Fee Facelift

ARK Slashes Fees to Draw Venture Investors, Congruent Raises $300 Million for Eco Vision, and a Startup Looks to Improve its Cybersecurity Prowess With New Funding.

Author

Adam from VC Brags
April 20, 2023

Welcome Shareholders,

In this daily edition of the Brags Newsletter, weā€™ll cover how ARK Invest looks to draw investors into its struggling Venture Fund by slashing management fees. Also, a VC looks to propel climate tech companies with its new fund, and Coro raises $75 million to deliver AI-driven cybersecurity innovation.

So sit back, grab a snack, and enjoy!

Venture Today šŸ‘

  • Cathie Wood led ARK Invest, which attracted billions in inflows during the pandemic, is now struggling to attract capital for its venture fund due to challenging macroeconomic conditions.

ARK launched its venture capital-focused fund in September 2022, despite challenging market conditions due to rising rates. ARK said that with its venture fund, it wanted to make venture capital accessible to all investors by targeting highly innovative companies throughout both private and public market life cycles.

However, ARK has struggled to attract investors for its venture fund, forcing it to cut management fees to offer a better value proposition. In March, ARK reduced the fund's expense ratio from an estimated 4.2% to 2.9% by waiving its management fee until November 2024. As of March 31, the fund held approximately $15 million in net assets, significantly lower than the firm's other offerings.

Whoā€™s Raising?

  • Climate-focused VC firm Congruent Ventures has successfully closed its inaugural continuity fund, securing $304 million in commitments.

The new fund will nearly double the venture firm's assets under management to over $700 million. Congruent's current LPs comprise endowments, pensions, and foundations, featuring CalSTRS, the Grantham Foundation, Three Cairns Group, and Sobrato Capital, with the University of California Regents as one of its initial institutional investors. Continuity and opportunity funds are dwindling as VCs shift away from late-stage and growth investments, leading to fewer startups achieving major valuation step-ups.

However, climate tech remains more resilient, attracting personal investments and enjoying market stability, driven by LPs' increasing concerns about their exposure to the climate crisis. Congruent said it will use the new fund to extend its investments in select portfolio companies beyond the early stage, potentially up to Series C and D rounds. It has already invested in four portfolio companies: Meati Foods, AMP Robotics, Fervo Energy, and Span.IO, focusing on alternative proteins, recycling tech, geothermal tech, and smart-home energy systems, respectively.

Startup of the Day

  • AI Cybersecurity Platform Coro is raising $75 million from Energy Impact Partners in a Series C2 round, valuing the firm at $575 million.

Coro offers a comprehensive cloud-based SaaS solution for a businessā€™s cybersecurity needs, encompassing device monitoring, user activity oversight, and threat remediation. The company, which focuses primarily on mid-market customers, has amassed approximately 5,000 clients since its 2015 inception and achieved a 300% growth in annual recurring revenue over the past four years.

The new round comes a year after the Israel-based company raised a $60 million Series C from Balderton and JVP (the valuation has remained the same across both rounds). The company will utilize the funding to invest in R&D, enhance its AI-driven cybersecurity platform, and explore potential M&A opportunities in the cybersecurity space while continuing to expand its team and business development efforts.

Fresh Finds

  • Thoropass offers an end-to-end compliance solution, combining intelligent software, expert guidance, continuous monitoring, and a streamlined audit process for various frameworks like SOC2, ISO 27001, HIPAA, HITRUST, and more.

  • Thoropass serves as a one-stop shop for implementing, operating, and monitoring security and privacy controls for a wide range of standards, catering to all digital compliance requirements.

  • Thoropass combines user-friendly automation tools with the in-depth domain expertise to ensure customers are fully supported in maintaining auditable systems, enabling compliance without hindering innovation for both product creators and consumers.

Memes and Other Things

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