Connect with us

Techcrunch

Traditional VCs turn to emerging managers for deal flow and, in some cases, new partners

Published

on

Nasir Qadree, a Washington-based investor who just raised $62.1 million for his debut venture fund, recently told us that as his fundraising gained momentum, he was approached by established firms that are looking to absorb new talent.

He opted to go it alone, but he’s hardly alone in attracting interest. Anecdotally, bringing emerging managers into the fold is among the newer ways that powerful venture firms stay powerful. Early last year, for example, crypto investor Arianna Simpson — who founded and was managing her own crypto-focused hedge fund — was lured into the heavyweight firm Andreessen Horowitz as a deal partner.

Andy Chen, a one-time CIA weapons analyst who spent more than seven years with Kleiner Perkins, was in the process of raising his own fund in 2018 when another prominent firm, the hedge fund Coatue, came knocking. Today he helps lead the firm’s early-stage investing practice.

It’s easy to understand the appeal of such firms, which manage enormous funds and wield tremendous power with founders. Still, as older firms look to recruit from a widening pool of new managers, they might have to wait on the most talented of the bunch; in some cases, they might be out of luck entirely.

There is, of course, a long list of reasons that so many people are deciding to raise funds these days, from the glut of capital looking to make its way into startups, to tools like Angelist’s Rolling Funds and revised regulations around crowdfunding in the U.S.

Emerging managers also seem adept at capitalizing on the venture industry’s blind spots. One is the excessive wealth of more veteran VCs. An investor’s experience counts for a lot, but there’s a lot to be said for up-and-comers who are still establishing their reputation, who aren’t sitting on more than a dozen boards, and whose future will be closely aligned with their founders.

Yet there are other trends the establishment has long overlooked for too long. Many firms probably regret not taking crypto more seriously sooner. Many male-heavy teams have also ignored for too long the soaring economic power of women, which new managers are driving home to their own investors.

Not last, many have stubbornly resisted racially diversifying their ranks, creating an opening for investors of color who are acutely aware of changing demographics. According to census projections, white Americans will represent a minority of the U.S. population within 20 years, meaning today’s racial minorities are becoming the primary engine of the country’s growth.

That new managers have shaken up the industry is arguably a good thing. The question some are beginning to wonder is whether they can maintain their independence, and that answer isn’t yet clear.

Like the startups they fund, many of these new managers are right now operating in the shadows of the firms that came before them. It’s a seemingly copacetic arrangement, too. Venture is an industry where collaboration between business competitors is inescapable after all, and it’s easy to stay on the good side of giant firms when you’re investing a non-threatening amount into nascent companies you’ll later introduce to the bigger players.

Ensuring that things remain harmonious — and that deal flow keeps coming — a growing number of venture firms now plays the role of limited partner, committing capital to new managers. Foundry Group was among the first to do this in an institutionalized way five years ago, setting aside 25% of a new fund to pour into smaller venture funds. But it’s happening routinely across the industry. Jake Paul’s new influencer-focused fund? Backed by Marc Andreessen and Chris Dixon of Andreessen Horowitz. Katie Stanton’s Moxxie Ventures? Backed by Bain Capital Ventures.

The running joke is that big firms have raised so much money they don’t know where to plug all of it, but they’re also safeguarding what they’ve built. That was the apparent thinking in 2015, when a then-beleaguered Kleiner Perkins tried to engage in merger talks with Social Capital, a buzzed-about venture firm founded by Chamath Palihapitiya. (The deal reportedly fell apart over who would ultimately run the show. Kleiner subsequent underwent a nearly complete management change to regain its footing, while numerous members of Social Capital left to start Tribe Capital.)

It’s also why we might see more venture firms begin to gauge the interest of new fund managers who they think could add value to their brand.

Likely, some will say yes for the sheen and economics of a big firm and because teaming up can be far easier than going it alone. Early-stage investor Semil Shah — who has built up his own firm while also working as a venture partner with different, established outfits (including, currently, Lightspeed Venture Partners) — thinks it’s “natural to assume that lots of new rolling funds” in particular will either “burn out, stay small, or try to scale and realize how hard it is, and perhaps go to a bigger firm once they have established a track record.”

