Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 119- February 10)

Welcome to Startup Monday, my weekly newsletter that recaps the week in the global startup ecosystem. To have this newsletter emailed to you, you can sign up here.

Top startup news to follow this week:

1. Industry Veterans Launch $310M VC Fund for Biotech Startups

Led by three biotech veterans, New York City-based venture capital firm Scion Life Sciences launched on Wednesday with an oversubscribed $310 million fund to form companies working on potentially transformational and curative therapies.

According to the announcement, the firm’s mission is to create and build companies developing innovative treatments that could “cure or transform the clinical management” of life-threatening diseases. Scion Life Sciences, an affiliate of Petrichor, intends to “support its most promising portfolio companies through to maturity as late- or commercial-stage biopharmaceutical enterprises.”

The firm will make small investments-as low as “a few thousand dollars” for early-stage efforts-but can also provide $60 million or more in funding throughout the life of its portfolio companies, supporting them from pre-seed through to a public offering.

Scion is helmed by three industry veterans: Samuel Hall, who was previously a partner at Apple Tree Partners, where he contributed to several biotechs, including Stoke Therapeutics, Marengo Therapeutics and the Novartis-bought Chinook Therapeutics.

Aaron Kantoff is also managing partner at Scion. Previously, he was a venture partner at Medicxi and before that he served as co-founder and board member of Rayzebio, which in December 2023 was acquired by Bristol Myers Squibb for $3.6 billion.

Joining Hall and Kantoff is Tadd Wessel, a managing partner at private healthcare investment firm Petrichor. Wessel was previously a partner at OrbiMed Advisors and was vice president of Fortress Investment Group.

The trio’s depth of experience is contained in the three pillars of its asset selection strategy, which they contend is designed to minimize risk while maximizing the chances of producing transformational medicines.

First, Scion will focus on mature modalities and technologies that area likely to yield drugs “today or in the near term.” Second, the firm will invest its resources in therapeutic areas and disease targets with well-understood underlying mechanisms, allowing for effective interventions. Finally, Scion says it will be pragmatic by choosing to focus on conditions that can be addressed by independent biotech companies.

So far, Scion has established four companies. The firm said that details will be “disclosed subsequently” as the entities mature.

Scion has also formed an in-house team of scientific, medical and technology experts to guide the founding and building of its portfolio companies, while also providing internal R&D capabilities. The team will help the venture firm ensure that it will only support programs with “exceptional potential” to mature into full-scale companies.

“We build companies with the primary objective of creating important new medicines, not exits,” Kantoff said in a statement, adding that Scion’s approach is designed to “yield real medicines that change the lives of patients and caregivers.”

2. 5 US venture capital firms invested over US$3 billion in mainland AI, semiconductors

A US congressional panel monitoring China has concluded that five American venture capital firms invested a combined US$3 billion or more in the mainland’s artificial intelligence and semiconductor industries, and used its findings to call for more restrictions on the US financial industry’s ties to the country.

The five were GGV Capital, GSR Ventures, Qualcomm Ventures, Sequoia Capital and Walden International, according to a report released by the US House Select Committee on the Chinese Communist Party on Thursday after a seven-month investigation.

Together the companies have invested more than US$1.9 billion in Chinese AI companies, which includes over US$1 billion in ByteDance, TikTok ‘s parent company, according to the investigation led by Wisconsin Republican Mike Gallagher, the panel’s chairman, and its ranking member, Illinois Democrat Raja Krishnamoorthi.

In addition, more than US$1 billion has flowed to more than 150 semiconductor companies in China, including over US$50 million to Semiconductor Manufacturing International Corporation, the report stated.

SMIC is the mainland’s largest semiconductor foundry company and since 2020 has been on the US government’s Entity List, which bars it from buying tools from US suppliers without a special licence.

“Decades of investment — including funding, knowledge transfer and other intangible benefits — from US VCs have helped build and strengthen the PRC’s priority sectors,” the lawmakers wrote in the report. “This bell cannot be unrung.”

“Simply put, robust PRC-outbound investment restrictions in key strategic sectors are a national security and human rights imperative.”

Other Chinese tech companies identified by the report, on the US government blacklist and in receipt of investment from the five US VC firms included AI developers Megvii and SenseTime, which are alleged to be involved in surveillance of Uygurs, an ethnic minority group in China’s Xinjiang Uygur autonomous region.

3.Thea Energy raises $20M Series A for pixel-inspired fusion power plants

To build a fusion power plant, engineers are forced to make some difficult choices. Do they go with the simpler design and then, while in operation, force the plasma to behave so it doesn’t snuff itself out? Or do they opt for a complex design that’s challenging to build but leads to happier plasma?

