Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 130- May 18)

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. Dallas Venture Capital Joins $100M Series C Investment in Cloud Networking Pioneer Alkira

Alkira’s founders are in Dallas this week for the ONUG networking conference. Investors, including Dallas Venture Capital Founder Dayakar Puskoor, are bullish on the startup reinventing cloud networking and network infrastructure for the cloud era.

DVC joined investors Tiger Global Management, which led the round, NextEquity Partners, and Geodesic Capital alongside existing backers Sequoia Capital, Kleiner Perkins, and Koch Disruptive Technologies. The investment brings Alkira’s total raise to date to $176 million.

Founded in 2018 by brothers Amir and Atif Khan, Alkira’s on-demand network infrastructure as-a-service platform aims to help enterprises build a global virtualized network with simple tools. The company’s vision is “a network that can take you to and across clouds in minutes instead of months.”

According to Alkira CEO Amir Khan, the startup’s “talented team is the engine” behind its success. The team is currently in Dallas attending the Open Networking User Group Conference (ONUG) alongside several enterprise customers from across the country.

2. Regeneron Launches $500M Venture Capital Fund Skewed Toward Biotech

New York-based pharma Monday that it is launching a that will invest in promising biotechnology innovation amid a renewed wave of investment activity in the biotech market. $500 million venture capital fund

Regeneron Pharmaceuticals will serve as the exclusive limited partner to the VC fund-called Regeneron Ventures-and commit $100 million annually over the next five years, according to Monday’s announcement. While the fund has an investment mandate that includes healthcare broadly, it will lean towards biotechnology, devices, tools and enabling technologies.

Regeneron Ventures will be independently managed by former Regeneron executives Jay Markowitz and Michael Aberman, who will also direct the fund’s investment strategy. Before joining Regeneron Ventures, Aberman held CEO positions at XenImmune Therapeutics and Quentis Therapeutics. Prior to that, Aberman spent seven years at Regeneron, with his most recent position at the pharma being vice president of investor relations and strategy. Markowitz most recently served as senior partner at VC firm ARCH Venture Partners. He also worked at Regeneron from 2017 to 2020 as senior vice president.

Markowitz said that the fund will support “long-term” investments and will be “agnostic to therapeutic area, technology and stage of development.”

“Our goal is to cultivate an ecosystem where the next generation of biotech companies can thrive, drawing on the lessons learned and successes achieved at Regeneron and throughout our careers,” Aberman said in a statement. “Together, we will strive to identify and support groundbreaking advancements that push the boundaries of what’s possible in science and medicine.”

Coming off a in biopharma VC activity in 2023, there has been a recent in the investment space. In February 2024, ORI Capital announced its second fund had raised surge of activity , with the intention of investing in early stage biotechs that are working on unmet medical needs in cancer, metabolic disorders and neurodegenerative diseases, among other targets. Also, New York City-based Scion Life Sciences launched an $260 million fund that same month with the goal of forming companies that are developing curative treatments for life-threatening diseases. oversubscribed $310 million

3. Avenzo, BioAge-backer Sands Capital raises new $555M life sciences fund

Sands Capital has raised more than half a billion dollars for a new life science fund, readying a slew of new bets toward therapeutic, diagnostic and device companies.

The firm was mum on precise therapeutic modalities of interest, saying only that it will emphasize “private therapeutics” alongside other life science companies. So far this year, Sands has participated in at least two therapeutic rounds north of $50 million, including BioAge Labs’ $170 million series D announced in February. The biotech has successfully pivoted from being a broad longevity biotech to one focused on a mid-stage obesity candidate.

4. Good Company Launches $30 Million Fund to Drive Innovation in Mission-Driven Startups Addressing Global Challenges

Good Company specializes in pre-seed and seed investments in startups focused on energy, agritech, healthcare, education, and the circular economy. Since its inception in 2020, they have raised $50 million to spearhead mission-driven startups. Leveraging a unique investment model, the firm has an active portfolio of 13 startups, including being the first to invest in companies that have emerged as category-defining changemakers like , , , and .

