| You're receiving Dealmaker for free. Upgrade to a paid subscription to access all of our award-winning tech and business journalism. Subscribe to The Information here for 25% off your first year (normally $399). Welcome back! Another day, another multibillion-dollar valuation for a generative AI startup! Today it's Synthesia, a video-generation startup that's near a $2 billion price tag in a round led by New Enterprise Associates, we scooped Thursday. Given the firehose of AI deals, it's easy to forget that plenty of startups aren't as lucky – and could be getting perilously close to running out of cash. Digital health company Forward's decision to shut down on Tuesday, laying off nearly 200 staff, was a reminder: The hangover from the funding bonanza in 2020–21, which minted hundreds of unicorns, hasn't faded. Founded in 2017 by a former Googler, Adrian Aoun, Forward had positioned itself as an alternative to standard doctor office visits. It offered subscription-based access in 19 medical health clinics in urban areas. Then late last year it unveiled tech-laden health stations called CarePods (our writer who visited a prototype last year described it as "an airport lactation room crossed with a space capsule"). With the glitzy launch of the CarePods, Forward raised $100 million at the same valuation it had fetched in 2021, bringing its total funding to at least $400 million. But running clinics and rolling out high-tech health stations isn't cheap. The company had been trying to fundraise for months to finance its CarePod business, according to a person with knowledge of the fundraising attempts. State filings, provided by Prime Unicorn Index, indicate the company was also trying to sell shares at a steep discount—$5.85 per share, down from $9.69 in the prior round—and used pay-to-play tactics to pressure existing investors to buy in. Forward was able to raise some of the capital, according to the same person and another person close to the deal, but ultimately not enough to stay afloat. It was working through how to return cash to investors, we reported. We doubt there's much left for its equity backers, which include Khosla Ventures, Founders Fund, Abu Dhabi Investment Authority and SoftBank, as well as celebrities including recording artist Abel Tesfaye (The Weeknd) and actor Matthew McConaughey. Despite the speedy evolution of AI-powered applications, healthcare is still a very difficult field to innovate in, as our reporting on the travails of Carbon Health, Truepill and Capsule has shown. Plus, while the pandemic accelerated interest in virtual services, from online classes to web conferencing to grocery delivery, momentum has fallen—in some cases, off a cliff. Apps such as Hopin and Run the World have been absorbed by other companies. The swing to pre-pandemic norms has also challenged health tech startups. "Patients want touch, not tech, or touch and tech," said Christina Farr, a general partner at Scrub Capital, a healthcare-focused venture capital firm. "But not just tech." Plus, bricks and mortar is expensive, which requires health tech companies that operate physical doctors' offices to constantly raise money. These days, that funding isn't a given. Investor Ben Horowitz has played to both sides of the political aisle, announcing in July his endorsement of Donald Trump for president, and then, once Vice President Kamala Harris entered the race, hosting a fundraiser for congressional Democrats at his house in Nevada and making personal donations to her campaign. But he has made no secret of his enmity for President Joe Biden and his picks for key federal agencies—particularly Gary Gensler, the U.S. Securities and Exchange Commission chair, who is almost certain to be given his walking papers when Trump takes office in January. Even with Gensler on the way out, it's clear Horowitz is still fuming about his aggressive posture toward crypto companies, which includes investigations into or lawsuits against some of the largest crypto companies in Horowitz's firm's portfolio, such as Coinbase, Uniswap and OpenSea. "Gary Gensler did all kinds of illegal stuff to terrorize people who were trying to comply with the law," Horowitz told The Information in an interview this week. By "illegal," Horowitz was likely referring to the belief among crypto proponents that the SEC overreached with its authority when it sued crypto companies, alleging that they had violated securities law when they facilitated trading of crypto tokens. The SEC didn't return a request for comment. Crypto markets have soared since the election on the hopes that what Horowitz called a "traumatic period" for the cryptocurrency sector is over. Bitcoin traded around $87,500 on Thursday afternoon, up from roughly $69,000 in the days before Trump's win. Tech stocks have also rallied across the board, including shares in Coinbase, which are up more than 40%. "Even if you don't like Trump, you're happy not to have Biden and Gary Gensler," as well as Federal Trade Commission Chair Lina Khan, Horowitz said. "So far, all the prices have gone up, which is kind of a leading indication that at least the market believes that [Trump] is not going to continue harassing and terrorizing them."—Jon Victor - Synthesia, an AI video model startup, is in talks to raise capital at a $2 billion valuation.
- Cendana Capital, an investment firm that backs venture firms investing in early-stage startups, is raising $350 million, according to securities filings.
- Installment lender Klarna has filed confidentially for a U.S. initial public offering, the company announced Tuesday.
- Radiant Industries, a nuclear energy startup, has raised $100 million led by deep tech firm DCVC with participation from Andreessen Horowitz and Felicis.
- Earlier this week, Cory broke news that Databricks was discussing raising several billion dollars at a $55 billion valuation or higher. Now Thrive is in talks to invest about $1 billion in Databricks at that valuation, Bloomberg reports. Thrive and Databricks declined to comment.
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