Or what if there was a way to do both?

Thea Energy is hoping that “both” is the right answer. The startup is betting that software can supplant manufacturing precision in its quest to deliver reliable, inexpensive fusion power. It has recently raised a $20 million Series A, TechCrunch has exclusively learned. Prelude Ventures led the round with participation from 11.2 Capital, Anglo American, Hitachi Ventures, Lowercarbon Capital, Mercator Partners, Orion Industrial Ventures and Starlight Ventures.

There are two main approaches to fusion power: inertial confinement and magnetic confinement. The former made headlines at the end of 2022 for proving that net-positive fusion power isn’t just science fiction by using massive lasers to vaporize a fusion fuel pellet.

Many startups, though, are using some variation of the latter. In magnetic confinement, burning plasma is contained by powerful magnetic fields produced by high-temperature superconductors. Those fields wrangle the plasma into one of several shapes: In tokamaks, the doughnut-shaped designs that many large reactor projects use, those magnets have to be built with incredible precision to be able to contain plasma and keep it at the right temperature.

4. Functional beverage startup Odyssey grabs $6M to accelerate energy drink growth

Odyssey, a mushroom-based functional energy beverage maker, raised another $6 million in an equity investment to give it $14 million in total funding since launching its first drink two years ago.

Odyssey’s products tap into the health benefits of Lion’s Mane and Cordyceps mushrooms to produce a drink that combines an energy boost with 2,750 milligrams of the mushrooms to provide cognitive clarity and focus.

Lion’s Mane, in particular, was shown to positively impact cognitive function and mood in young adults, according to a 2023 National Institutes of Health pilot study.

Scott Frohman, founder and CEO of Fort Lauderdale, Florida-based Odyssey, first learned about the benefits of certain mushrooms from a friend making a mushroom powder to mix in drinks.

“I started adding it to my coffee, and I realized that everything was more clear,” he told TechCrunch. “The best part was when I got to work, I realized that I didn’t need that second cup of coffee. On top of that, I just felt I was just more present and was able to jump to my work.”

5.UK-based Lilli secures over €9.5 million to help people to live safely and independently in their homes for longer

Lilli, a UK-based SaaS company using a proactive lifestyle monitoring technology to revolutionise care, today announces that it has raised over €9.5 million in Series A financing led by West Hill Capital, a 37% increase from its initial target.

Lilli is pioneering the shift from a reactive to a proactive care model. Through smart, non-intrusive technology and proprietary AI and machine learning (LLM), Lilli observes patterns and trends among users to equip care workers with clear and accurate insights into wellbeing and what is happening in the home. This supports accurate decision-making and means behavioural changes can be easily identified before conditions become acute, improving health outcomes and reducing hospital visits.

The technology is already helping to alleviate the resource and financial pressures in the broader health and social care system in the UK. Evidence from councils including Nottingham and Reading shows that organisations using Lilli can expect to save up to £9 for every £1 spent, generate thousands of additional carer hours and see hospital discharge rates sped up by up to 16 days. In the longer term, independent economic analysis predicts that, by 2035, it could deliver benefits that are the equivalent of employing an additional 10,000 full-time carers in the UK.

This new financing will allow Lilli’s strategy to rapidly power its scale-up across the public and private health and care sectors, where demand for Lilli’s technology continues to grow. With multiple contracts reaching nearly GBP 1m revenue secured in Q4 2023 alone, significant further momentum is anticipated in the UK and internationally.

The funds will also enable the company to explore deeper avenues into AI insights and reporting and support Lilli in launching a friends and family version of the app. This app will provide next of kin or informal carers with real-time information and reassurance about their loved one’s wellbeing — for instance, if they are eating regularly, keeping their home warm and bathing.

6. Endpoint security startup NinjaOne lands $231.5M at $1.9B valuation

Just two years ago, VC funding to cybersecurity startups was on fire. Indeed, $23 billion flooded the sector, per Crunchbase. But in 2023, cybersecurity upstarts only saw a third of that — the result of the exceptional surge in 2021, bloated valuations and investors wary of market instability.

But there are always some winners during down times.

Yesterday, NinjaOne, an IT platform for endpoint management, security and visibility, announced that it raised $231.5 million in a Series C funding round led by Iconiq Growth.

The mammoth round, which was joined by Frank Slootman, the chairman and CEO of Snowflake, and Amit Agarwal, the president of Datadog, values NinjaOne at $1.9 billion, according to co-founder and CEO Sal Sferlazza.