5. Biotech funding optimism rises as 44% predict recovery in 2024

GlobalData’s recent survey The State of the Biopharmaceutical Industry 2024 revealed that 44% of healthcare industry professionals surveyed globally are optimistic or very optimistic on the recovery of biotech funding in the next 12 months. This optimism comes after the downturn in private biotech venture financing seen in 2022 and 2023. During 2023, funding decreased by 43.2% compared to 2022 and by 52.3% compared to 2021, attributed to macroeconomic pressures causing investors to be more cautious and prioritise existing portfolios.

Currently, 607 venture-backed companies headquartered in the US are affected by the downturn in biotech funding with over 1,500 drugs at stake (including pre-clinical). Of these 607 venture-backed companies, approximately a third have not raised any capital in the past three years.

According to GlobalData’s Pharma Intelligence Center Deals Database, venture financing for US-headquartered companies with innovator drugs peaked in 2021, by 104% to $20.7bn, which in turn saw many early-stage biotechs going public that year with inflated valuations. However, this led to overvalued biotechs that were unable to deliver milestone outcomes, causing a decline in investor confidence and selectivity in new investments. Furthermore, recent challenges such as high inflation, high-interest rates, and geopolitical instability have also prompted investors to become more selective.

Biotechs are turning to alternative sources of funding; in the same survey, 39% of all respondents identified enhanced industry partnerships as the most effective measure to mitigate a downturn in biotech funding. Respondents in the APAC region favoured government incentives or grants over private VC investors to tackle the funding downturn compared to those in North America and Europe. In the US, NIH grant funding to private companies reported a total deal value increase of 16.1% to $1.86bn from 2021 to 2022, according to GlobalData’s Pharma Intelligence Center Grants Database, highlighting its importance in mitigating the gap in investments received from venture capitals.

Despite the challenges within the private biotech funding landscape, venture capital funding has been crucial to sustaining biotech innovation. Following a decline from record highs in 2021, venture capital funding has remained relatively resilient throughout 2022. However, signs now seem to point towards a potential return to pre-pandemic levels. With access to alternative sources to secure capital including enhanced industry partnerships and government grants, along with a stabilising market and easing inflationary pressures, the outlook for future biotech investment appears promising.

6. Agora raises $34M Series B to keep building the Carta for real estate

Since he was very young, Bar Mor knew that he would inevitably do something with real estate. His family was involved in all types of real estate projects, from ground-up construction to managing residential, commercial and retail properties.

After leaving the army, he decided to combine his two passions: Mor noticed that many real estate investors do not have a dedicated system for keeping track of various back-office processes such as managing cash collected from rent, calculating and distributing proceeds to their LPs and many other administrative functions.

“We’ve seen companies struggling with managing all of these things using a lot of spreadsheets, emails and [other] disjointed systems that don’t interact with each other,” Mor said.

Mor said that when he was initially fundraising, he told investors he was building Carta for real estate. It’s easy to see the comparison: Carta manages cap tables for startups and VCs, along with other administrative functions. Since real estate investing is similarly data-intensive, investors need tools that automate manual work and calculate yields.

7. YC-backed Recall.ai gets $10M Series A to help companies use virtual meeting data

The startup has built infrastructure and a unified API that enables companies to access raw data from virtual meeting platforms like Google Meet, Microsoft Teams, Slack Huddles, Zoom and even platforms with no API. With the video and audio data, users can build AI-powered meeting bots or apps such as sales coaching, meeting notetaker or daily standup bots.

said the new capital will be used to grow its team and build integrations with more data sources. The two-year-old startup currently has nine staff and expects to grow its team to more than 16 by the end of this year, David Gu, co-founder and CEO, told TechCrunch.

The duo previously worked on a real-time transcription tool for video conferences and had experience building integrations with video conferencing platforms and the associated infrastructure.

8. PolyAI raises €46 million to further optmise its conversational AI for unbeatable customer service automation

The up round indicates VCs are sharing this enthusiastic vision. Vinod Khosla, the founder of Khosla Ventures, stated: “We are experiencing a Cambrian explosion in AI that will impact every industry. We bet early on PolyAI and the team as a category creator for AI-powered, voice-based customer support, and are thrilled to continue supporting them in making customer service the top brand experience for any company.”

When we founded PolyAI back in 2017, the technology PolyAI built was way ahead of the reality of the contact center. They were pushing boundaries with LLMs, achieving unprecedented conversational accuracy in customer service use cases, but most contact centers just weren’t quite ready to take the leap.

