JPMorgan acquired a "substantial amount" of First Republic Bank's assets and deposits. The Federal Deposit Insurance Corporation (FDIC) took control of the troubled bank and oversaw its sale through a bidding process over the weekend. Per TechCrunch, First Republic's assets and deposits were worth $330B. More: - Starting today, 84 branches of First Republic will be rebranded to JPMorgan Chase, with the bank assuring that all depositors will have full access to their funds.
- JPMorgan will assume $92B worth of deposits, $173B worth of loans, and $30B of securities.
- FDIC will need to bear $13B in losses at First Republic.
- Per Axios, First Republic's banking structure had similarities with SVB, with 57% of its business loan portfolio allocated to VC and PE firms last year.
Zoom out: - First Republic is the third U.S. bank to fail this year, after Silicon Valley Bank's and Signature Bank's collapse earlier in May.
- First Republic started to spiral last week after it announced that customers withdrew $100B worth of deposits in Q1 2023 following the downfall of SVB.
- By Friday, the bank's shares had plummeted to $3.51 per share, 97% down YTD.
- The NYSE had to halt trading of First Republic's shares multiple times last week due to the steep downfall in share prices.
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What the numbers say: Findings from the recent VC Human Capital survey conducted by Venture Forward, NVCA, and Deloitte show that the VC industry has made progress in increasing gender, racial, and ethnic diversity since 2016. The survey shows that 26% of investment professionals across the 315 U.S.-based VC firms surveyed were females. Female representation had steadily improved from 15% in 2016 to 23% in 2020. Why it matters: One study referenced by the report demonstrated a 5.8% increase in success rates in diverse investing teams compared to homogenous teams. Another study showed a 1.5% increase in overall fund returns and a 9.7% increase in profitable exits in VC firms that increased their female partners by 10%. Having diverse teams in VC firms helps increase the number of investments in startups led by underrepresented founders. What happened: VC firms have an average of 20 employees and rely mostly on personal networks to fill open positions. This poses a challenge to increasing diversity in organizations. Where to see the impact: 46% of surveyed firms had a diversity strategy in place, whereas 44% had an inclusion strategy. Setting DEI goals, actively seeking candidates outside personal networks, and developing objective metrics for promotion are a few of the recommendations provided by the report to increase diversity in VC firms.
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Turkish grocery delivery platform Getir is in talks to acquire German rival Flink. The acquisition news comes as Flink was in the process of raising a $100M funding round from existing investors. The firm is expecting a $1B valuation at the funding round, down from its previous valuation of $2.1B in 2021. More: - Flink has raised $1B in total funding to date, $750M of which came through a Series B round in December 2021.
- Investors such as DoorDash, Prosus & Naspers, and Mubadala Capital Ventures have backed the firm.
- Abu Dhabi's sovereign wealth fund Mubadala is also a backer of Getir.
- Flink's German division is expected to be profitable by the end of 2023, while its French and Dutch subsidiaries aim to be profitable by the end of 2024.
Zoom out: - The move comes five months after Getir acquired Gorillas for $1.2B, giving the merged entity a $10B valuation.
- Last month, Getir raised $500M in fresh funding at a $6.5B valuation, around half its peak valuation of $12B from March 2022.
- Mubadala contributed $300M to the funding round, with the remaining $150M to $200M given by existing backers.
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Sequoia Capital has roped in national security advisor Beacon Global Strategies to assess the impact of impending U.S. government restrictions on tech investment in China, sources told The Information. The move comes as President Joe Biden is on the verge of signing an executive order to restrict U.S. investment outlay into China across critical sectors such as semiconductor manufacturing and artificial intelligence. More: - Legislators advocated for the restrictions, arguing that U.S. capital contributions provide China a competitive advantage in emerging technology sectors.
- Sequoia's Chinese VC arm, Sequoia Capital China, is one of the largest backers of startups in China.
- Sequoia Capital China recently backed several new AI startups in China that are looking to rival OpenAI.
- Beacon is reportedly assessing the implications of impending restrictions on Sequoia's investments.
- Last year, Sequoia Capital China raised $9B from several investors, including U.S. institutional investors and endowments, for four new funds.
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VC firms, including Tiger Global, Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global, have picked up OpenAI's shares worth $300M, per documents seen by TechCrunch. The San Francisco-based AI startup has concluded its tender offer, which was aimed at giving existing employees an opportunity to liquidate their holdings. The transaction valued the firm at between $27B to $29B. More: - Reportedly, outside investors now collectively own more than 30% of OpenAI.
- Existing investor Founders Fund participated in the current tender offer.
- In January, Microsoft announced it would invest "billions of dollars" in OpenAI.
- The investment is estimated to be worth $10B, per sources close to the matter.
Zoom out: - The transaction demonstrates VCs' current enthusiasm for the generative AI sector.
- In Q1 2023, VC concluded 46 deals worth $1.7B, with an additional $10.68B worth of deals announced but not completed.
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South San Francisco, California-based biotech startup Maze Therapeutics is set to receive a $150M cash and equity infusion from Sanofi. In addition, the business signed a global licensing deal with Sanofi for its glycogen synthase 1 (GYS1) program and lead asset MZE001. Maze could potentially receive $600M through the licensing deal, subject to development, regulatory, and sales milestones. More: - Maze is leveraging genetic insights to develop precision medicines.
- The GYS1 program is aimed at treating Pompe disease "by limiting disease-causing glycogen accumulation," per Maze.
- Maze intends to use the incoming funds to advance the treatment of two candidates for chronic kidney disease.
Zoom out: - 15% of Sanofi's current product pipeline consists of therapeutics for Pompe disease.
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Quick Hits: - The company behind these surgical robots is planning to list on Nasdaq. Last day to fund your investment is on 5/10.*
- JPMorgan's healthcare-focused VC arm, Morgan Health, invested $25M into New York-based fertility startup Kindbody as part of its $100M fundraiser that valued the firm at $1.8B.
- Vera Equity received $20M in capital commitments towards its debut fund to back early-stage fintech startups.
- Canadian plant-food startup Above Food is set to raise $44M through a SPAC merger with blank check firm Bite Acquisition Corp.
- Israeli AI startup Alison secured $5.1M in pre-seed funding from Andreessen Horowitz, Crescendo Venture Partners, and yellowHEAD.
- Messaging app startup IRL's board of directors suspended CEO Abraham Shafi after a report emerged highlighting a pattern of misconduct. The board roped in Scott Kauffman as acting CEO.
- Demo Divvy, get an Ember heated mug. Hot coffee and quick and easy expense management — get both when you demo Divvy.*
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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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