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VC Daily : Is Venture Changing?; DeFi Isn't Immune to Regulation, SEC Says; Goldman Makes Purchase

08/20/2021 | 09:44am EDT

Good day. Last week, we asked about the lessons from previous climate-tech disappointments investors are applying to the renewed surge of interest in the sector.

Despite a sharp focus in 2019 on lessons learned from the first wave of climate investing, "the market is so hot that most of the accepted 'lessons' have gone out the window -- VCs are pouring money into climate-tech companies with significant technical risk at soaring valuations," said Piva Capital partner Bennett Cohen. The bull case is that the easy money will support the exit markets for these companies, Mr. Cohen said.

Michael Kearney, a principal at MIT's venture arm the Engine, said that while large markets have been created this time, it's "incumbent on the Biden administration, Congress and state level governments to continue pulling policy threads to send clear economic signals across all climate verticals."

Large companies should increase corporate venture to make change that goes beyond corporate pledges, said Paul Holland, managing director, corporate investing practice and VC-in-residence at Mach49. Investors then need to double down where corporations are focusing, Mr. Holland said.

This week's question: Is traditional venture capital at an inflection point? New entrants with deep pockets are wielding more influence on deals and founders; is the industry on the verge of a transformation?

Please email responses to marc.vartabedian@wsj.com

And now on to the news.

Top News

Crypto regulation. A new breed of digital asset exchanges is potentially the holy grail for cryptocurrencies: online places for people to trade and lend that purportedly involve no middleman setting the rules or taking fees, The Wall Street Journal reports.

But these peer-to-peer networks, so far completely unregulated in the U.S., may not be immune from oversight, said Gary Gensler, chairman of the Securities and Exchange Commission. Some decentralized finance projects, known as DeFi, have features that make them look like the types of entities the SEC oversees, Mr. Gensler said in an interview Wednesday.

DeFi developers write software that automates transactions and say they then step away from the project, allowing it to operate with no central entity in charge. They argue that such decentralization defeats the need for oversight by the SEC, which has said that some cryptocurrencies, such as bitcoin and ether, are sufficiently decentralized to avoid regulation.

$200 Million

Amount that Prudential Financial Inc. said it has committed to back new private-equity firms headed by diverse managers.

Goldman Sachs to Acquire European Asset Manager for $1.9 Billion

Goldman Sachs Group Inc. said Thursday it agreed to acquire the money-management operation of Dutch insurer NN Group for about $1.87 billion, as the need for scale in the asset-management business to lower costs drives sector consolidation, WSJ reports. The New York-based investment bank said it plans to merge NN Investment Partners with its Goldman Sachs Asset Management arm to gain access to a bigger pool of retail and institutional investors in Europe and to bolster its product offerings in areas such as European equities, investment-grade credit and green bonds.

OnlyFans to Ban Content Featuring 'Sexually Explicit Conduct'

OnlyFans, a social-media platform whose popularity was built on viewers' subscriptions to adult content, is planning to ban sex videos, WSJ reports. OnlyFans said Thursday that starting Oct. 1, it will prohibit content that features "sexually-explicit conduct" but it will allow creators to post nudity. The platform, owned by closely held London-based Fenix International Ltd., said the changes are to comply with the requests of banking partners and payment processors. OnlyFans has in recent months been looking to raise money, according to a person familiar with the matter. Many investors historically have avoided certain categories of vice, including pornography.

China Passes One of the World's Strictest Data-Privacy Laws

China has approved a sweeping privacy law that will curb data collection by technology companies, but that policy analysts say is unlikely to limit the state's widespread use of surveillance, WSJ reports. China's top legislative body, the Standing Committee of the National People's Congress, passed the Personal Information Protection Law at a meeting in Beijing on Friday, according to the state-run Xinhua News Agency. The law will take effect Nov. 1, Xinhua said. The full text of the final version wasn't released upon passage.

Industry News

Funds

Felicis Ventures closed $900 million for the firm's oversubscribed eighth fund, which includes a $300 million focus fund. A $600 million core fund will lead or co-lead seed to Series C rounds globally. Along with the new fund, Felicis appointed Viviana Faga as general partner. The Menlo Park, Calif.-based firm raised $510 million for its seventh fund last year, and $302 million for its sixth fund in 2018.

