Axios Pro Rata
June 29, 2022
Welcome, readers! Dan is busy this morning moderating a roundtable of dealmakers in Boston, so I'll be taking you through the news this morning until he gets back to his desk this afternoon.
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Top of the Morning
The data is in, and startups are definitely (still) hiring more remote employees than before the pandemic, even as the drawbacks associated with working from home become more apparent.
- According to Carta, 62% of new hires in 2022 so far are located in a state different from their headquarters, up from 35% in 2019.
Why it matters: The land of startups (and the broader tech industry) is still figuring out which trends of the past two years are secular, and which were largely a product of the pandemic's reshaping of our lives.
By the numbers: That percentage slowly crept up from 29% in 2015, to 35% in 2018 and 2019. But it spiked to 43% in 2020 (the start of the pandemic), and 55% in 2021.
Yes, but: The smallest startups ($1 million to $10 million post-money valuation) remain the exception. While the portion increased since the start of the pandemic, co-located new employees have remained more prevalent, and even soared to 60% so far this year.
- That's in part because these startups have — and hire — fewer employees, so there's less opportunity to lean into the distributed team trend. And as they grow, larger companies have always opened offices in other cities.
- But there's also a continued belief that, at the earliest stages of building a startup, teams greatly benefit from being all together.
The topic came up at Toronto's Collision conference, during my on-stage conversation with Andreessen Horowitz general partner Anish Acharya last week.
- While startups today can be located nearly anywhere without investor prejudice, many VCs still encourage co-location for the early teams.
- Acharya's firm has backed Launch House, for example, which operates a sort of "hacker houses" for entrepreneurs and other techies, so they can tap into the in-person experience.
Other trends: Adjusting startup compensation based on location remains the norm across the industry, though more are location-agnostic the higher their valuation.
- The Bay Area, Seattle and New York City remain the top hubs for compensation, with 10 metro areas offering at least 90% of San Francisco's rates.
- Miami is also getting a special award for paying its tech workers well above the standard adjustments recommended by the Bureau of Labor Statistics, more than any other city. They make 90% of a San Francisco workers' salary, while the standard BLS adjustment puts them at only 68%.
The bottom line: Some aspects of startup hiring are definitely changing.
LG Energy Solution, the South Korean battery maker and supplier to Tesla and others, said it's reassessing a $1.3 billion investment plan for a factory in Arizona, citing "unprecedented" economic conditions.
Why it's the BFD: Factory investments in the U.S. have had a bumpy ride lately. Last year, Foxconn said it's scaling back its massive plant plans. Recently, it emerged that Intel would get even more tax breaks for its big chip factory.
The bottom line: The markets are taking the news badly, with investors knocking down LGES' stock by nearly 5% in early trade.
- "It comes as more firms review business plans, fearing a drop in consumer demand amid roaring U.S. inflation mainly caused by global supply chain disruption." — Heekyong Yang, Reuters
Venture Capital Deals
• Arzooo, an Indian retail software startup, raised $70m in new funding at a $310m valuation led by SBI Investment and Trifecta Leaders Fund, with Tony Xu, Celesta Capital and 3 Lines VC also participating. http://axios.link/I5kf
• Entrepreneur First, a U.K.-based investor and startup program, raised $158m in funding round from a long list of tech entrepreneurs and investors. http://axios.link/aPjn
• DataArt, a New York-based software engineering firm, raised $75m in funding from FTV Capital. www.dataart.com
• Shop Circle, a U.K.-based e-commerce software startup, raised $65m in funding led by NFX and QED Investors, with 645 Ventures, FirstMinute Capital and Triple Point Capital also participating. http://axios.link/H7tp
• Cyolo, an Israeli enterprise security startup, raised $60m in Series B funding led by National Grid Partners, with Glilot Capital Partners, Flint Capital, Differential Ventures, and Merlin Ventures also participating. http://axios.link/AOQ9
• PolySign, a San Francisco-based provider of digital asset infrastructure for institutional investors, raised $53m in Series C funding from Cowen Digital, Brevan Howard, GSR and others. http://axios.link/9Fhs
• Atomo Coffee, a Seattle-based imitation coffee startup, raised $40m in Series A funding from S2G Ventures, AgFunder, and Horizons Ventures. http://axios.link/vMJQ
🚑 Visby Medical, a San Jose-based medical diagnostic company, raised $35m in additional Series E funding led by Lightrock. www.visbymedical.com
