to have taken it the wrong way. Shares of an obscure and unrelated company called Signal Advance, which trades over the counter, surged 527% yesterday and 91% today. CNBC has more here.
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Sponsored By . . .
Acquity Realty, which develops multi-family and office projects with partners like Apple and Cigna Realty Advisors, is looking for individuals and institutions interested in tax efficiently growing their capital. It’s developing a Qualified Opportunity Zone project just two blocks from Google’s new 80-acre campus in San Jose. Over its last $1.2 billion of projects, Acquity has generated an IRR of 49.9%. Visit Acquity or email Greg Ovalle at ov@acquityrealty.com to learn more.
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