If true, it’s not a scenario that’s as widely embraced as some might imagine. Eric Bahn, who cofounded the Bay Area-based seed-stage firm Hustle Fund in 2017, predicted last week on Twitter< that “establishment VC funds will acquire emerging VC funds, who are building differentiated networks/brands.” While in a different era, that might be seen as a cushy landing, Bahn added: “Not sure how I feel about this. 🤔”

He also later tweeted that “to be unequivocal, Hustle Fund is not for sale.”

For his part, Bahn says he’s “nervous about industry consolidation.” There have been “systemic issues with VCs being exclusionary in the past when it comes to women and other underrepresented groups.” He adds that even more recently he has “met LPs who — wink wink — really like men who come from Stanford and have computer science degrees,” leading him to fret that even a team with “good intentions can revert back to the mean.”

An industry friend of Bahn, Lolita Taub of The Community Fund —  a $5 million early-stage fund that is focused on community-themed startups and backed by the Boston-based seed-stage venture firm Flybridge — is more sanguine about emerging managers’ ability to remain independent. Rather than gobble up smaller funds, she foresees more established players begin to fund — and nurture — emerging funds that have overlapping areas of interest.

Taub suggests that it’s the next step beyond VCs who’ve worked with so-called scouts to find undiscovered gems. “I think older players are looking to expand their reach beyond what they know.”

Both may be right. Either way, the industry is changing shape and some form of consolidation, though not imminent, seems inevitable once the checks inevitably stop flying. Some firms will break out, while others team up. Some managers will find themselves at top firms, while others close up shop.

Almost the only certainty right now is that a larger fund “buying” a smaller fund is “not that complicated,” according to fund administration expert Bob Raynard of Standish Management in San Francisco.

Asked about the mechanics of such tie-ups, he shares that it “generally involves changing or adding members at the GP entity level [leading to a] change in control of the funds.”

Maybe, too, he says, there is a rebranding.

The real challenge, suggests Raynard, is just “getting two VCs to agree on a value.” And that depends entirely on their other options.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://techcrunch.com/2021/07/16/traditional-vcs-turn-to-emerging-managers-for-deal-flow-and-in-some-cases-new-partners/

Techcrunch

Brain Technologies raises $50M+ for the launch of Natural, a natural language search engine and ‘super app’

Published

on

Voice-based and other personal assistant apps — which use natural language and hefty AI engines in the backend to source information to address your various questions, do your e-commerce bidding, or control one electronic device or another in your home — have been around for years, but too often they have come up short when it comes to user experience, failing to nail the right solutions to your queries. Today a new app is launching from a startup that has largely been in stealth mode up to now to try to address that disparity. Brain Technologies is today announcing $50 million in funding, and along with that is releasing Natural, an iOS app, in the US market.

The $50 million (which is actually described as “over $50 million” by the company, with an exact number undisclosed), meanwhile, is coming from a very interesting mix of investors — backers include Laurene Powell Jobs’ Emerson Collective, Goodwater Capital, Scott Cook and WTT Investment, a list that underscores some of the attention that Brain has been getting, even before having released a single product.

Prior to this round, Brain had raised $1.5 million back in 2016 from an unnamed investor while still in stealth mode.

Jerry Yue, the young founder and CEO of Brain — a repeat entrepreneur and robotics enthusiast whose last company, a grocery delivery service in China called Benlai, is still going strong — said in an interview that he does not like to call Natural a “personal assistant” app, not because of the shortcomings of so many of these in the past, but because of the voice association many have with the concept.

“We don’t position ourselves as a voice assistant because we don’t think the future is voice only,” he said. “It should be the right combination of voice and native app experience.”

Instead, he describes what Natural is as the world’s first “generative computer interface”, the logical progression in digital information search.

That progression, in his view, started with the web, progressed to search engines, and then apps, before landing where he sees it today. Natural brings all of these together in some degree. Currently, you speak or type any kind of question or command into the app, which then provides a solution that might be in the form of links to other apps you might have.

