Calling it quits

Happy Wednesday. Here’s what we’ve got today…

• A look at Foundry Group’s decision to gradually wind down the firm

• The deal sheet, plus private equity’s move to poach top wealth managers

Boulder-based venture firm Foundry Group is planning to gradually wind down its operations, announcing that last year’s $500 million raise for an eighth flagship fund would be its last.

At first glance, it may seem an affirmation of today’s turbulent early-stage environment, reminiscent of Boston-based firm OpenView’s decision to shut up shop late last year. Instead, Foundry Group’s leadership says the firm’s conclusion had been planned from the very beginning.

“While VC firms rarely make decisions like this, it’s precisely what we planned to do when we started Foundry in 2006,” wrote co-founder Seth Levine in a blog post announcing the move. “From our founding, we intentionally decided not to build a legacy or generational firm — one meant to live beyond the tenure of the founding partners.”

That’s an atypical approach to the institutional direction taken by many of Foundry Group’s multi-generational peers. Prominent examples include Sequoia Capital, which saw founder Don Valentine hand the reigns to Michael Moritz and Doug Leone, who have themselves since departed; though Sequoia is barely out of its infancy when benchmarked to Bessemer Venture Partners’ 113-year history.

A Transition Period

The firm says it still has up to 40 percent of Fund Eight left to invest, and plans to continue leading new Series A and B financings—one partner’s Medium post sharing the news also included an invitation for founders to reach out with new opportunities.

Founders may be hesitant to partner up with a lead investor that has publicly said it’s on its way out, though the firm’s leadership promised to continue actively working with portfolio companies for “at least the next decade.” Such a commitment may prove more challenging in its latter stages when management fees will have all but dried up.

Shaping the Ecosystem

The firm’s portfolio includes active investments Mapbox, Seat Geek, Stocktwits, and The Pro’s Closet, among others, as well as exited investments in Fitbit, Rover, SendGrid, and Zynga. Foundry Group has also been an active investor in other venture firms, launching a GP stakes strategy in 2016 that has since built a portfolio of nearly 50 early-stage managers, including Union Square Ventures and Forerunner Ventures.

Over its 18-year history, the firm has earned an exceptional reputation among both founders and peers. Its recent announcement was met with an outpouring of support from the venture community, partially triggered by press coverage that some deemed overly negative (including a TechCrunch headline implying the firm was immediately closing down).

“Foundry Group’s name will go down in history as one of the most incredible funds,” wrote Lux Capital general partner Bilal Zuberi on X. Spark Capital’s Nabeel Hyatt added, “Foundry was a beacon on building a VC firm loyal to founders, with a group that was a real partnership of good humans.”

Eric Bahn, co-founder of Hustle Fund (a 2021 Foundry Group investment), said the firm “helped kickstart an entire generation of fund managers.”

The Right Time 

While firm leadership says the recently announced wind-down was always the plan, it still hasn’t been immune from that turbulent early-stage environment. Foundry Group’s current fund is meaningfully smaller than its predecessor, a $750 million vehicle raised in 2018, and it may have simply felt like the right time to call it quits.

“We’ve had several moments over the last decade where we thought the fund we were raising might be our last,” said Levine. “Each of those times, after reflection and discussion, we decided to raise another fund. But not this time. Foundry 2022 will be our last fund.”

• Walmart (NYSE: WMT) is in negotiations with Vizio, a smart TV and home audio company, over an acquisition that could value the business at more than $2 billion.

• Welsh Carson Anderson & Stowe is preparing to sell Avetta, a provider of supply chain risk management software that could be worth around $3 billion, per Bloomberg.

• CK Hutchison has called off its planned majority stake sale for its Italian network infrastructure portfolio to EQT, valued at €3.4 billion, after closing conditions weren't met.

• Global Infrastructure Partners has agreed to acquire a 50 percent stake in two U.S. offshore wind projects owned by Eversource Energy for $1.1 billion.

• Carl Icahn has acquired a 10 percent stake in JetBlue Airways (Nasdaq: JBLU).

• CVC Capital Partners is in pole position to acquire the Bundesliga’s media rights following reports that Blackstone has dropped out of the process.

• Nordic Capital agreed to acquire Zafin, a provider of SaaS core modernization and transformation solutions for financial institutions.

• Armis (Nasdaq: ARMS) agreed to acquire CTCI, an AI-powered pre-attack threat hunting technology startup, for $20 million.

• ADC Aerospace, backed by GreyLion, acquired Cast Rite, a U.S.-based components manufacturer.

• Whistler Capital Partners invested in AmeriPro, a provider of healthcare patient logistics and last-mile healthcare delivery services.

• Zendesk, an H&F and Permira portfolio company, acquired Klaus, a customer support analytics platform backed by Global Founders Capital, Acton Capital, Icebreaker.vc, and Creandum.

• Blue Road Capital is preparing to sell Diamond Foods, a San Francisco-based producer of branded snacks, nuts, and culinary oils.

• Global Payments (NYSE: GPN) is nearing a deal to acquire Takepayments for more than $250 million.

• Ripple has agreed to acquire Standard Custody & Trust Co., a digital asset custody firm.

• Oaktree Capital Management is planning to sell a 35-40 percent stake in Banca Progetto via a listing on the Milan Stock Exchange, per Bloomberg.

Tech, Vertical SaaS, & Misc. Enterprise

• Sierra, a provider of a conversational AI customer service solutions, raised $110 million in Series A funding from Sequoia Capital and Benchmark.