🚑 Birdie, a U.K.-based home health care company, raised $30m in Series B funding led by Sofina and OMERS Ventures, with Index Ventures also participating. www.birdie.care
• Audience, a Miami-based automated outbound marketing platform, raised $10m in Series A funding led by Next Coast Ventures. www.audience.co
• Salesroom, a Boston-based sales software startup, raised $8.5m in seed funding led by Craft Ventures, with Village Global, Seedcamp, WndrCo, and Asymmetric Capital also participating. www.salesroom.com
• Dynamic.xyz, a Palo Alto, Calif.-based crypto and NFT wallet developer tool startup, raised $7.5m in seed funding led by Andreessen Horowitz, with First Round Capital, Castle Island Ventures, Solana Ventures, Chapter One, and Circle Ventures also participating. www.dynamic.xyz
• Swave Photonics, a Belgian holographic imaging startup, raised $7.4m in seed funding led by Imec.xpand and Flanders Future Techfund, with QBIC also participating. http://axios.link/LDvP
• Hank, a New York-based digital activities marketplace for adults 55 and over, raised $7m in seed funding led by General Catalyst and Resolute Ventures. https://www.gethank.com/
🚑 Strive, a Seattle-based muscle data platform, raised $6m in Series A funding led by Future Communities Capital, with Jonathan Taylor, Troy Smith, and others also participating. www.strive.tech
• Bit Odd, a Finnish gaming company, raised €5m in seed funding led by Index Ventures. www.bit-odd.com
• OpenReplay, a French maker of open-source session replay tools for developers, raised $4.7m in seed funding led by Runa Capital with Expa, 468 Capital, Rheinghau Founders and the co-founders of Tekion also participating. http://axios.link/d6x0
• Adwisely, a Wilmington, Del.-based ad automation startup, raised $1.5m in seed funding led by TMT Investments, with Gaingels, Mana Ventures, Cabra VC, and ICU Ventures also participating. http://axios.link/JwV0
Private Equity Deals
• Progcap, an Indian provider of SMB financing, raised $40m in additional Series C funding led by Creation Investments Capital Management, Tiger Global, and Google, with Sequoia Capital India also participating. http://axios.link/cVg3
• FloWorks International, backed by Clearlake Capital Group, acquired netMercury, a Houston-based specialty parts and services distributor. www.netmercury.net
• Creative Artists Agency completed its acquisition of ICM Partners, a Los Angeles-based talent agency, for between $750m-$800m, Axios has learned. Crestline generated a 2x cash return on its total investment of about $150m. http://axios.link/1eC7
• Tonka Bay Equity Partners agreed to sell Seaway Plastics Engineering, a Port Richey, Fla.-based manufacturer of engineered plastic components, to Intermediate Capital Group. www.seawayplastics.com
• Alpine Investors acquired Hotel Effectiveness, an Alpharetta, Ga.-based hotel labor management SaaS company. www.hoteleffectiveness.com
• Memsource, a Czech translation management company, raised €15m in new funding led by Carlyle, with existing investors also participating. www.memsource.com
• Reborn Coffee, a Brea, Calif.-based coffee product retailer, now plans to offer shares of common stock in its $17m IPO. The company originally planned to offer units containing one share of common stock and one warrant. It plans to list on the Nasdaq under the symbol REBN. EF Hutton is the sole bookrunner on the deal. http://axios.link/P6X1
🚑 Norstella and Citeline have agreed to merge. http://axios.link/uELv
• MassMutual Ventures raised $100m for a new fund backing early and growth-stage companies in the financial technology, cybersecurity, enterprise SaaS, and digital health sectors. www.massmutualventures.com
• CIBC Innovation Banking has $1.5b in commitments for debt investments into later-stage companies across software, life sciences, healthcare and cleantech industries. http://axios.link/phFl
• Drive Capital, a Columbus, Ohio-based VC firm, raised $1b in new venture funds. http://axios.link/erFS
• Coalition has raised $12.5m for an early-stage venture fund. http://axios.link/BBL1
• Simple Food Ventures, a New York-based venture firm focused on CPG food companies, has closed $6m of its $15m fund target. www.simplefoodvc.com
• Permira has added Simon Segars, ex-CEO of Arm, as a senior adviser to its technology team. www.permira.com
• Acton Capital has hired Sophie Ahrens-Gruber in Munich, and added Hannes Blum as a new partner to head its investments in Canada and the U.S. www.actoncapital.com
• NEA has promoted Tiffany Le and Jess Ou to principal, and Zak Burns, Henry Magun, Alex Sharata, and Emily Zhen to senior associate. www.nea.com
• Andrew Formica is stepping down as CEO of Jupiter Fund Management. http://axios.link/WTES
• Newark Venture Partners hired Kiswana Browne as a senior associate and Chika Ogele as an associate, and promoted Sean Simons to associate. www.newarkventurepartners.com
- Remember when Elon was a daily news fixture?
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