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March 5, 2021
Before (or after!) you slip into something more comfortable, check out this week's StrictlyVC Download, with guest Lindy Fishburne, a cofounder and managing director of Breakout Ventures in San Francisco. Fishburne has spent the last decade plus immersed in the world of futuristic startups, originally vetting companies for the private, grant-making Thiel Foundation, where she remains executive director, and ultimately diving into venture capital herself because, well, there is big money in molecules. She has a great overview of how fast science is changing through software -- and why more VCs are flocking to the kinds of deals that have long interested her firm. You'll definitely learn a thing or two. (You can also read excerpts below.)
Giant thanks to Ageras for partnering with us on this episode. Ageras is a matchmaking service for accounting, bookkeeping and tax preparation services. Get the personalized help you need, and fast, with Ageras.
More Monday.:)
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Top News
Crikey. "At least 30,000 organizations across the United States — including a significant number of small businesses, towns, cities and local governments — have over the past few days been hacked by an unusually aggressive Chinese cyber espionage unit that’s focused on stealing email from victim organizations, multiple sources tell KrebsOnSecurity. The espionage group is exploiting four newly-discovered flaws in Microsoft Exchange Server email software, and has seeded hundreds of thousands of victim organizations worldwide with tools that give the attackers total, remote control over affected systems." More here.
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VC Lindy Fishburne on the Sudden Democratization of Science -- and Deep Tech Investing
Deep science investor Lindy Fishburne cofounded the seed- and early-stage venture firm Breakout Ventures several years ago, after cofounding Breakout Labs within the Thiel Foundation back in 2011, and she has made a wide array of interesting bets in the process. Among her firm’s portfolio companies is Cortexyme, a company that aims to treat Alzheimer’s disease; the sustainable materials maker Modern Meadow; and Strateos, a company whose robotic cloud platform is remaking how lab work gets done.
We talked with Fishburne this week about where — based on what she is seeing — we are in the arc of this pandemic. We also talked about why more of her investments, which once seemed like long shots, suddenly seem like solid bets.
Parts of our chat, below, have been edited lightly for length and clarity. (As mentioned up top, you can also listen to the conversation.)
We want to be excited about the progress being made in vaccinating Americans. Based on the conversations you’re having, what’s your sense of things?
The acceleration of the vaccines is like nothing we’ve ever seen before in science, and now we really are down to the unsexy part of of the logistics of rolling them out. That’s clearly our biggest challenge. Then the next piece we’re going to have to confront is what happens when the world is vaccinated [at] very unequal levels and how people feel about travel and exposure and equity along those issues. But I do think we see the end of the biggest threat to humanity and our hospital systems around COVID . . .we’ve probably got another odd year ahead of us.
Science has been the big story of the last year. Are you hearing from investors and potential syndicate partners who weren’t reaching out previously?
Yes. The pandemic has brought the importance of investing in science into sharp relief. For the first time, we’re really seeing a whole set of what you would think of as traditional tech investors who read about the mRNA vaccine that Moderna coded in a weekend and who are starting to believe that we’re able to engineer biology and that it doesn’t feel like a craft process anymore.
You talk about coding a vaccine. Are laboratories becoming less important in that scientists are able to do much more in simulation and, if so, what does that mean for human testing? Are we getting to a point where we don’t have to rely on human testing as much as we did in the past?
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Massive Fundings
CorVista Health, a nine-year-old, Toronto-based digital health company focused on cardiovascular disease diagnosis, has raised $65 million (USD) in Series C funding. Ambix Life Science led the round and was joined by investors including MedVenture Partners. The company has now raised $100 million altogether. BetaKit has more here.
SiCepat, a nearly seven-year-old, Jakarta, Indonesia-based logistics company, has raised $170 million in Series B funding from Falcon House Partners, Kejora Capital, DEG, Telkom Indonesia, Indies Capital, Temasek, Trihill Capital and Daiwa Securities. TechCrunch has more here.
TytoCare, a nine-year-old, New York-based maker of a modular device and telehealth platform for on-demand remote medical examinations, raised $50 million in extended Series D funding that it tacked on to $50 million in Series D funding raised last year. Insight Partners led the newest tranche, joined by Tiger Global Management, Qumra Capital, Qualcomm Ventures, Olive Tree Ventures, and Shenzhen Capital Group Company.
Big-But-Not-Crazy-Big Fundings
ChurnZero, a nearly six-year-old, Washington D.C.-based maker of a customer analysis platform for subscription businesses, has raised $25 million in Series B funding led by JMI Equity, with participation from earlier backers Baird Capital and Grotech Ventures. The company has now raised $35 million altogether. Technical.ly Baltimore has more here.
Eco, a three-year-old, San Francisco-based outfit that has built out a digital global cryptocurrency platform, just raised $26 million in a funding round led by a16z Crypto. The new round for the company, whose platform is designed to be used as a payment tool around the world for daily-use transactions, also saw participation from Founders Fund, Activant Capital, Slow Ventures, Coinbase Ventures, Tribe Capital, Valor Capital Group and more than one hundred other funds and angels. TechCrunch has more here.