Today, PolyAI serves close to 100 enterprise customers, including FedEx, PG&E, Caesars, Marriott and Unicredit. The London-based startup is one of the very few companies that have delivered transformative outcomes in high call volume organizations. For instance, with one of their global clients, they deployed the world’s most multilingual enterprise voice assistant, supporting 12 languages and doing the work of 1,000+ full time employees.

Pavan Kapur, who partnered with PolyAI while Chief Commercial Officer at Caesars Entertainment, commented: “I was extremely impressed with PolyAI’s intuitive and natural conversational abilities and the impact it will have on customer experience. As a customer-obsessed leader, I am excited to see PolyAI continue to innovate for businesses and customers alike.”

PolyAI aims to be the voice that handles — and handles well — over half of all customer service calls in the next 5 years. Their platform combines the advantages of generative AI paired with a user experience that matches how enterprises actually build, deploy, and iterate in the voice channel.

9. Karlsruhe-based Codesphere raises €16.5 million to reduce infrastructure costs in DevOps

Codesphere , which enables developers to program and scale complex applications directly in the cloud, has secured €16.5 million in funding. Pan-European VC Creandum led the investment round with existing investors including LEA Partners, Begin Capital, 42CAP and 468 also participating.

Codesphere enables developers to program and scale complex applications directly in the cloud without the traditional challenges of DevOps and containerization. This leads to a significant reduction in infrastructure costs and makes the development process self-service.

“Our technology allows developers to focus 100% on feature creation, which not only increases efficiency but also saves significant labor costs,” said Elias Schneider, CEO of Codesphere.

Codesphere recently started offering its services “air-gapped” and “on-prem” for companies, which means companies can use their applications without an internet connection and have the option of hosting on their own servers, particularly important for critical infrastructure.

When VMware, one of the world’s largest cloud providers, changed its license model at the beginning of the year and significantly increased its prices, international companies turned their attention not to Silicon Valley but to Karlsruhe where Codesphere is based.

“Despite the current investment landscape, we use the new financing to expand and further develop our platform. Our goal with Codesphere is to play in the league of Microsoft, AWS and Google,” added Schneider.

10. French biotech HEPHAISTOS-Pharma gets €4.5 million to develop next-gen of immunostimulants against cancer

HEPHAISTOS-Pharma , a biotechnology company developing next generation immunotherapies against cancer targeting innate immunity to increase the cure rate of patients, has completed its €4.5 million seed round to finance industrialization and advance its lead candidate ONCO-Boost towards the clinic. Elaia leads a consortium previously initiated by xista science ventures, the Fondation Fournier-Majoie and Noshaq.

Florian DENIS, Investment Director at Elaia, stated: “Elaia is very proud to join and strengthen the syndication. HEPHAISTOS’ core technology based on immunostimulants has the potential to turn cold tumors into hot tumors in hard-to-treat cancers. Frédéric CAROFF and his team have generated impressive preclinical data that will be scaled up towards additional value-creating milestones.”

“ELAIA has a proven track record in supporting biotech companies through to the clinic and success, and we are delighted to have them on board,” said Frederic CAROFF, CEO and co-founder of HEPHAISTOS-Pharma. “With xista science ventures, Fondation Fournier-Majoie and Noshaq, our consortium of seed investors brings not only the necessary funds, but also complementary expertise and a network that will structure the company. They will play a crucial role in the success of HEPHAISTOS.”

This seed round will mainly finance the industrialization of drug production and regulatory toxicity studies to file for the CTA in Europe.

Orsay-based HEPHAISTOS already has a lot of preclinical data in many cancer indications, but they plan to generate new additional data in monotherapy against unmet medical needs and in combination with promising drugs from other pharmaceutical companies. Finally, it will also help to recruit new talents and complete the structuring of the board.

HEPHAISTOS’ innovative approach to innate modulation has received significant validation and support from prestigious programs, with a total of €5.8 million awarded to accelerate the development of ONCO-Boost for the treatment of hard-to-treat solid tumors, where there is a high unmet medical need, BPIFRANCE iNov national competition, EIC Accelerator European competition and RHU clinical grant from France 2030, that will include a clinical phase 1/2 in collaboration with prestigious clinical centers.

Originally published at https://www.linkedin.com.