• Antithesis, a code testing software provider, raised $47 million in seed funding at a $215 million valuation from Amplify Partners, Tamarack Global, and First In Ventures.

• Cambridge Mechatronics, a developer of shape memory alloy actuator and IC technology, raised €37 million in new funding from Atlantic Bridge, Intel Capital, and Supernova.

• Skylo Technologies, a developer of satellite-based IoT technologies, raised $37 million in new funding co-led by Intel Capital and Innovation Endeavors, with participation from BMW i Ventures, Next47, Samsung Catalyst Fund, and Seraphim Space.

• Meter, a provider of internet infrastructure solutions, raised $35 million in funding led by Sam Altman and Lachy Groom, with participation from Sequoia.

• Marqo, a developer of a vector search and artificial intelligence platform, raised $12.5 million in Series A funding. Lightspeed led, with participation from Blackbird VC.

• Aegir Insights, a provider of data and web analytics services for the offshore wind sector, raised €8.5 million in Series A funding led by Seaya Andromeda, with participation from Climentum Capital.

• Camus Energy, a grid management software provider, raised $10 million in Series A extension funding, bringing the round to $26 million. Congruent Ventures and Wave Capital co-led, with participation from Align Impact, Remarkable Ventures, and Groundswell.

• Quilter, a developer of generative circuit board design software, raised $10 million in Series A funding. Benchmark led, with participation from Coatue, Root Ventures, and Harrison Metal Capital.

• Seal Security, an AI-driven software supply chain security company, raised $7.4 million in seed funding. Vertex Ventures Israel led, with participation from Crew Capital, PayPal Alumni Fund, and Cyber Club London.

• Motif Analytics, a developer of a data exploration platform, raised $5.7 million in seed funding led by Felicis and Amplify Partners, with participation from angel investor group InvestInData.

• Civic Roundtable, a developer of an online platform for government information sharing, raised $5 million in seed funding led by General Catalyst.

Fintech

• Finom, a digital banking platform for SMEs and startups in Europe, raised €50 million in Series B funding. Northzone and General Catalyst co-led, with participation from Cogito Capital, Entrée Capital, FJLabs, S16vc, and Target Global.

• Navro, a fintech specializing in international payment regulatory compliance, raised $14 million in new funding co-led by Bain Capital and Unusual Ventures, with participation from Motive Partners and Fin Capital.

• Anatomy Financial, a healthcare billing automation company, raised $7.6 million in seed funding. Lightspeed Venture Partners led, with participation from Meridian Street Capital, Live Oak Ventures, Cambrian Ventures, Peterson Ventures, and angel investors.

Media & Consumer

• Bob W., a tech-enabled short-term rentals and aparthotels platform, raised €40 million in Series B funding. Evli Growth Partners led, with participation from Taavet+Sten, Flashpoint, and existing investors.

• Astrotalk, a digital astrology and spiritualism platform, raised $20 million in Series A funding led by Left Lane Capital.

• Groover, a music promotion platform, raised $8 million in Series A funding. OneRagtime led, with participation from Trind, Techmind, and MozzaAngels, among others.

Healthcare & Life Sciences

• BioAge Labs, a clinical-stage biotech developing metabolic disorder therapeutics, raised $170 million in Series D funding led by Sofinnova Investments, with participation from Longitude Capital, RA Capital, Cormorant, RTW Investments, SV Health, OrbiMed, Sands Capital, Pivotal BivVenture Partners, Osage University Partners, Lilly Ventures, and Amgen Ventures.

• Latigo Biotherapeutics, a clinical-stage biotech developing non-opioid pain medicines, raised $135 million in Series A funding from Westlake Village BioPartners, 5AM Ventures, Foresite Capital, and Corner Ventures.

• ProfoundBio, a biotech developing antibody-drug conjugate (ADC) therapeutics for cancer, raised $112 million in Series B funding. Ally Bridge Group led, with participation from Nextech Invest, T. Rowe Price, Janus Henderson Investors, RA Capital Management, and OrbiMed, Lilly Asia Ventures, LYFE Capital, and Riva Capital.

• Areteia Therapeutics, a clinical-stage biotech developing drugs for respiratory conditions, raised $75 million in Series A funding from Viking Global and Marshall Wace.

• Sudo Biosciences, a biotech developing TYK2 inhibitors for autoimmune conditions, raised $30 million in Series B funding from DDF, Leaps by Bayer, and UPMC Enterprises.

Industrials, Greentech, & Other

• Lilac Solutions, an lithium processing technology company, raised $145 million in Series C funding from Mercuria, Lowercarbon Capital, Breakthrough Energy Ventures, T. Rowe Price, and Engine Ventures.

• Roam, an EV company focused on motorcycles and buses in Kenya, raised $14 million in Series A equity funding and $10 million in debt financing from U.S. International Development Finance Corporation. Equator led the equity round, with participation from At One Ventures, TES Ventures, Renew Capital, The World We Want, and One Small Planet.

• Epiris raised £1.044 billion for its third buyout fund.

• Core Industrial Partners raised $685 million for its third flagship fund and $202 million for a separate fund focused on middle market services companies.

• AIX Venture raised $202 million for its second fund.

• Earlybird raised €173 million for its latest venture fund.

• Homebrew is raising $50 million for a new early-stage venture fund.

1. Private equity firms want to poach HNW wealth managers.

• With individual investors increasingly seen as the next frontier for private equity, managers are luring private bankers and wealth managers away from banks. — The Information

2. Expect resilient inflation and fewer cuts.

• KKR’s Macro & Global Asset Allocation team shares its views on the January CPI report, and what that means for the year ahead. — KKR

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