For example, “I’d like sushi tonight,” will bring back options (in theory) for ordering sushi, and possibly your most favored dishes, from a selection of restaurants by way of food ordering apps that you use, or places to go eat it, as well as options for making that sushi yourself (and buying the ingredients online to do so, as well as a method).

Similarly, travel searches return results that dip into multiple silos from, say, airlines and airline aggregators that are easily editable and that you can buy directly from those results, if you already have payment details on your device. (While Google provides this to some degree, you eventually have to navigate to sites to buy tickets, which might end up significantly more expensive when you actually visit said sites.)

The more you use the app, the theory is that it will learn more about what you might want from your questions.

AI that anticipates what we are trying to say or do is something that has been attempted before, of course, but the difference here, Yue said, is in Brain’s approach, which is based on the concept of “one shot” learning, which he described as a kind of general purpose AI, “a tool that learns to use other tools.”

The alternative is a more labor-intensive approach that AI-based systems are typically built on today, largely based around keywords. “AIs from Google or Amazon are based on thousands of people and human coding to connect services,” he said. “This approach treats natural language processing as a classification problem.” In contrast, the breakthrough system he and his team have devised, he said, “has learned more than 4 million functions on its own.” Ironically, the end result of a successful AI like this is not to make us feel more technologically powerful, but to get us away from our devices, and spending time fussing on them, and into the world.

Given that this is a consumer app, it will be interesting to see how and if there is mass takeup of Natural, and whether the right combination of anticipatory AI with natural language and design come together to pique collective attention. The team and what they’ve built in any case will be a hot property, given that AI will continue to be a strong and growing presence in the tech landscape for years to come.

“What Jerry and his team are developing is incredibly special. I’m not aware of anyone doing more interesting work to demonstrate how fundamentally AI can enhance our everyday lives,” said investor Scott Cook, who was also the founder of financial software giant Intuit, in a statement.

“Many of us remember the first time we used an iPhone. The software felt magical, and every animation felt dynamic yet subtle,” said Tom Goodwin, a Natural beta customer. “Experiencing this app is the closest thing I’ve felt to that for a long time. I love the idea of one place to go for everything.”

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://techcrunch.com/2021/07/28/brain-technologies-raises-50m-for-the-launch-of-natural-a-natural-language-search-engine-and-super-app/

Continue Reading

Techcrunch

Brain Technologies raises $50M+ for the launch of Natural, a natural language search engine and ‘super app’

Published

on

Voice-based and other personal assistant apps — which use natural language and hefty AI engines in the backend to source information to address your various questions, do your e-commerce bidding, or control one electronic device or another in your home — have been around for years, but too often they have come up short when it comes to user experience, failing to nail the right solutions to your queries. Today a new app is launching from a startup that has largely been in stealth mode up to now to try to address that disparity. Brain Technologies is today announcing $50 million in funding, and along with that is releasing Natural, an iOS app, in the US market.

The $50 million (which is actually described as “over $50 million” by the company, with an exact number undisclosed), meanwhile, is coming from a very interesting mix of investors — backers include Laurene Powell Jobs’ Emerson Collective, Goodwater Capital, Scott Cook and WTT Investment, a list that underscores some of the attention that Brain has been getting, even before having released a single product.

Prior to this round, Brain had raised $1.5 million back in 2016 from an unnamed investor while still in stealth mode.

Jerry Yue, the young founder and CEO of Brain — a repeat entrepreneur and robotics enthusiast whose last company, a grocery delivery service in China called Benlai, is still going strong — said in an interview that he does not like to call Natural a “personal assistant” app, not because of the shortcomings of so many of these in the past, but because of the voice association many have with the concept.

“We don’t position ourselves as a voice assistant because we don’t think the future is voice only,” he said. “It should be the right combination of voice and native app experience.”

Instead, he describes what Natural is as the world’s first “generative computer interface”, the logical progression in digital information search.

