Peter Thiel's Founded VC Firm Raised $300 Million & OpenAI's $250Million Deal With WSJ

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👋 Hey, Sahil here! Welcome to today's quick rundown in the Venture Daily Digest Newsletter. I've got the scoop on startup fundraising, fresh VC funds, and some cool tech – all in just 5 minutes ☕! Today’s major updates include -

• Valar Ventures, a VC firm co-founded by Peter Thiel, has raised a $300 million fund, much smaller than its previous funds of over $600 million.

• OpenAI has signed a deal of over $250 million to gain access to content from various News Corp publications like The Wall Street Journal and MarketWatch.

• Firefly Aerospace Inc. investors are considering a sale that could value the rocket and moon lander maker at about $1.5 billion.

• Oyo, the Indian budget hotel chain, has withdrawn its IPO application from SEBI for the second time, attempting to raise funds at a valuation as low as $2-2.3 billion, a steep decline from its once $10 billion valuation peak.

• Featured Article : Hidden Trap Of Convertible Note and Liquidation Preference Multiples.

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STARTUP FUNDING UPDATES

Coactive Systems, a San Jose, CA-based AI powered platform to make image and video data useful, raised $30m in Series B funding at a $200m valuation. The round was co-led by Emerson Collective andCherryrock Capital, with participation from Bessemer Venture Partners, Greycroft, and previous investor Andreessen Horowitz. More Here

SixPeaks Bio AG, a Basel, Switzerland-based obesity company developing therapies for healthy weight loss, raised $110M in funding. The company has secured $30M in Series A financing led by founding investor Versant Ventures and a strategic collaboration with AstraZeneca. Under the terms of the collaboration, AstraZeneca participated in the Series A financing and is committing up to $80M in capital including upfront and near-term payments. More Here

HoundDog.ai, a San Francisco-based startup, helps developers ensure their code doesn't leak personally identifiable information (PII). It announced a $3.1 million seed round led by E14, Mozilla Ventures, and ex/ante, along with angel investors. More Here

Allez Health, fka Zense-Life, a San Diego, CA-based provider of a continuous glucose monitoring (CGM) biosensor platform, raised a $60M Series A+ financing. The round was led by Osang Healthcare Co., with participation from existing investors. More Here

healthŌme, a Huntsville, AL-based genomics-based precision health management company, raised an undisclosed amount in Seed funding. The round was led by American Family Ventures (AFV) and AllegisNL Capital. More Here'

Skribe.ai, an Austin, TX-based legaltech platform, raised $3.5M in funding from undisclosed investors. More Here

Hydrolix, a Portland, Ore.-based streaming data lake platform, closed a $35m Series B funding. The round was led by S3 Ventures. Prior investors such as Nava Ventures, Wing Ventures, AV8 Ventures and Oregon Venture Fund also participated in this round, which brought the company’s total funding to date to $68m. More Here

Patronus AI, a San Francisco, CA-based provider of an automated evaluation and security platform, raised $17M in Series A funding. The round, which brought the total amount to $20M, was led by Glenn Solomon at Notable Capital with participation from Lightspeed Venture Partners, Datadog, Gokul Rajaram, Factorial Capital, and software and AI executives. More Here

Sinn Studio Inc., a Toronto, Canada-based XR studio, closed a $2.5m funding round. The round was led by Hartmann Capital, with participation from Boost VC, Republic, Alumni Ventures, Mana Ventures, MetaVision, and a number of industry angels such as Chris Ye of Uken Games. More Here

Artemis, a Vancouver, BC, Canada-based technology startup innovating data preparation to address data quality challenges, secured $1.5m in pre-seed funding. The round was led by Raven Indigenous Capital Partners, with participation from Telegraph Hill Capital, Ripple Ventures, and other angel investors. More Here

