Author: yasmeeta

Cendana and Kline Hill just got $105M to buy stakes in seed VC funds from selling LPs.

In the dynamic world of venture capital (VC), the hunt for liquidity is intensifying, creating a ripple effect in the secondary market. Despite the soaring valuations of startups and VC funds, the lack of initial public offerings (IPOs) has hampered cash flow for investors. This challenge has catalyzed a surge in secondary sales, where cash-hungry venture capitalists are seeking to offload their illiquid positions to eager secondary buyers.

A recent survey among investors pinpointed the primary challenge facing venture capital today: the scarcity of liquidity. Investments in startups or VC funds, despite their appreciating values, are failing to translate into tangible cash returns due to the absence of IPOs. Private investments, unlike their public market counterparts, lack the flexibility of readily trading shares. The process of selling shares in private companies, particularly startups, necessitates authorization from the companies themselves and approval from secondary buyers.

In response to this liquidity crunch, venture investors, whether individual VCs or their limited partners, are increasingly exploring avenues to divest their illiquid positions. Enter the secondary market, where a unique opportunity has emerged amidst the fallout of overvalued early-stage startups from the fundraising frenzy of yesteryears. This scenario has paved the way for astute investors to acquire stakes in seed-stage VC funds and startups at relatively discounted rates.

Today marks a significant development in the realm of venture capital as Cendana Capital, alongside partner Kline Hill Partners, unveils the $105 million Kline Hill Cendana Partners fund. Initially targeting a raise of $75 million, the fund’s oversubscription underscores the palpable interest among investors in seizing opportunities within the secondary market.

Michael Kim, founder and managing director of Cendana Capital, underscores the rationale behind this strategic move, citing the burgeoning demand from portfolio funds eager to offload their commitments. Recognizing the expertise required to navigate the intricacies of secondary investments, Kim forged a strategic alliance with Kline Hill, pooling resources to capitalize on the buyer’s market.

What sets Kline Hill/Cendana’s investment vehicle apart is its focus on acquiring secondary interests in seed-stage firms and individual companies from seed funds. Unlike traditional secondary players, which predominantly target larger opportunities, this partnership is uniquely positioned to tap into the untapped potential of the seed-stage ecosystem.

Central to the success of this joint venture is the symbiotic relationship between Cendana Capital and its portfolio funds. Leveraging its extensive network, Cendana identifies and vets potential secondary deals, subsequently passing them on to Kline Hill for valuation, underwriting, and negotiation.

Chris Bull, a managing director at Kline Hill, emphasizes the symbiotic nature of the partnership, highlighting the value of Cendana’s insights in streamlining the investment process. This collaborative approach not only enhances deal flow but also facilitates smoother transactions, bridging the gap between opportunity and execution.

With a firm commitment to deploying the entire $105 million fund by the end of 2024, Kline Hill/Cendana is poised to capitalize on the burgeoning demand for secondary venture stakes. The success of this venture is poised to set the stage for future collaborations, with discussions already underway for a successor fund in the coming year.

The venture capital landscape is witnessing a paradigm shift, with traditional secondary investors ramping up their allocations to VC-focused funds. Notable players such as Lexington Partners and Blackstone have recently raised record-breaking secondary funds, signaling a growing appetite for venture assets.

While billion-dollar funds traditionally focus on larger, multi-stage firms, Kline Hill/Cendana’s emphasis on the seed stage represents a novel approach to secondary investing. As VC-backed companies prolong their stay in the private domain, the demand for liquidity is expected to soar, creating a fertile ground for innovative investment strategies.

As the venture capital landscape continues to evolve, the secondary market emerges as a beacon of opportunity for savvy investors. With Kline Hill Cendana Partners Fund at the forefront of this paradigm shift, the stage is set for a new era of liquidity-driven growth in the venture capital ecosystem.

Noname Security, a burgeoning API startup, edges closer to a $500 million acquisition agreement with Akamai.

In the fast-paced realm of cybersecurity, startups often rise with promising technologies, seeking both to safeguard digital assets and to secure their own futures through strategic partnerships or acquisitions. Noname Security, a burgeoning player in the field, finds itself at the center of attention as it engages in advanced negotiations with industry giant Akamai Technologies. Sources close to the deal suggest a potential acquisition worth a staggering $500 million, underscoring the growing significance of API protection in an increasingly interconnected digital landscape.