That progression, in his view, started with the web, progressed to search engines, and then apps, before landing where he sees it today. Natural brings all of these together in some degree. Currently, you speak or type any kind of question or command into the app, which then provides a solution that might be in the form of links to other apps you might have.

For example, “I’d like sushi tonight,” will bring back options (in theory) for ordering sushi, and possibly your most favored dishes, from a selection of restaurants by way of food ordering apps that you use, or places to go eat it, as well as options for making that sushi yourself (and buying the ingredients online to do so, as well as a method).

Similarly, travel searches return results that dip into multiple silos from, say, airlines and airline aggregators that are easily editable and that you can buy directly from those results, if you already have payment details on your device. (While Google provides this to some degree, you eventually have to navigate to sites to buy tickets, which might end up significantly more expensive when you actually visit said sites.)

The more you use the app, the theory is that it will learn more about what you might want from your questions.

AI that anticipates what we are trying to say or do is something that has been attempted before, of course, but the difference here, Yue said, is in Brain’s approach, which is based on the concept of “one shot” learning, which he described as a kind of general purpose AI, “a tool that learns to use other tools.”

The alternative is a more labor-intensive approach that AI-based systems are typically built on today, largely based around keywords. “AIs from Google or Amazon are based on thousands of people and human coding to connect services,” he said. “This approach treats natural language processing as a classification problem.” In contrast, the breakthrough system he and his team have devised, he said, “has learned more than 4 million functions on its own.” Ironically, the end result of a successful AI like this is not to make us feel more technologically powerful, but to get us away from our devices, and spending time fussing on them, and into the world.

Given that this is a consumer app, it will be interesting to see how and if there is mass takeup of Natural, and whether the right combination of anticipatory AI with natural language and design come together to pique collective attention. The team and what they’ve built in any case will be a hot property, given that AI will continue to be a strong and growing presence in the tech landscape for years to come.

“What Jerry and his team are developing is incredibly special. I’m not aware of anyone doing more interesting work to demonstrate how fundamentally AI can enhance our everyday lives,” said investor Scott Cook, who was also the founder of financial software giant Intuit, in a statement.

“Many of us remember the first time we used an iPhone. The software felt magical, and every animation felt dynamic yet subtle,” said Tom Goodwin, a Natural beta customer. “Experiencing this app is the closest thing I’ve felt to that for a long time. I love the idea of one place to go for everything.”

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://techcrunch.com/2021/07/28/brain-technologies-raises-50m-for-the-launch-of-natural-a-natural-language-search-engine-and-super-app/

Continue Reading

Automotive

Redwood Materials raises $700M to expand its battery recycling operation

Published

on

Redwood Materials CEO JB Straubel shared his aspirations last year to turn the startup he co-founded in 2017 into one of the world’s major battery recycling companies. Now, the former Tesla co-founder and CTO has the money to accelerate those plans.

Redwood Materials said Wednesday it raised $700 million from high-profile institutional investors and venture firms, providing the capital needed to expand its existing operations well beyond its Carson City, Nevada, home base to locations throughout North America and even into Europe.

The Series C round was led by funds and accounts advised by T. Rowe Price Associates and included Goldman Sachs Asset Management, Baillie Gifford, Canada Pension Plan Investment Board, and Fidelity. Previous investors — Capricorn’s Technology Impact Fund, Bill Gates’ Breakthrough Energy Ventures and Amazon’s Climate Pledge Fund — returned to put more capital into Redwood. Valor Equity Partners, Emerson Collective and Franklin Templeton also participated, the company said.

Redwood previously raised $40 million in a Series B and some seed money, which brings its total raise under $800 million, according to the company.

The company’s post-funding valuation is $3.7 billion, according to a source familiar with the investment round. Redwood declined to comment on the figure.

Redwood Materials is aiming to create a circular supply chain. This closed-loop system, Straubel said, will be essential if the world’s battery cell producers hope to have the supply needed for consumer electronics and the coming wave of electric vehicles.

