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Question: When Might the Venture-Capital Market Fall Back to Earth?
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By Marc Vartabedian, WSJ Pro
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Good day. Last week we asked, how long can education-tech keep up its growth pace?
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Mercedes Bent, a partner at Lightspeed Venture Partners, said school districts and states are approving federally- and state-funded remote-learning options. She cited Colorado and Palo Alto, Calif., as examples. “This means big dollars for private accredited remote-learning options,” Ms. Bent said. “Schools recognize they'll need a more flexible learning option so this will irreversibly change the way schools interact with technology companies.”
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Andrew Chung, managing partner at venture firm 1955 Capital, said that despite the challenges and mixed results of remote learning, it will be difficult to put that genie fully back in the bottle, even amid school reopenings. “School systems from elementary to the graduate level will take stock of what they've learned this past year to incorporate edtech components that worked into their future plans to augment and, in some instances, replace the in-classroom experience,” Mr. Chung said.
This week’s question: When and how might the soaring venture market come back to earth, or is this capital and valuation growth sustainable?
Please email responses to marc.vartabedian@wsj.com.
And now on to the news...
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A view of Chicago, where Energy Capital Ventures is based. PHOTO: KIICHIRO SATO/ASSOCIATED PRESS
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New venture fund. Energy Capital Ventures has raised $45 million so far for its first fund, a dedicated environmental, social and governance fund focusing on sustainability initiatives largely tied to the natural gas utility sector, WSJ Pro's Isaac Taylor reports.
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The firm hasn’t yet allocated capital from the fund, which bears the firm’s name and which will invest $2 million to $5 million, primarily in Series A rounds.
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Chicago-based Energy Capital is targeting startups with technologies in place for decarbonization, methane capture and hydrogen energy. It will also look to fund companies using artificial intelligence for safer energy projects such as predictive maintenance for pipelines.
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The fund could end up being two to three times bigger than it is, said Vic Pascucci III, a managing partner at the firm, noting that the fund had a rocky launch.
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60
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Number of new SPACs focused on emerging markets that filed documents with the Securities and Exchange Commission in the first half of 2021, almost triple the number for all of 2020.
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SEC Chief Gary Gensler Braces for Clash With Crypto Traders
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Securities and Exchange Commission Chairman Gary Gensler this week declared war on what he called the Wild West of crypto trading, promising a vigorous attack on fraud and misconduct. But progress is likely to be more piecemeal and incremental than wholesale and sudden, WSJ's Dave Michaels and Alexander Osipovich report. Mr. Gensler outlined his desire to regulate digital assets such as bitcoin and other crypto products to the same extent as stocks, bonds and commodity-related trading instruments. He told the Aspen Security Forum on Tuesday that his priorities include newer innovations such as stablecoins and decentralized finance, products that are beginning to draw more mainstream
investors.
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U.S. to Set Electric-Vehicle Sales Goal of 50% by 2030
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Roughly half of all cars and light trucks sold in the U.S. by 2030 would be electric, hydrogen-fuel cell or plug-in hybrid vehicles under voluntary targets announced Thursday by the Biden administration and backed by auto makers contingent on government support, WSJ's Katy Stech Ferek and Ben Foldy report. General Motors Co., Ford Motor Co. and Chrysler maker Stellantis NV said their commitment hinges on federal funding for manufacturing and supply-chain research and development, purchase incentives and a national electric-vehicle charging network.
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BEGiN, the startup behind the reading and math app Homer, is raising new capital to accelerate its expansion through acquisitions, according to Neal Shenoy, co-founder and chief executive of the company.
New York-based BEGiN, incorporated as Conscious Content Media Inc., has received most of the commitments for a $35 million convertible debt financing that it is using to make acquisitions, Mr. Shenoy said. The company previously raised $100 million in venture funding from LEGO Ventures, Sesame Workshop, GSV Ventures, Wellington Management and others.
At the end of July, BEGiN bought KidPass, which sells subscriptions to children’s classes, for a combination of cash and stock. The purchase price exceeded KidPass’s last valuation of $29 million, according to co-founder and Chief Executive Solomon Liou, providing a positive return to its venture investors. KidPass raised $12 million from Y Combinator, Javelin Venture Partners and others. Earlier this year, BEGiN bought codeSpark Inc., which has an app that teaches children how to code.
Interest from both edtech investors and consumers is growing in early-childhood learning products, Mr. Shenoy said. That is allowing BEGiN to get to market faster with some of its growth plans that include adding in-person class subscriptions and educational toys to its digital offerings.
Founded in 2013, BEGiN has hundreds of thousands of paying subscribers to its Homer mobile app, and annual revenue in the tens of millions of dollars, according to Mr. Shenoy.
-Yuliya Chernova
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Funds
Publicly traded industrial technology company Trimble launched Trimble Ventures. The $200 million venture fund will focus on investing in early and growth-stage startups that align with Trimble's mission of transforming work in the agriculture, construction, geospatial and transportation industries.
Yaletown Partners has closed $130 million toward its $200 million Innovation Growth Fund II. The new fund is focused on driving digital transformation of traditional industries across Canada. Limited partners include global pension funds, financial institutions, family offices, foundations and technology entrepreneurs.
Work-Bench raised $100 million for its third fund, which will continue the firm’s focus on leading $3 million to $6 million seed rounds in primarily New York-based startups within the AI and machine learning, cybersecurity, cloud native infrastructure and future of jobs sectors. The firm closed its second fund in 2018 with $47 million.