The Rise of Noname Security: A Brief Overview

Established in 2020 by co-founders Oz Golan and Shay Levi, Noname Security quickly garnered attention for its innovative approach to API security. Headquartered in Palo Alto with deep-rooted connections in Israel, the startup swiftly attracted substantial investment, raising a total of $220 million from prominent venture capital firms. Riding the wave of success, Noname achieved a commendable valuation of $1 billion in December 2021 following a successful Series C funding round led by Georgian and Lightspeed.

Investors Amount Raised (USD)
Insight Partners $XX million
ForgePoint $XX million
Cyberstarts $XX million
Next47 $XX million
The Syndicate Group $XX million

Navigating Market Dynamics: Valuation Realities

Despite its meteoric rise, Noname Security now faces the stark realities of market valuation. The proposed acquisition price of $500 million represents a notable discount from its previous valuation. However, early-stage investors stand to realize significant returns, while later-stage backers anticipate a full recovery of their capital investment. This shift in valuation dynamics mirrors broader trends in the tech industry, where lofty valuations are reassessed against market conditions and investor sentiment.

Key Highlights of the Negotiation Process:

  • Potential acquisition price set at half of Noname’s last private valuation.
  • Early-stage investors poised for substantial returns.
  • Later-stage investors anticipate full capital recovery.
  • Company valued at approximately 15 times annual recurring revenue.
  • Expected transition of Noname’s 200 employees to Akamai post-acquisition.

Industry Speculation and Market Dynamics

Rumors surrounding Noname’s potential acquisition surfaced earlier this year, coinciding with reports of the company’s efforts to secure additional financing at a reduced valuation. Israeli news outlets further fueled speculation by hinting at negotiations with multiple suitors, including Akamai. Against the backdrop of a fluctuating tech landscape and the prospect of rising interest rates, many VC-backed firms find themselves at a crossroads, balancing the pursuit of strategic partnerships with the imperative of securing additional funding.

Implications for the Venture Capital Landscape

The evolving narrative surrounding Noname Security reflects broader trends within the venture capital ecosystem. As the IPO market remains relatively subdued, many late-stage investors seek liquidity through strategic acquisitions or secondary offerings. This trend, often termed a “dual-track process,” underscores the delicate balance between long-term growth aspirations and short-term financial realities. With market volatility shaping investor sentiment, the prospect of bargain hunting in the M&A arena looms large for industry participants.

In conclusion, Noname Security’s journey from startup inception to advanced acquisition talks with Akamai Technologies encapsulates the dynamism and complexity of the cybersecurity landscape. As industry players navigate shifting market dynamics and valuation pressures, the outcome of these negotiations will reverberate across the tech ecosystem, shaping future investment strategies and market perceptions.

Team management application Homebase secures $60 million in Series D funding to empower SMBs with ‘superpowers’

In a significant boost to its mission of providing cutting-edge human resources technology to small and midsized businesses (SMBs), Homebase has successfully closed on $60 million in Series D financing. This latest round of funding was led by L Catterton Growth, the technology venture arm of one of the leading private equity firms, with participation from Emerson Collective and several returning investors including Notable Capital, Bain Capital Ventures, Khosla Ventures, Cowboy Ventures, and PLUS Capital.

Unlike many tech companies that design HR technology primarily for desk-based professionals, Homebase aims its sights on the two-thirds of the American SMB workforce engaged in hourly jobs that necessitate on-site presence. With this funding, Homebase plans to expand its offerings and reinforce its position in the market.

Key Features and Achievements of Homebase:

  • Customer Base: Over 100,000 small businesses covering more than 2 million employees.
  • Comprehensive Services: Includes payroll, shift scheduling, timesheets, hiring and onboarding, communication, and HR compliance.
  • Funding Milestones: A total of $169 million in venture-backed capital, with the recent Series D funding marking a significant phase of growth.

What Sets Homebase Apart:

Feature Description
Payroll Management Automated enhancements for streamlined operations.
Shift Scheduling Easy-to-use tools for managing on-site hourly workers.
Hiring and Onboarding Simplified process for recruiting and integrating new hires.
HR Compliance Ensures businesses stay up-to-date with labor laws.
AI-Enhanced Features Leveraging AI for better efficiency and worker satisfaction.

