Venture capitalists may be predicting trouble ahead for the private markets—but Cathie Wood has always danced to the beat of her own drum.
The chief executive of ARK Invest, the asset manager known for its bold—and risky—bets on tech and innovation, said yesterday afternoon that ARK is planning to launch a fund that will invest across both public and private markets. Right now, ARK’s funds invest solely in public equities.
“We’re going to start a crossover fund,” Wood said in an on-stage interview at the UP.Summit, a mobility conference taking place in Bentonville, Ark. This week. Wood declined to speak further about the fund because of Securities and Exchange Commission regulation, but an SEC filing from earlier this year reveals it will be a closed-end fund that will invest in public equities, early to late-stage startups, and venture capital funds, among other investments.
While ARK may be known for its ETFs, whose performance soared to remarkable heights during the pandemic, Wood isn’t new to the world of private investing. She is personally a limited partner in UP.Partners, a $230 million early-stage venture capital fund focused on mobility, whose partners are co-hosting the Summit in Bentonville.
But while it may not be an entirely new rodeo for Wood, it’s still a rather challenging time to debut a crossover fund. Hedge funds like D1 Capital Partners or Tiger Global that straddle both public and private investments have reported billions in losses this year as public tech stocks plunge, and Wood’s publicly traded funds have tumbled, with its flagship ARK Innovation ETF trading more than 50% lower than it was in January.
With the path to an IPO largely closed for the moment, and some of the industry’s tech darlings starting to cut their valuations, asset managers like Fidelity are proactively trimming the value of their own positions and players like T. Rowe Price are rolling back their pace of deals. Some growth equity investors are turning focus to earlier-stage investments or companies most poised for profitability.
Wood made her name taking early—and sizable—bets on Tesla and, more recently, cryptocurrencies like Bitcoin. She likens ARK’s approach to the public markets to venture investing: “We are the closest thing you’ll find to venture capital funds in the public equity markets,” she says. But she’s also critical of how VCs are moving their money in the space. Wood mentioned that, at a former UP.Summit in 2018, venture capitalists repeatedly got up on stage complaining of high costs and said “oh, we would never invest in this.”
“There is a lot of capital moving into the asset-light part of the business,” Wood says, but she says that funds are still avoiding investments in companies that are spending a lot on the hardware or underlying technology. “We think that will change,” she says.
And she knows just the fund manager with the guts to do it.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: [email protected]
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Jackson Fordyce curated the deals section of today’s newsletter.
VENTURE DEALS
- Multiverse, a London-based career apprenticeship platform, raised $220 million in Series D funding. StepStone Group, Lightspeed Venture Partners, and General Catalyst co-led the round and were joined by investors including Founders Circle Capital, Audacious Ventures, BOND, D1 Capital Partners, GV, and Index Ventures.
- CareBridge, a Nashville-based health care company for patients receiving home and community-based services, raised $140 million in funding led by Oak HC/FT.
- Vanta, a San Francisco-based compliance and software automation security company, raised $110 million in Series B funding. Craft Ventures led the round and was joined by investors including Sequoia and YC.
- Codat, a London-based software startup connecting small businesses with financial institutions, raised $100 million in funding. JPMorgan Chase’s growth-equity arm led the round and was joined by investors including Canapi Ventures, and Shopify,Index Ventures, and PayPal Ventures.
- Ever/Body, a New York-based cosmetic dermatology and med spa company, raised $55.5 million in Series C funding. Addition led the round and was joined by investors including Tiger Global, ACME Capital, Declaration Partners, Fifth Wall Ventures, and Imaginary Ventures.
- HYCU, a Boston-based cloud data protection company, raised $53 million in Series B funding. Acrew Capital led the round and was joined by investors including Bain Capital Ventures, Atlassian Ventures, and Cisco Investments.
- Anagenex, a Boston-based machine learning-enabled, small molecule, drug discovery company, raised $30 million in Series A funding. Catalio Capital Management led the round and was joined by investors including Lux Capital, Khosla Ventures, Obvious Ventures, Airstreet Capital, and Menlo Ventures.
- CreativeX, a New York-based data platform for brands, raised $25 million in funding. Guggenheim Investments on behalf of certain clients, Beringea, the Brandtech group, and Conviction invested in the round.
- Entropy, a Brooklyn, New York-based crypto custody platform, raised $25 million in seed funding. A16z led the round and was joined by investors including Dragonfly Capital, Ethereal Ventures, Variant, Coinbase Ventures, Robot Ventures, Inflection, the Komerabi Fund, and other angels.