Redwood recycles scrap from battery cell production and consumer electronics like cell phone batteries, laptop computers, power tools, power banks, scooters and electric bicycles. It then processes these discarded goods, extracting materials like cobalt, nickel and lithium that are typically mined, and then supplies those back to its customers, which today includes Panasonic at the Gigafactory in Nevada that it operates with Tesla and Envision AESC’s battery plant in Tennessee. Redwood has also partnered with Amazon to recycle EV and other lithium-ion batteries and e-waste from parts of their businesses.

“In our view, the need for these materials will grow exponentially over time as we enter the era of de-carbonization,” Joe Fath, portfolio manager of the T. Rowe Price Growth Stock Fund, said in a statement, adding that “Redwood is well-positioned to be at the forefront of tackling this emerging and critically important problem.”

Straubel sees a bottleneck coming as the whole supply chain seeks to access critical materials. That will affect the growth rate and challenge automakers like Ford, GM and Volkswagen that have laid out ambitious plans to electrify their portfolios.

That problem is likely to compound as more automakers go down the electric path. Last week, Mercedes-Benz said it will spend €40 billion ($47 billion) to become an electric-only automaker by the end of the decade. The German automaker determined it will need battery capacity of more than 200 gigawatt-hours. To meet those needs, Mercedes plans to set up eight battery factories with existing partners and one new partner to produce cells.

Straubel said it’s time for Redwood to scale more aggressively.

Those plans were already well underway even before it closed the $700 million round, Straubel noted. The company announced in June it had purchased 100 acres of land near the Gigafactory that Panasonic operates with Tesla in Sparks, Nevada. Redwood now has some operations at the site.

Redwood is also in the process of nearly tripling the size of its existing 150,000-square-foot facility in Carson City, Nevada. The new 400,000-square-foot addition onto the recycling facility is expected to be operational by the end of the year.

To support the growth, Redwood started hiring more employees, with plans to add more than 500 jobs over the next two years. Redwood employs more than 130 people today.

The company has expanded in other ways as well, including the launch of a program that allows consumers to send in personal electronics such as smartphones to be recycled.

“This additional equity to some extent helps us finish all those things, but it’s not really the primary purpose for all of it,” Straubel said.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://techcrunch.com/2021/07/28/redwood-materials-raises-700m-to-expand-its-battery-recycling-operation/

Continue Reading

Automotive

Redwood Materials raises $700M to expand its battery recycling operation

Published

on

Redwood Materials CEO JB Straubel shared his aspirations last year to turn the startup he co-founded in 2017 into one of the world’s major battery recycling companies. Now, the former Tesla co-founder and CTO has the money to accelerate those plans.

Redwood Materials said Wednesday it raised $700 million from high-profile institutional investors and venture firms, providing the capital needed to expand its existing operations well beyond its Carson City, Nevada, home base to locations throughout North America and even into Europe.

The Series C round was led by funds and accounts advised by T. Rowe Price Associates and included Goldman Sachs Asset Management, Baillie Gifford, Canada Pension Plan Investment Board, and Fidelity. Previous investors — Capricorn’s Technology Impact Fund, Bill Gates’ Breakthrough Energy Ventures and Amazon’s Climate Pledge Fund — returned to put more capital into Redwood. Valor Equity Partners, Emerson Collective and Franklin Templeton also participated, the company said.

Redwood previously raised $40 million in a Series B and some seed money, which brings its total raise under $800 million, according to the company.

The company’s post-funding valuation is $3.7 billion, according to a source familiar with the investment round. Redwood declined to comment on the figure.

Redwood Materials is aiming to create a circular supply chain. This closed-loop system, Straubel said, will be essential if the world’s battery cell producers hope to have the supply needed for consumer electronics and the coming wave of electric vehicles.

Redwood recycles scrap from battery cell production and consumer electronics like cell phone batteries, laptop computers, power tools, power banks, scooters and electric bicycles. It then processes these discarded goods, extracting materials like cobalt, nickel and lithium that are typically mined, and then supplies those back to its customers, which today includes Panasonic at the Gigafactory in Nevada that it operates with Tesla and Envision AESC’s battery plant in Tennessee. Redwood has also partnered with Amazon to recycle EV and other lithium-ion batteries and e-waste from parts of their businesses.