People
Eclipse Ventures, whose focus is on the modernization of industrial sectors, added Aidan Madigan-Curtis and Jay Knafel as partners. Ms. Madigan-Curtis previously held senior positions at Apple and Samsara. Mr. Knafel was a research analyst at Fidelity.
Early-stage enterprise tech investor Scale Venture Partners promoted Eric Anderson to partner. Before joining the firm in 2017, he held leadership roles on AWS and Google Cloud product teams. The Foster City, Calif.-based firm also promoted Noah Gross to senior associate, and named Max Abram, Anika Ayyar and Misha Bansal as associates.
New York-based Lerer Hippeau appointed Jonathan Jameson as head of investor relations. He was previously a managing director at GCA Advisors.
Exits
Deere & Co. agreed to acquire Bear Flag Robotics, a developer of autonomous technology for farm tractors, for $250 million. Founded in 2017, The Newark, Calif.-based company is backed by investors including True Ventures, Graphene Ventures, AgFunder, D20 Capital and Green Cow Venture Capital.
Commercial insurance technology developer Corvus Insurance acquired technology insurance writing platform Wingman Insurance for an undisclosed amount. Boston-based Corvus is backed by investors including Insight Partners, Bain Capital Ventures, .406 Ventures, Telstra Ventures and Obvious Ventures.
Capitolis, a capital markets technology provider, agreed to purchase trade compression services provider LMRKTS for an undisclosed sum. Earlier this year, Capitolis raised a $90 million Series C round from Andreessen Horowitz, Index Ventures, Sequoia Capital and others.
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Hopin Ltd., a London-based provider of a platform for event organizers to host conferences and meetings from anywhere, secured $450 million in Series D financing led by Arena Holdings and Altimeter Capital. Additional new investors Adams Street Partners, Untitled Investments and XN also participated in the round, along with previous backers Andreessen Horowitz, DFJ Growth, General Catalyst, GIC, IVP, Northzone, Salesforce Ventures, Slack Fund, Temasek and Tiger Global Management.
Dataiku Inc., a New York-based startup that provides software for enterprises to build and deliver their own data products, scored $400 million in Series E funding led by Tiger Global Management. New investors including Insight Partners, Eurazeo and Lightrock also contributed to the round, alongside existing backers Iconiq Growth, CapitalG, FirstMark Capital, Battery Ventures, Snowflake Ventures and Dawn Capital. The new investment brings Dataiku’s valuation to $4.6 billion.
Human Interest Inc., a San Francisco-based 401(k) provider for small- and medium-sized businesses, raised $200 million in Series D funding at a valuation of $1 billion. The Rise Fund led the round, which included participation from SoftBank Vision Fund 2, Crosslink Capital, NewView Capital, Glynn Capital, U.S. Venture Partners, Wing Venture Capital, Uncork Capital, Slow Capital, Susa Ventures and others. The company also appointed Mike Armsby as chief financial officer. He was previously CFO at Personal Capital and Yodlee.
Bluecore, a New York-based ecommerce marketing technology provider, completed a $125 million Series E round at a valuation of $1 billion. Georgian led the funding, which included participation from new investor Silver Lake, alongside returning backers FirstMark Capital and Norwest Venture Partners.
PepGen Inc., a Cambridge, Mass.-based startup developing therapies for neuromuscular and neurologic diseases, closed an oversubscribed $112.5 million funding round. Existing backers RA Capital Management, Oxford Sciences Innovation and CureDuchenne Ventures were joined by new investors Viking Global Investors, Deerfield Management Co., Samsara Biocapital and others in the financing.
Mindtickle Inc., a San Francisco-based provider of onboarding, micro-learning, skills development and coaching for sales teams, added $100 million in Series E funding, bringing the company’s valuation up to $1.2 billion. Lead investor SoftBank Vision Fund 2 was joined by existing investors Norwest Venture Partners, Canaan, NewView Capital and Qualcomm Ventures in the round.
Relatient Inc., a patient engagement platform, fetched over $100 million in growth equity capital from Brighton Park Capital and affiliates. The company also agreed to merge with patient scheduling services provider Radix Health.
Berry Oncology Corp., a China-based startup focused on genomic testing of cancers, landed $99.2 million in Series B1 funding. China Merchants Capital Management Co. led the investment, which included additional support from Qiming Venture Partners, Legend Capital and others.
Cricket Health Inc., a San Francisco- and Cambridge, Mass.-based manager of chronic kidney disease and end-stage kidney disease, snagged an $83.5 million Series B round led by Valtruis. Oak HC/FT, Cigna Ventures and K2 HealthVentures also participated in the round, which included a strategic investment from Blue Shield of California.
Yellow.ai, a San Mateo, Calif.-based customer experience automation platform, raised $78.2 million in Series C funding from WestBridge Capital, Sapphire Ventures, Salesforce Ventures and Lightspeed Venture Partners.
Chronus, a Bellevue, Wash.-based mentoring software provider, said Level Equity invested $78 million in the company. Charles Chen, partner at Level Equity, will join the company’s board.
SentiLink Corp., a San Francisco-based identity verification technology provider, nabbed a $70 million Series B round. David Sacks of Craft Ventures led the investment, which included additional participation from Felicis Ventures, Andreessen Horowitz and NYCA Partners.
Ahana, a San Mateo, Calif.-based data analytics startup, picked up $20 million in Series A funding. Third Point Ventures led the round, with Managing Partner Robert Schwartz joining the company’s board. GV, Leslie Ventures and Lux Capital also participated in the investment.
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Jen Easterly is head of the Cybersecurity and Infrastructure Security Agency. PHOTO: BILL CLARK/CQ ROLL CALL/ZUMA PRESS
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