Theorycraft Games, a newly launched, L.A.-based games studio founded by veterans of Riot Games and other studios, has raised $37.5 million in Series A funding. NetEase led the round, joined by NEA, Bitkraft Ventures, Griffin Gaming Partners, and SISU Game Ventures. VentureBeat has more here.
Webscale, a nine-year-old, Santa Clara, Ca.-based cloud hosting company for e-commerce businesses, has raised $26 million in funding. BGV, STCAP Ventures, and Mohr Davidow Ventures led the round, joined by Grotech Ventures. Crunchbase News has more here.
Smaller Fundings
Unslashed Finance, a months-old, U.K.-based startup that's developing insurance products for crypto assets, has raised $2 million in funding, including from Lemniscap, P2P Capital, Bitscale Capital, and Chainlayer. Coindesk has more here.
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New Funds
PSL Ventures, a three-year-old, Seattle-based venture capital fund that invests in early-stage technology companies, says it has closed its second venture fund with $100 million in capital commitments -- money it will primarily invest in the Pacific Northwest region of the United States. The fund also will participate in financings of spinouts from its affiliated startup studio, Pioneer Square Labs, which was itself founded in 2015. More here.
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Exits
The owner of Saks Fifth Avenue is splitting off its e-commerce business into a separate entity and raising $500 million from Insight Partners at a $2 billion valuation to capitalize on the explosive growth in online shopping, according to company executives. The WSJ has more here.
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Going Public
British food delivery start-up Deliveroo announced yesterday that it plans to list in London, in a post-Brexit boost for the City. The firm, which is backed by Amazon, is expected to go public later this year. Deliveroo said it would adopt a dual-class share structure for its market debut, giving its founder and CEO Will Shu enhanced voting rights. CNBC has more here.
The Walmart-owned Indian e-commerce giant Flipkart is exploring going public in the U.S. through a deal with a blank-check firm, although a traditional stock market listing is much more likely, reports Reuters. More here.
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People
Jeff Bezos wanted $1.7 million in legal fees from his girlfriend’s brother for successfully fighting off his defamation lawsuit. He got much less, reports Bloomberg, which says an L.A. judge today awarded Bezos $218,385, saying Amazon’s founder needlessly put too many lawyers on the case and that the more than 2,070 hours billed were “not reasonable."
In January, U.S. officials blacklisted Chinese smartphone giant Xiaomi as a company with military ties partly due to an award given to its founder, Lei Jun, in 2019 for “Outstanding Builder of Socialism with Chinese Characteristics” from the Ministry of Industry and Information Technology. Xiaomi touts the award—given to 100 Chinese executives that year—on Lei’s biography page on the company’s website and in its annual report. The WSJ has more here.
Things just got worse for antivirus software mogul John McAfee, who has been awaiting extradition from Spain on tax evasion charges since late last year. The 75-year-old computer programmer now also stands accused of a $13 million fraud and money laundering scheme, wherein he and a business partner allegedly bought large quantities of publicly traded cryptocurrency altcoins at cheap rates to be peddled on social media. Law & Crime has more here.
Chamath Palihapitiya, whose blank-check company Social Capital Hedosophia took public the space tourism company Virgin Galactic in 2019, has divested the remainder of his personal holdings in the company, saying he is using the $200 million from that sale for a climate project that he will be announcing soon. Palihapitiya, who serves as the chairman of Virgin Galactic’s board, still holds 6.2% ownership in the company in partnership with investor Ian Osborne. Virgin Galactic's shares ended the day down 10%. TechCrunch has more here.
Internet forum Reddit has appointed Drew Vollero as its first CFO, "taking a step closer toward an initial public offering," says Bloomberg. The outlet reminds readers that Vollero led Snap’s IPO preparations when he served as CFO at the social media company from 2015 to 2018.
President Biden today named Tim Wu, a Columbia University law professor, to the National Economic Council as a special assistant to the president for technology and competition policy, putting one of the most outspoken critics of Big Tech’s power into the administration. The New York Times has more here.
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Data
The median pre-investment valuation for a Series A round of funding has increased sixfold to $37 million(!), since 2010, according to data on U.S. companies provided to The Information by research firm PitchBook. More here.
Tesla's stock has lost more than 15% of its value the year and today finished below $600 for the first time since Dec. 4. CNBC looks at what's driving the downward pressure.
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Essential Reads
The visual effects artist who created three deepfake videos of Tom Cruise that went viral on TikTok last week said he’s in favor of laws that would regulate use of the technology. “I strongly think that there should be laws that help with responsible use of AI and deepfakes in general,” Chris Ume tells Fortune in one the first interviews he has granted to discuss his work. (Here's a video breakdown of the visual effects he used.)
More on the rise, and rise, and Chamath Palihapitiya, in the WSJ.
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Retail Therapy
A Colorado ski chalet inspired (to a chilling degree) by "Frozen."
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