Volt, a Tusla, OK-based Messaging Operations (Ops) infrastructure platform that enables software companies to integrate with multiple SMS providers and streamline number registration compliance and delivery reporting, closed its $3m seed funding round. The round was led by Mercury, with participation from Atento Capital, Uncorrelated Ventures, Stout Street Capital, and Yellow Rocks. More Here

Unify, a British startup founded by Imperial College alum Daniel Lenton, aims to provides a router tool that helps developers find the best large language model (LLM) for their specific requirements, optimizing for quality, cost, and speed. has raised $8 million from investors including SignalFire, M12, J12, Essence VC, A. Capital, Lunar VC, and Y Combinator. More Here

SOCRadar, a Newark, DE-based provider of enterprise-grade, end-to-end threat intelligence and brand protection solutions, raised $25.2M in Series B funding. The round was led by PeakSpan Capital, with participation from Oxx. More Here

Aerodome, a Los Angeles CA-based company which specializes in Drone-As-First-Responder (DFR) technology, raised $21.5M in Series A funding. The round, which brought the total amount to $28M, was led by CRV with participation from Andreessen Horowitz (a16z), Karman Ventures, Immad Akhund (CEO, Mercury), and Ford Street Ventures. More Here

DeepL, a Cologne, Germany-based company that builds automated text translation and writing tools powered by AI, has raised an additional $300 million at a $2 billion valuation. The round was led by Index Ventures. More Here

Verse, a San Francisco, CA-based company providing software that enables organizations to understand, plan, and manage clean energy, raised a $20.5M Series A funding. The round was led by GV with participation from Coatue, CIV, and MCJ Collective. More Here

Majority, a Miami, FL-based provider of a platform offering mobile banking and international services to migrants in the US, raised $20M in funding. The round included $12.5M in equity and $7.5M in debt financing from a bank. The add-on funding was led by a group of fintech founders including Victor Jacobsson, co-founder of Klarna and the Swedish serial entrepreneur, Hjalmar Winbladh with participation of Magnus Nilsson and Jacob de Geer, co-Founders of Izettle, plus follow-on venture capital firms Valar Ventures, Heartcore Capital and Avid Ventures. More Here

WeatherXM AG, a Zug, Switzerland-based contributor to the WeatherXM Network, a provider of a decentralized physical infrastructure network (DePIN), raised $7.7M in Series A funding. The round was led by Lightspeed Faction. Additional participating investors included Protocol Labs, Borderless Capital, Arca, Alumni Ventures, Placeholder VC, Red Beard Ventures, Metaplanet, GS Futures, Consensys Mesh, Westerly Ventures, dlab, Eleftherios Diakomichalis and Juan Benet. More Here

Vaxess Technologies, a Cambridge, MA-based life sciences company developing a shelf-stable MIMIX skin patch for vaccines and therapeutics, raised $12M in funding. Backers included RA Capital Management, Engine Ventures, GHIC, and Mission Bio Capital. This brings Vaxess’s total equity and non-dilutive funding to more than $90M. More Here

Bolster, a Santa Clara, CA-based company which specializes in multi-channel phishing protection, raised $14M in Series B funding. The round was led by M12 with participation from existing investors Thomvest Ventures, Crosslink Capital, Liberty Global Ventures, Cheyenne Ventures, Cervin Ventures, and Transform Capital. More Here

Max Retail, a West Palm Beach, FL-based marketplace for independent retailers and brands to sell excess inventory, raised $15M in Series A funding. The round was led by Nosara Capital with participation from Rethink Impact, M13, The Artemis Fund, StandUp Ventures. More Here

Amino Health, a San Francisco, CA-based digital healthcare navigation company, raised $10M in funding. The round was led by Transformation Capital. More Here

Superlegal, a NYC-based provider of an AI platform for legal contract review for small and medium-sized businesses, raised $5M in Seed funding. The round was led by Aleph and Disruptive AI fund, with the participation of Alicorn Venture Capital, and Tom Glocer, the former CEO of Thomson Reuters. More Here