- Skolem Technologies, a New York-based asset management and execution services provider, raised $20 million in Series A funding. Galaxy Digital led the round and was joined by investors including Point72 Ventures, Jump Crypto, Fenwick and West, Morpheus Ventures, and Dragonfly Capital.
- Continual, a San Francisco-based operational A.I. Platform for data stacks, raised $14.5 million in Series A funding. Innovation Endeavors led the round and was joined by investors including Amplify Partners, Illuminate Ventures, Inspired Capital, Data Community Fund, Activation, New Normal, GTMfund, Dremio founder Tomer Shiran, and dbt Labs founder Tristan Handy.
- Teleo, a Palo Alto-based construction robotics company, raised $12 million in Series A funding. UP.Partners led the round and was joined by investors including F-Prime Capital, K9 Ventures, Trucks Venture Capital, and other angels.
- Valkyrie Investments, a Nashville-based investment manager focused on digital assets, raised $11.15 million in funding. BNY Mellon, Wedbush Financial Services, Clearsky, Zilliqa Capital, C-Squared Ventures, Belvedere Strategic Capital, and SenaHill Partners invested in the round.
- Securesave, a Seattle-based emergency savings fintech platform, raised $11 million in funding. Truist Ventures led the round and was joined by investors including Stearns Financial Services and FTX.
- Decimal, an Indianapolis-based accounting automation platform, raised $9.22 million in seed funding. Arthur Ventures led the round and was joined by Service Providers Capital and other angels.
- Shoreline, a Stavanger, Norway-based workflow automation and asset simulation SaaS company for the wind industry, raised $7.5 million in funding. Ecosystem Integrity Fund, Blue Bear Capital, Ferd Capital, Alliance Venture, and Investinor invested in the round.
- Extracker, a San Francisco-based change order communication platform for the construction industry, raised $7 million in Series A funding. Cloud Apps Capital Partners led the round and was joined by investors including Building Ventures and Jackson Square Ventures.
- Overalls, a New York-based insurance-based benefits company, raised $4.6 million in funding. RPM Ventures led the round and was joined by investors including Frontier Ventures, former NFL player Jerod Mayo, and others.
- Five to Nine, a Chicago-based employee initiative software management platform, raised $4.25 million in seed funding. Black Ops Ventures led the round and was joined by investors including Slack Fund and Cleveland Avenue.
- Curio, a Santa Monica, Calif.-based NFT analysis, raised $3.7 million in a seed funding round. 776 led the round and was joined by investors including Gary Vee, Cozomo de Medici, Polygon CEO JD Kanani, OpenSea CEO Devin Finzer, OrangeDAO, Coinbase Ventures, and other angels.
- De Oro Devices, a San Luis Obispo, Calif.-based medtech startup specializing in Parkinson’s and other mobility disorders, raised $2.8 million in seed funding. True Wealth Ventures led the round and was joined by investors including AARP, StartUp Health, Capital Factory, Wai Mohala Ventures, Kachuwa Impact Fund, Barton Investments, HealthTech Capital, Wealthing VC Club, Rockies VC, and Mentors Fund.
PRIVATE EQUITY
- Citizens Financial Group, acquired DH Capital, a New York-based private investment banking firm. Financial terms were not disclosed.
- Mercer Global Advisors, backed by Oak Hill Capital and Genstar Capital, acquired Berkson Asset Management, a Woodland Hills, Calif.-based tax and accounting firm. Financial terms were not disclosed.
OTHER
- Descartes Systems Group acquired XPS Technologies, a Cottonwood Heights, Utah-based ecommerce multi-carrier parcel shipping solutions provider, for $65 million.
- Achieve Partners acquired a majority stake in Boclips, a Boston-based educational video platform for student learning. Financial terms were not disclosed.
- Desert Peak Minerals and Falcon Minerals have merged creating Sitio Royalties, a Denver-based oil & gas, mineral, and royalty interests company. Financial terms were not disclosed.
- DotCom Therapy acquired Wolf+Friends, a New York-based community for parents and families raising children with special needs. Financial terms were not disclosed.
- WorkGenius acquired JBC, a New York-based staffing company, financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Biospring Partners, a New York-based growth equity firm, raised $245 million for a fund focused on tech companies in the life sciences sector.
PEOPLE
- CapitalG, the San Francisco-based growth fund of Google parent company Alphabet, hired Melissa Sobel as communications partner and Stanley Onyimba as vice president of growth. Formerly, Sobel led a VC-focused communications consultancy and Onyimba was with Google Search.