John Waldmann, Homebase’s founder and CEO, emphasizes the unique challenges and needs of hourly workers, stating, “Hourly workers have a lot of the same desires for flexibility and certainty, but it shows up in entirely different ways, and that’s been our core mission.” This sentiment is echoed by Jeff Richards, an investor and managing partner at Notable Capital, who highlights the underserved nature of SMB technology for hourly workers and the transformative potential of AI in empowering small businesses.

Despite the competitive landscape with other players like Workstream, Salt Labs, and Clair focusing on hourly workforce solutions, Homebase’s growth trajectory is noteworthy. Jeff Richards points out the significance of Homebase’s achievements, with over 2% of the workforce utilizing their platform, showcasing its potential impact on the technology and economic landscape.

As Homebase moves forward, the company has also announced strategic appointments, including Philip Moon as its new CFO, bringing in experience from notable companies such as Square and Grove Collaborative. Co-founder and COO Rushi Patel has taken on the additional role of chief revenue officer, signaling Homebase’s commitment to growth and innovation.

With this new funding, Homebase aims not only to enhance its product offerings but also to fulfill its mission of making work more human and empowering small businesses to provide better jobs, thus contributing to the health of communities. “We are using technology to give workers superpowers and in fact, make the work more human, not less,” Waldmann concludes, underscoring the transformative potential of Homebase’s HR solutions for hourly workers.

WasteX Secures $450k to Expand Biochar Solution in Indonesia

In a significant boost for climate technology and sustainable farming practices, WasteX, an emerging climate tech startup with operations in Indonesia and the Philippines, has successfully secured a US$450,000 investment from impact fund P4G Partnerships. This infusion of funds marks a pivotal moment for the company, which was launched less than two years ago, stemming from a venture builder initiative aimed at turning agricultural waste into a resource through innovative technology.

Transformative Solution for Sustainable Agriculture

WasteX has developed a proprietary, small-scale, and semiautomated carbonizer technology that transforms farm waste into biochar, a carbon-rich product that enhances soil fertility and sequesters carbon dioxide, thereby reducing greenhouse gas emissions. This breakthrough has the potential to revolutionize agricultural practices by:

  • Empowering farmers: WasteX’s solution is designed to significantly increase agricultural yield while reducing the dependence on chemical fertilizers.
  • Reducing emissions: By converting farm waste into biochar, WasteX’s technology helps in mitigating climate change impacts.
  • Promoting sustainability: The move towards biochar production facilities across Indonesia highlights WasteX’s commitment to sustainable agricultural innovations.

The newly acquired funds from P4G Partnerships will be channeled towards establishing biochar production facilities throughout Indonesia, in collaboration with local mills and poultry farms. This strategic expansion is set to empower more farmers with WasteX’s sustainable solution, creating a favorable regulatory and commercial environment for the growth and adoption of this innovative technology.

Table 1: Impact of WasteX’s Solution on Agriculture

Parameter Before WasteX After WasteX Implementation
Crop Yield Increase 0% 95%
Fertilizer Use 100% 50%
Emission Reduction 0% Significant

Pawel Kuznicki, the founder and CEO of WasteX, highlighted the importance of this funding round, stating, “This investment from P4G Partnerships is a testament to the potential of WasteX’s technology to create a sustainable and profitable agricultural ecosystem. We are excited to scale our solution and further contribute to the global fight against climate change.”

Key Highlights from WasteX’s Journey:

  • Secured US$450,000 investment from P4G Partnerships.
  • Proprietary technology transforms farm waste into biochar, improving soil health and reducing emissions.
  • Plans to establish biochar production facilities across Indonesia, in collaboration with local agricultural entities.
  • Significant increase in crop yields and reduction in fertilizer use among partner farmers in the Philippines and Indonesia.
  • Enables farmers to mitigate the impact of fertilizer price volatility and sell carbon credits through the WasteX app.

The global agricultural sector faces numerous challenges, including volatile fertilizer prices exacerbated by geopolitical tensions and rising inflation. WasteX’s technology offers a timely solution, enabling farmers to mitigate these impacts and transition towards more sustainable and resilient farming practices. Beyond P4G Partnerships, WasteX has attracted attention and investment from other notable entities, including Wavemaker Impact and Tokyo-based Norinchukin Bank, underscoring the broad support for innovative solutions to climate and agricultural challenges.