Cover Whale Insurance Solutions, a NYC-based insurtech company specializing in connected insurance for commercial auto, raised $27.5M in debt and equity from investment funds managed by Morgan Stanley Expansion Capital. More Here

PolarityTE, a Salt Lake City, UT-based clinical-stage biotechnology company developing regenerative tissue products, raised $22.5M in funding. Backers included institutional investors and current shareholders. In addition, the company closed on a new senior secured credit facility with the Avenue Venture Opportunities Fund, L.P. (“Avenue Venture Debt Fund” or “Avenue”), part of Avenue Capital Group. The credit agreement provides up to $10M in total term loan capital including a first tranche of $5M funded at closing. More Here

Captain T Cell, a Schoenefeld/Berlin, Germany-based biotechnology company developing T cells against solid tumors, raised €8.5M in Seed funding. Backers included i&i Biotech Fund I SCSp, Brandenburg Kapital GmbH, and HIL-INVENT Ges.m.b.H. More Here

Superpower, a San Francisco, CA-based provider of a healthcare platform, raised $4M in Pre-Seed funding. The round was led by Susa Ventures with participation from Long Journey Ventures, Family Fund, Atman VC, 24 Carrot VC, Focalpoint Partners, Seaside Ventures and angel investors Cameron and Tyler Winklevoss, Balaji Srinivasan, Scott and Cyan Banister, and Evan Charles Moore. More Here

Suno, a Cambridge, MA-based music creation platform, raised $125m in funding. Backers included Lightspeed Venture Partners, Matrix, Founder Collective, Nat Friedman, and Daniel Gross. More Here

RaiderChip, a Solares, Spain-based hardware design company, raised €1M in Seed funding from undisclosed investors. More Here

Praktika, a San Francisco-based language-learning app that uses AI-powered avatars to simulate private tutors, has raised $35.5 million in Series A funding led by Blossom Capital. With 1.2 million monthly active users and $20 million in annual revenue, Praktika leverages AI models like GPT-4 to provide personalized lessons with realistic tone and emotion. More Here

VENTURE CAPITAL UPDATES

Valar Ventures, a VC firm co-founded by Peter Thiel, has raised a $300 million fund, much smaller than its previous funds of over $600 million. Despite Thiel's renowned status, Valar's recent performance has been underwhelming, with some notable portfolio failures contributing to low returns for investors. More Here

Peterson Partners, a Salt Lake City, UT-based investment firm, announced that its private equity business, Peterson Private Equity, closed $265M in Fund X. The fund aims to make 12 operations, investing $10-25m in profitable and growth-oriented companies. More Here

FEATURED ARTICLE

Hidden Trap Of Convertible Note and Liquidation Preference Multiples.

Young entrepreneurs often get screwed by their angel investors on convertible notes and I know I can’t convince you not to do it so I’d like to offer one simple bit of advice to help you avoid getting screwed.

When you do a convertible note with a cap that converts into the next round of funding, one of the unintended consequences is that if you’re successful and raise at a larger price than your cap the early angels often get “multiple liquidation preferences” on their dollars in.

Here’s how it works:

• Let's say an angel invests $500,000 with a $5 million cap. That means they'll own at least 9% of your company if the conversion price exceeds the cap. If you raise funds at a lower price, their ownership goes up.

• Now, with a regular 1x liquidation preference, they'd be entitled to $500,000 if you sell the company for less than $5 million. If you sell for more, they'd rather take their ownership percentage instead of that liquidation preference, which acts like a safety net.

• Fast forward, You work your tail off for 18 months, securing a series of notes, and guess what? You're lucky enough to land $5M at $25M pre-money valuation. At this point, that early angel investor owns around 16.67% and probably still holds a 1x liquidation preference.

• Now here's where the trickery starts: When the initial note converts, instead of snagging a $500,000 liquidation preference, they'd cash in a mind-boggling $2.5 million liquidation preference—a whopping 5x increase!

