Public filings of the California Public Employees' Retirement System (CalPERS) seen by Insider show that many of the firm's investments in VC funds over the past two decades resulted in dismal returns. Between 2000 and 2020, the firm's VC investments yielded 0.49% returns. More: - CalPERS is the largest public pension plan in the U.S., managing over $440B in assets for over 1.5 million California-based employees and retirees.
- The firm invested $75M, $75M, and $25M in Carlyle Group, NEA, and DCM's venture funds in the early 2000s. The latter two earned just 2.7% and 1.9% IRR.
- CalPERS' $260M investment in Khosla Ventures' early and seed stage vehicles in 2009 yielded a return of 11.8% and 6.9% IRR, respectively, both below benchmark figures of 14.7% that year.
- Due to the dismal returns from VC funds, then-chief investment officer Joe Dear slashed the firm's VC investments.
- The firm returned to VC investing in 2020, with an aim to deploy $1B into the asset class every year.
- In 2022, CalPERS committed $300M and $400M to Tiger Global and Lightspeed Ventures' funds.
Zoom out: - Per Columbia Business School professor Leonard Sherman, limited partners typically expect a return of 25% to 30% IRR from early-stage funds.
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Investors have filed a proposed class-action complaint against FTX investors, including Sequoia Capital, Thoma Bravo, and Paradigm, accusing them of adding an "air of legitimacy" to their investment into the fallen crypto exchange. According to the lawsuit, the VCs engaged in misrepresentation, civil conspiracy, and false advertising — participating in marketing campaigns in 2021 to promote their investment. More: - Sequoia, Thoma Bravo, and Paradigm invested $214M, $100M, and $250M, respectively, into FTX.
- The trio participated in FTX's $900M Series B funding round in July 2021.
- The investors are accused of glorifying their investment, particularly Sequoia — which praised FTX founder and CEO Sam Bankman-Fried for playing video games during investor meetings and wrote a 14,000-word essay titled "Sam Bankman-Fried Has a Savior Complex — And Maybe You Should Too."
- Sequoia marked down its entire investment to zero after FTX, valued at $32B at its peak, filed for bankruptcy.
- The VCs maintain that they conducted sufficient due diligence before investing in FTX.
- Despite this, crypto lawyer Liam Hennessy argues that even if the due diligence was inadequate, the VCs are not liable to others.
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AI and quantum computing startup SandboxAQ secured $500M in fresh funding. Investors in the firm include former Google CEO Eric Schmidt — who is also the firm's chairman, Breyer Capital, T. Rowe Price funds, and TIME Ventures. More: - The firm spun out from Alphabet in March last year. Google is not a shareholder in the company as it wants it to collaborate with other cloud providers as well.
- SandboxAQ aims to bring AI and quantum computing to the telecom, financial services, health care, and security sectors.
- The firm already has over 15 enterprise and government clients.
- The U.S. Air Force gave SandboxAQ a contract to research quantum technologies last month.
- Its simulation software is currently used to accelerate drug development.
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A trio of biotech entrepreneurs and investors launched a new biotech-focused VC firm called Curie.bio. The firm secured $520M from investors such as GV, Andreessen Horowitz, and ARCH Venture Partners for its debut fund. In addition to leading investments, the firm aspires to serve as a "co-pilot" for drug discovery startups. More: - Zach Weinberg established the firm along with former Third Rock Ventures partners Alexis Borisy and Christoph Lengauer.
- Weinberg, founder of Flatiron Health, which was acquired by Roche in 2018, will lead the firm as its CEO.
- Borisy and Lengauer will step into chairman and chief scientific officer roles, respectively.
- Curie.bio's individual check sizes in seed-stage startups will range between $5M and $7M.
- The firm has already backed four companies, namely Forward Therapeutics, Astoria Biologica, Decrypt Biomedicine, and Differentiated Therapeutics.
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Rob Kniaz, the founding partner of European VC firm Hoxton Ventures, is reportedly in talks with investors to raise a deep tech-focused fund for his yet-to-be-launched VC firm. His departure date from Hoxton is yet to be finalized, but it is not imminent. Until then, Kniaz will continue to manage Hoxton's $215M fund that closed last year. More: - Kniaz co-founded Hoxton along with Hussein Kanji in 2013.
- The duo moved from the U.S. to the U.K. in a bid to invest in European startups.
- Notable companies backed to date include food delivery platform Deliveroo and cybersecurity firm Darktrace.
- Hoxton received a 100x and 50x return, respectively, on its bets on Deliveroo and Darktrace. After their respective IPO debuts, their share prices dropped 68% and 21%, respectively.
- Hoxton did incur a loss on its investment into Babylon Health.
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California-based user management and authentication startup Descope secured $53M in seed funding led by Lightspeed Ventures and GGV Capital. Incoming funds will be used to accelerate product development and back R&D efforts. More: - Descope provides a drag-and-drop platform to add authentication, user management, and authorization capabilities, such as passwordless login, single sign-on, password management, and permission management, for B2C and B2B applications.
- Security operations platform Demisto's core team established Descope in April 2022.
- Palo Alto Networks acquired Demisto in 2019.
- Dell Technologies, TechAviv, Cerca, J Ventures, and Silicon Valley CISO Investments participated in the fundraiser.
Zoom out: - VCs invested $3.2B into identity management startups in 2021.
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Quick Hits: - Athletic Brewing is pioneering a non-alcoholic craft beer revolution and donating 2% of sales toward protecting and restoring local trails.*
- Tech-focused VC firm SignalFire received commitments worth $900M for its latest fund.
- Supply chain automation platform Apkudo secured $37.5M in Series C funding led by closed Loop Partners' Leadership Fund and Piper Sandler Merchant Banking.
- On-demand car care technology startup Get Spiffy closed its Edison Partners-led Series C round with $30M in funding.
- VC firm Tykhe Block Ventures held the first close of its blockchain growth fund at $30M.
- Smartrr, a subscription platform for DTC Shopify brands, raised $10M in Series A funding led by Canvas Ventures.
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 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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