“In our view, the need for these materials will grow exponentially over time as we enter the era of de-carbonization,” Joe Fath, portfolio manager of the T. Rowe Price Growth Stock Fund, said in a statement, adding that “Redwood is well-positioned to be at the forefront of tackling this emerging and critically important problem.”

Straubel sees a bottleneck coming as the whole supply chain seeks to access critical materials. That will affect the growth rate and challenge automakers like Ford, GM and Volkswagen that have laid out ambitious plans to electrify their portfolios.

That problem is likely to compound as more automakers go down the electric path. Last week, Mercedes-Benz said it will spend €40 billion ($47 billion) to become an electric-only automaker by the end of the decade. The German automaker determined it will need battery capacity of more than 200 gigawatt-hours. To meet those needs, Mercedes plans to set up eight battery factories with existing partners and one new partner to produce cells.

Straubel said it’s time for Redwood to scale more aggressively.

Those plans were already well underway even before it closed the $700 million round, Straubel noted. The company announced in June it had purchased 100 acres of land near the Gigafactory that Panasonic operates with Tesla in Sparks, Nevada. Redwood now has some operations at the site.

Redwood is also in the process of nearly tripling the size of its existing 150,000-square-foot facility in Carson City, Nevada. The new 400,000-square-foot addition onto the recycling facility is expected to be operational by the end of the year.

To support the growth, Redwood started hiring more employees, with plans to add more than 500 jobs over the next two years. Redwood employs more than 130 people today.

The company has expanded in other ways as well, including the launch of a program that allows consumers to send in personal electronics such as smartphones to be recycled.

“This additional equity to some extent helps us finish all those things, but it’s not really the primary purpose for all of it,” Straubel said.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.
Click here to access.

Source: https://techcrunch.com/2021/07/28/redwood-materials-raises-700m-to-expand-its-battery-recycling-operation/

Continue Reading
Esports4 days ago

Teppei Genshin Impact Voice Actor: Who is it?

Esports4 days ago

Who won Minecraft Championships (MCC) 15? | Final Standings and Scores

Esports5 days ago

Can You Play Pokemon UNITE Offline?

Esports4 days ago

All ranked mode rewards for Pokémon UNITE: Season 1

Aviation3 days ago

Legendary F-14 Pilot Dale ‘Snort’ Snodgrass Dies In A Tragic Plane Crash

Cleantech4 days ago

Form Energy Reveals Iron-Air 100 Hour Storage Battery

Esports4 days ago

Sakura Arborism Genshin Impact: How to Complete

Esports4 days ago

Here are the results for the PUBG Mobile World Invitational (PMWI) West 2021

watch-live-russias-pirs-module-set-to-depart-space-station-today.jpg
Aerospace2 days ago

Watch live: Russia’s Pirs module set to depart space station today

Esports4 days ago

Here are the results for the PUBG Mobile World Invitational (PMWI) East 2021

Techcrunch4 days ago

This Week in Apps: Clubhouse opens up, Twitter talks bitcoin, Snap sees record quarter

best-gengar-build-in-pokemon-unite.png
Esports4 days ago

Best Gengar build in Pokémon UNITE

Cyber Security4 days ago

Threat Actors are Abusing Argo Workflows to Target Kubernetes

Esports4 days ago

Are there ranked rewards in Pokémon UNITE?

Cyber Security4 days ago

What Programming Language Should I Learn for CyberSecurity?

Esports4 days ago

Best Garchomp build in Pokémon UNITE

AR/VR4 days ago

Warplanes: WW1 Fighters to See Official Oculus Quest Store Launch This Week

Blockchain4 days ago

Canadian Border Town Halts Crypto Mining to Draw Up Regulations

Esports4 days ago

How to unlock Pokémon in Pokémon UNITE, all Unite License costs

AI4 days ago

What is the Freedom Phone and Should You Buy It?

Trending