If a VC pulled this move in an early-stage deal, their reputation would suffer, making it hard for them to work with other VCs or entrepreneurs. In VC financings, this term is clear, but on convertible notes, it happens subtly, catching entrepreneurs off guard – a silent and painful setback.

So here’s what every entrepreneur should add immediately to any convertible note

"If this note converts at a price higher than the cap that you have been given you agree that in the conversion of the note into equity you agree to allow your stock to be converted such that you will receive no more than a 1x non-participating liquidation preference plus any agreed interest."

Papering this when it converts is super easy if the angel has already consented to it and they are not being cheated at all. They get their full investment as a 1x liquidation preference.

And please don’t let any angel try to convince you they deserve more for the early risk. The early risk is why they get a cheaper price…Read More Here

STARTUP’S LATEST BUZZ

ACQUISITION & EXITS

Firefly Aerospace Inc. investors are considering a sale that could value the rocket and moon lander maker at about $1.5 billion. The company, backed by AE Industrial Partners, has contracts with the Department of Defense, NASA, and commercial satellite operators for its Alpha rocket and Blue Ghost spacecraft. Investors have supported Firefly's growth, including its acquisition of Spaceflight Inc. in 2023. More Here

LAYOFFS & BANKRUPTCY

Pixar Animation Studios laid off around 14% of its workforce (approximately 175 employees) as it scales back development of original streaming series. This move comes as Disney CEO Bob Iger aims to cut spending on original streaming content and focus on profitability for Disney+. More Here

STARTUPS & PEOPLE

Oyo, the Indian budget hotel chain, has withdrawn its IPO application from SEBI for the second time, raising doubts about its readiness for public scrutiny. The SoftBank-backed startup is now attempting to raise funds at a valuation as low as $2-2.3 billion, a steep decline from its once $10 billion valuation peak. More Here

Garry Tan has revealed his ‘secret sauce’ for getting into Y Combinator:
Y Combinator looks for founders creating new markets with fringe but transformative technologies. They seek first-principles thinkers like Brian Armstrong who deeply understand the tech they're building. Impressive founders come with new discoveries from hands-on work with emerging technologies. YC's model inverts the typical VC approach of constantly saying "no" to taking meetings. More Here

Maëlle Gavet announced her departure as Techstars CEO at the end of the month due to health reasons, with co-founder David Cohen taking over as CEO. Gavet's tenure was marked by controversies over her leadership style, employee exodus, struggles to scale profitably, and frictions with corporate partners like JPMorgan Chase that led to program shutdowns. More Here

Linktree, the popular link-in-bio platform, announced surpassing 50 million users and launched the beta of its social commerce offering allowing creators to add storefronts and earn commissions. The company aims to facilitate over $6 billion in annual commerce through creator links, as it evolves from a link-sharing tool to a more versatile service with multiple revenue streams. More Here

LATEST IN EMERGING TECH

Truecaller, the caller ID service, will now allow customers to use its AI-powered Assistant to answer phone calls in their own synthetic voice through a partnership with Microsoft's Personal Voice technology. Users need to record a voice sample to create a digital version, which the Assistant can then use to greet and respond to callers. The personal voice feature aims to provide a more natural call-answering experience for Truecaller's paid users. More Here

OpenAI has signed a deal worth potentially over $250 million to gain access to content from various News Corp publications like The Wall Street Journal and MarketWatch. This move allows OpenAI to enhance its AI models, including ChatGPT, by training them on vast troves of data from the media giant's current and archived content. The agreement also ensures News Corp's content won't immediately appear on ChatGPT after publication, addressing concerns about timely access to news. More Here

Intercontinental Exchange Inc (ICE) will pay a $10 million penalty to settle charges related to a cyber intrusion incident. The SEC found that ICE's subsidiaries failed to immediately notify the agency about the incident as required. The SEC is pushing for more prompt disclosures of cybersecurity incidents to address growing risks of such attacks. More Here

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That’s It For Today! Will Meet You Tomorrow. Happy Thursday!☕

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