FinTech Collective, which invests across traditional fintech as well as emerging digital assets, raised $200 million to continue its focus on early-stage investments, and $50 million for its new strategy focused on decentralized finance. The New York-based firm's limited partners include State of Wisconsin Investment Board, Teachers' Retirement System of the State of Illinois, Greenspring Associates and StepStone Group, along with crypto investors DRW and Alan Howard.

Mobility-focused Fontinalis Partners closed its third fund with $104 million in commitments. Founded in 2009, and based in Detroit and Boston, the firm will make seed to Series B investments with the new fund.

People

Otrium BV, an online fashion marketplace that sells end-of-season collections that would otherwise go unsold, said Zuhairah Scott Washington will lead its expansion into the U.S. as the company's newly appointed president. She joins from Expedia Group. Earlier this year, Amsterdam-based Otrium raised a $120 million Series C round from BOND, Index Ventures and Eight Roads Ventures.

HR services provider Bambee appointed Anshu Khurana as chief revenue officer. She was previously senior vice president, partnerships at Partnerize. Bambee raised a $15 million Series B round last year from QED Investors, Alpha Edison and Mucker Capital.

Exits

Course Hero Inc., which offers course-specific study materials to college students, acquired study guides creator CliffsNotes and writing tools provider QuillBot. Terms weren't disclosed. Course Hero's website lists NewView Capital and SuRo Capital as investors. QuillBot raised more than $4 million in seed funding last year led by GSV Ventures and Sierra Ventures. CliffsNotes was founded in 1958.

Linktree, an Australian startup that connects online ecosystems and streamlines digital content with a singular link, acquired Songlink/Odesli, an automated music link aggregation platform, for an undisclosed amount. In March, Linktree said it raised a $45 million Series B round from Index Ventures, Coatue Management, AirTree Ventures and Insight Partners.

New Money

Apeel, a Goleta, Calif.-based agtech startup tackling food waste, scored $250 million in Series E funding, valuing the company at more than $2 billion. Temasek Holdings led the round, which included participation from Mirae Asset Global Investments, GIC, Viking Global Investors, Andreessen Horowitz, Tenere Capital, Sweetwater Private Equity, Tao Capital Partners, K3 Ventures and others. In May, Apeel acquired ImpactVision for an undisclosed amount.

Ample, a San Francisco-based electric vehicle battery technology provider, landed a $160 million Series C investment. Moore Strategic Ventures led the funding, which included additional support from existing backers Eneos Innovation Partners and Shell Ventures.

D1 Brands Inc., a Brooklyn, N.Y.-based Amazon FBA (Fulfillment by Amazon) acquirer, raised $123 million in Series A funding. Led by CoVenture and Crossbeam Venture Partners, the round included participation from ID8 Investments. In addition to the investment, D1 Brands hired CJ Bilangino as chief financial officer. He previously served as CFO for a number of consumer product companies, most recently at Rhone.

Canada Drives, a Canadian online car shopping and delivery platform, picked up a $100 million investment. Honor Ventures led the round, which saw participation from KAR Global and others. Jeffrey Housenbold, founder of Honor Ventures, will join the company's board.

Kovi, a Brazilian startup seeking to bring car ownership within reach of more Latin Americans, secured about $100 million in Series B funding. Valor Capital Group and Prosus Ventures co-led the round, which included participation from Quona Capital, Global Founders Capital, Monashees, UVC Investimentos, Globo Ventures, Peter Thiel and Tinder co-founder Justin Mateen.

Reali Inc., a San Mateo, Calif.-based home buying and selling platform, fetched $75 million in equity funding, along with $25 million in venture debt and $150 million in warehouse financing. Zeev Ventures led the investment, which included contributions from Akkadian Ventures, Signia Ventures and others.

MobileCoin Inc., a San Francisco-based cryptocurrency payments startup, closed a $66 million Series B round from Alameda Research, Berggruen Holdings, BlockTower Capital, Coinbase Ventures, General Catalyst, Marc Benioff's TIME Ventures and Vy Capital.

Nacelle, a headless commerce platform for e-commerce retailers, secured $50 million in Series B financing from Tiger Global Management. Previous Nacelle investors include Inovia Capital, Index Ventures, Accomplice and Lerer Hippeau.

Enable, a San Francisco-based business-to-business rebate management platform, snagged $45 million in Series B financing. Norwest Venture Partners led the round, with Partner Sean Jacobsohn joining the company's board. Previous investors Menlo Ventures and Sierra Ventures also contributed to the new funding.

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08-20-21 0943ET

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