Sferlazza says that NinjaOne wasn’t looking to fundraise, but received inbound interest from “numerous” potential investors — including Iconiq, apparently.

“Iconiq has a strong history of helping top companies like Snowflake, Datadog and CrowdStrike reach their potential,” Sferlazza told TechCrunch in an email interview. “We believed an investment from Iconiq would help ensure that NinjaOne is well-positioned for long-term success. We remain focused on scaling our business and team to continue to improve our product offerings and to support our growth globally as our customer base and product offerings mature.”

Sferlazza and NinjaOne’s president and CFO, Chris Matarese, launched Austin, Texas-based NinjaOne in 2014. Sferlazza says that he was closely involved with early development efforts, working with NinjaOne’s founding team to build endpoint management, patching and support tools.

“We recognized a massive need to help organizations manage their endpoints — a need that only grew with the pandemic wave of remote and hybrid work,” he said. “Endpoints pose a significant risk and opportunity in the post-pandemic era, and — amid the unprecedented rise of generative AI — NinjaOne is focused on automating and simplifying IT operations for our customers.”

NinjaOne’s tools, which are designed to integrate with existing IT and security platforms, run the gamut from remote device monitoring and data backup to software deployment, alerting, scripting and app automation. The company claims to be managing over seven million endpoints currently for more than 17,000 customers, including Hello Fresh, Nissan, Nvidia, Pabst Brewing Company, the State of California and the University of Oxford.

“When we founded NinjaOne, we set out to develop a wide range of products that prioritize customer success,” Sferlazza said. “That remains our number one priority today, and this focus has enabled us to grow a strong business.”

Today, NinjaOne’s war chest stands at $282.7 million as its revenue grows 70% year-over-year.

Sferlazza says that the proceeds from the latest funding round will be put toward expanding NinjaOne’s ~1,000-person team and investing in automating “the hardest parts” of IT. “S]treamlining endpoint management, bolstering security and fast-tracking new technology deployment … has allowed us to provide unparalleled customer success,” he continued.

7. Stockholm-based Xensam raises €37 million to fuel the next generation of AI-powered Software Asset Management

Xensam, a leading technology provider of AI-powered Software Assessment Management, announced that it has raised €37 million in growth funding from Expedition Growth Capital. The previously bootstrapped company will use the funding to invest in AI product development and expand operations in the US and Europe.

As the SaaS market continues to grow considerably, the number of software tools used by organisations and businesses of all sizes has exploded. Software asset management (SAM) tools have surged in popularity to help businesses manage applications, track usage, identify overspending and maintain compliance.

Founded in Stockholm in 2016 by brothers Oskar Fösker, CEO, and Gustav Fösker, CTO, Xensam’s vision is to simplify and automate SAM, with proprietary AI. Its intuitive platform allows IT executives and other stakeholders to understand precisely how users interact with applications across the entire digital infrastructure, delivering significant cost and efficiency savings.

Oskar Fösker, co-founder and CEO of Xensam, said: “We founded Xensam to provide an intuitive platform for software asset management and resource optimisation by leveraging AI and automation. Since then, we have grown over 126% year-on-year and demonstrated how innovative, scalable and user-centric technology can deliver exceptional value to customers. We’re thrilled to partner with Expedition Growth Capital to help fuel the next phase of our expansion.”

Xensam’s platform with its perpetual agent can identify hundreds of thousands of applications, whether they are SaaS or on-premise, to provide a comprehensive organisational overview across hybrid environments. The insights generated are easy to understand and don’t require any technical expertise or manual configuration. Furthermore, the platform can integrate with any software, allowing additional data to be collected to provide a single source of truth. The platform’s Security Centre provides an overview of potential compliance issues and security vulnerabilities, including pirated software detection and missing anti-virus tools, which helps reduce the risk of security breaches.

Gustav Fösker, co-founder and CTO of Xensam, commented: “By pioneering AI from the start, we’ve transformed SAM for hundreds of companies, making it user-friendly and removing manual work. With the new funding, we can continue to innovate the platform with more advanced features, including a ChatGPT-inspired chatbot that will enhance its accessibility and user experience.”

8. 2C Ventures launches €50 million fund to propel early-stage cleantech innovation in the New Nordics

Tallinn-based 2C Ventures has launched a €50 million fund to support early-stage cleantech companies in Estonia and the New Nordics, focusing on areas like renewable energy and waste reduction. The fund, with SmartCap as its anchor investor and additional support from Estonian entrepreneurs, aims to address climate change and make a climate-neutral economy a competitive advantage for Estonia. They plan to invest in research-intensive startups, providing initial funding ranging from €250,000 to €1 million per company. The fund’s strategy includes substantial follow-on investments in later rounds to accelerate the development of cleantech solutions in the Baltic and Nordic regions.