Is the Next Major Advancement in AI Emotional Comprehension? Hume’s $50M Funding Suggests So

In a striking development that has captured the attention of the venture capital and technology worlds alike, Hume AI, a burgeoning startup, has successfully secured $50 million in Series B financing. The funding round was spearheaded by EQT Ventures, with notable contributions from Union Square Ventures, Nat Friedman & Daniel Gross, Metaplanet, Northwell Holdings, Comcast Ventures, and LG Technology Ventures. This substantial injection of capital signifies a strong vote of confidence in Hume AI’s innovative approach to artificial intelligence.

A Unique Proposition in AI

Founded and led by CEO Alan Cowen, previously a distinguished researcher at Google DeepMind, Hume AI distinguishes itself in the crowded AI marketplace with a singular focus: developing an AI assistant that not only comprehends human emotion but also responds and communicates in kind. This ambitious endeavor aims to provide a platform upon which other enterprises can construct emotionally aware chatbots, leveraging both the assistant and its underlying data.

Table 1: Hume AI’s Funding Round Participants

Participant Role
EQT Ventures Lead Investor
Union Square Ventures Investor
Nat Friedman & Daniel Gross Investor
Metaplanet Investor
Northwell Holdings Investor
Comcast Ventures Investor
LG Technology Ventures Investor

Hume AI’s product offering diverges significantly from existing AI models like ChatGPT and Claude 3, which are primarily text-based. Hume AI innovates by employing voice conversations as its primary interface, enabling it to interpret the user’s intonation, pitch, pauses, and more, thereby enriching the interaction with emotional depth.

Located in New York City and named after the esteemed Scottish philosopher David Hume, the startup recently unveiled its “Empathic Voice Interface (EVI),” marketed as the first conversational AI equipped with emotional intelligence. The public demo of this groundbreaking technology is available at, accessible via any device with a microphone.

The Importance of Emotional Intelligence in AI

Understanding human emotion is not merely a technological feat; it’s a cornerstone for crafting more nuanced, relatable AI experiences. While it might seem straightforward for an AI to recognize basic emotions such as happiness or sadness, Hume AI aims much higher. The startup has identified 53 distinct emotions it can detect, ranging from admiration and love to more complex states like nostalgia and triumph. This extensive emotional range is pivotal for Hume AI’s mission to offer not just an AI that listens but one that genuinely understands and interacts with human feelings on a deeper level.

How Hume AI Stands Out

  • Voice Interface: Unlike its predecessors, Hume AI utilizes voice as its main interaction channel, allowing for a more natural and expressive communication form.
  • Emotional Range: The ability to recognize and respond to 53 different emotions sets Hume AI apart in its approach to user interactions.
  • EVI Public Demo: A publicly accessible demonstration of its Empathic Voice Interface showcases the practical application of its emotional intelligence capabilities.

Alan Cowen, in communication with VentureBeat, emphasized that emotional intelligence is not just about understanding feelings but also inferring intentions and preferences, a critical aspect of AI interaction. This understanding is enhanced by voice AI’s ability to pick up on subtle vocal cues, making the AI more adept at meeting user needs and preferences.

Advanced Emotional Detection Techniques

Hume AI’s ability to discern emotions from voice hinges on comprehensive research, including controlled experimental data from hundreds of thousands of individuals worldwide. These studies, detailed on Hume AI’s website, involved intricate analyses of vocal bursts and facial expressions across diverse cultures, forming the basis for the AI’s emotional recognition capabilities.

The implications of this research are vast. By training deep neural networks on a rich dataset of emotional expressions, Hume AI has crafted an AI model that excels in understanding and conveying emotional nuances, far beyond what current AI technologies offer.

Future Directions and Impact

The success of Hume AI’s Series B funding round and the advanced development of its Empathic Voice Interface (EVI) mark a significant milestone in the evolution of artificial intelligence. By integrating emotional intelligence into AI, Hume AI is not only pioneering a new domain of technology but also paving the way for more meaningful human-AI interactions. The potential applications are boundless, from enhanced customer support and companionship to aiding in mental health and education by providing a sympathetic ear and emotional support.

As Hume AI continues to refine its technology and expand its applications, the future of AI looks increasingly empathetic. This development promises not just technological advancement but a shift towards AI that understands and respects the complexity of human emotions, potentially transforming how we interact with machines and, by extension, with each other.

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