2C Ventures is a cleantech venture capital firm with a core commitment to advancing positive change through innovative solutions. The company’s mission revolves around identifying and supporting groundbreaking technologies in clean energy, sustainability, and environmental initiatives. With a focus on sustainable progress, 2C Ventures collaborates with entrepreneurs, startups, and research pioneers working towards a more environmentally conscious future. The firm emphasizes the transformative potential of disruptive ideas, aiming to contribute to a greener and more sustainable world. In the broader context, 2C Ventures is part of the ongoing global effort to address environmental challenges and foster innovation in the cleantech sector.

The newly created fund will invest in cleantech start-ups in the Baltic and Nordic countries, but the initial focus is on helping Estonian companies. The fund will support start-ups developing new technologies in renewable energy, waste reduction, water management, circular economy, and other clean technologies. Initial investment per company will range from EUR 250 thousand to EUR 1 million, depending on the development stage of the company, and the fund will have substantial follow-on capability in later investment rounds.

9. Stockholm-based Myrspoven lands €5.4 million to make real estate cope with its carbon emissions goals

Myrspoven, a leading AI software company operating within building optimization, announced the successful completion of a €5.4 million equity funding round. The investment was led by 4impact capital, Vantaa Energy, and existing investor AMAVI Capital. As of today the Swedish company is running +3,500,000 square meters across 8 countries and saves on average 20% of a building’s energy

“We are eager to welcome 4impact capital and Vantaa Energy as new partners in this exciting phase of growth for Myrspoven,” said Anders Kallebo, co-founder and CEO. “This funding will be instrumental in advancing our mission to contribute to the real estate industry’s reduction of carbon emissions by 1% and ensuring that we continue to deliver exceptional services to our valued customers.”

Founded in 2017, this capital infusion strategically propels Myrspoven to expand its solutions across Europe and beyond, in line with their channel partner strategy. The company’s dedication to sustainability and transforming buildings into dynamic players in the modern energy system aligns perfectly with the vision of the investors, fostering a partnership aimed at driving innovation and creating lasting value in real estate. With a track record of delivering energy and cost savings, an impressive tech stack, and a future-proof platform, Myrspoven has gained investor confidence for its potential to lead and disrupt the real estate sector.

Ali Najafbagy, General Partner and co-founder at 4impact capital, said: “Myrspoven is the leader in its field of carbon emission reduction through a digital only solution. We are thrilled to team up and accelerate the positive change internationally.”

10. Pre-seed investor Wonder Ventures secures $102M, including new later-stage fund

New technologies keep innovation going — however, when it comes to venture capital support for some of these earliest ideas, someone always has to be first. Dustin Rosen, managing partner at Wonder Ventures, is happy to be that “someone.”

A fixture in the pre-seed investment scene in Los Angeles and Southern California for a decade, Wonder Ventures has backed nearly all of Los Angeles’ unicorns, including Honey and Whatnot. Other notable investments include Clutter, Modern Animal and Tala.

“I looked around LA in 2013 and saw that there was this amazing community,” Rosen told TechCrunch. “It was really becoming a tech player in its own right, but lacked the early capital to help support those companies. Companies would get to a Series A level and go up to the Bay Area to raise from the big brand name funds, but that first million dollars was still — and I’d argue even today in 2024 — too hard to come by, and that’s where Wonder Ventures came from.”

Rosen has since added Valentina Rodriguez and Taylor Bolhack to the firm, which now has some new capital to deploy, securing $102 million in commitments across two funds: a $57 million Fund 4 for pre-seed, and a $45 million later-stage opportunity fund.

Rosen hasn’t made an investment from Fund 4 yet, however, he did make one investment from the opportunity fund into the Series A of property tax savings company Ownwell. The firm will write checks between $1 million and $1.5 million, Rosen said.

Over 60 limited partners support Wonder Ventures, including early employees and executives from such companies as Snap, Honey and ZipRecruiter, and come from those same LA and SoCal communities, Rosen said.

Wonder Ventures is the latest to inject additional capital at the pre-seed stage, an area where Rosen and other investors continue to be bullish. A few months ago, we saw more than half a dozen VC firms announce new funds — and more since then.

“Being a founder, I wanted to build this firm to think about what would an early founder truly want from the VC experience versus big funds,” Rosen said. “This is when founders need the most hands-on experience, helping them get from zero to one. From an investment side, we love being the first investor in the companies. We want to be the check that puts you in business, and no traction is not a problem.”