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This VC Firm Just Raised More Than $1 Billion To Invest in Moonshots: Term Sheet

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We've got a Term Sheet exclusive this morning.

Lux Capital, a New York-based venture capital firm, has raised more than $1 billion across two new funds to back companies on “the cutting edge of science.” The firm raised $500 million for its sixth flagship early-stage fund and another $550 million for an opportunity fund focused on growth-stage investments. Limited partners include global foundations, university endowments, and tech billionaires.  

Lux also announced a new hire: Deena Shakir, formerly of GV (Google Ventures), has joined as an investment partner. 

To the regular person, Lux’s investments are considered moonshot. The firm has backed entrepreneurs that are working on everything from neurostimulation to nuclear energy to synthetic biology. During my last interview with co-founder and managing partner Josh Wolfe, I actually called one of his portfolio companies “freaking crazy.”

But to Wolfe, they’re anything but. “We’re interested in founders who are scientific rebels,” he told me. “They are focused on shrinking the gap between sci-fi and ‘sci-fact.’ In other words, these are things that were once conceived in someone’s imagination and are now being crystallized into reality.”

CTRL-labs, which is developing a non-invasive neural interface, is one such company. What does "a non-invasive neural interface" do exactly? To put it more simply, CTRL-labs is building a device capable of translating electrical muscle impulses into digital signals (see it in action here).

Wolfe was an early backer of the company, and he hinted that his firm will be making an even more meaningful investment in the near future through its newly-raised funds. I confirmed that CTRL-labs, which has raised more than $67 million in total funding, is currently in the midst of raising a fresh round of capital.

“We’ve had some important technical breakthroughs in the last six months that have put us in a position to raise more substantially,” said CTRL-labs CEO Thomas Reardon. One of those breakthroughs, he added, is the ability to non-invasively observe the human motor nervous system at the level of an individual neuron.

Wolfe believes Reardon’s technology isn’t just limited to the obvious medical and biotech applications. He describes a world in which people will tap their fingers together to turn on Spotify and swipe to the left in the air to change the next song. “Josh is just relentless,” Reardon says. “I can’t tell you how many times he’s had to remind me just how big this company could be.”

Other companies in the Lux portfolio include Desktop Metal, Planet, Rigetti Computing, and Auris Health (acquired by Johnson & Johnson for $3.4 billion in cash). The firm will be beefing up its investments in sectors including digital health with the addition of Deena Shakir coming on as an investment partner.

“What was previously frontier tech is now available to the masses,” Shakir told Fortune. “You can sequence the human genome and get the data on your phone. That’s both a challenge and an opportunity.”

Technology is evolving at a pace faster than ever before, and Shakir believes that rapid innovation could be a double-edged sword for venture firms investing in moonshot companies. “There are ethical challenges we’ve never seen before, and it’s not something that can be ignored anymore. Investors are responsible for helping foster those ethical standards in their companies during the earliest days.”

Read the story on Fortune.com

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… AND ELSEWHERE:

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VENTURE DEALS

Wish, a San Francisco-based mobile shopping app, raised approximately $300 million in Series H funding at a $11.2 billion post-money valuation. General Atlantic led the round.

Aspire, an Indonesia-based company aimed at small and medium enterprise banking, raised $32.5 million in Series A funding. MassMutual Ventures Southeast Asia led the round, and was joined by investors including Arc Labs, Y Combinator, Hummingbird and Picus Capital.

Recogni Inc, a San Jose, Calif.-based provider of an artificial intelligence platform for autonomous vehicles, raised $25 million in Series A funding. GreatPoint Ventures led the round, and was joined by investors including Toyota AI Ventures, BMW i Ventures, Faurecia and DNS Capital.

Solana, a web-scale blockchain, raised $20 million in Series A funding. Multicoin Capital led the round, and was joined by investors including Distributed Global, Blocktower Capital, Foundation Capital, Blockchange VC, Slow Ventures, NEO Global Capital, Passport Capital and Rockaway Ventures.

Harver, a Netherlands-based pre-employment assessment software company, raised $15 million in Series B funding. Insight Partners led the round.

Catalyst, a New York City-based customer success platform, raised $11 million in funding. Accel led the round.

Bloomscape, a Detroit-based direct-to-consumer plant company, raised $7.5 million in Series A funding. Revolution Ventures led the round, and was joined by investors including Endeavor

Cymatic, a Raleigh, N.C.-based provider of user and entity behavior analytics platform, raised $4.5 million in seed funding. The investors were not named.

TalentGuard, an Austin, Texas-based HR tech company, raised $4 million in Series B funding. LiveOak Venture Partners led the round.

Trueface, a Los Angeles-based computer vision company that augments existing camera data into real-time actionable information, raised $3.7 million in seed funding. Lavrock Ventures led the round, and was joined by investors including Scout Ventures and Monroe Capital.

Prodly, a San Francisco-based provider of reference data management solutions for Salesforce users and system integration partners, raised $3.5 million. Shasta Ventures led the round, and was joined by investors including Norwest.

New Knowledge, an Austin, Texas-based cybersecurity company, raised $3 million in funding. Investors include BuildGroup and Lux Capital.

Slingshot, an Orem, Utah-based customer engagement platform for home services providers, raised $2.4 million in seed funding. RET Ventures led the round.

PRIVATE EQUITY DEALS

HGGC acquired Monotype, a Woburn, Mass.-based font and imaging technology specialist, for $825 million in an all-cash deal.

TA Associates acquired Wealth Enhancement Group, a Plymouth, Minn.-based independent wealth management firm. Financial terms weren’t disclosed. 

PriceSpider, which is backed by Frontier Capital, acquired ORIS Intelligence, a Columbus, Ohio-based provider of insights for manufacturers. Financial terms weren’t disclosed. 

AFC Industries, which is backed by Incline Equity Partners, acquired The Boulder Company, a Des Moines, Iowa-based provider of industrial components to original equipment manufacturers. Financial terms weren’t disclosed. 

Advancing Eyecare, which is backed by Atlantic Street Capital, acquired Ophthalmic Instruments & Consulting Company, a Woodinville, Wash.-basedprovider of classical and diagnostic equipment in the Pacific Northwest. Financial terms weren’t disclosed. 

EQT agreed to acquire a majority stake in Aldevron, a Fargo, N.D.-based producer of nucleic acids, proteins, and antibodies. Financial terms weren’t disclosed. 

Antin Infrastructure Partners will acquire Veolia Environnement’s US district energy business, for $1.25 billion.

OTHER DEALS

Jamf acquired Digita Security, a macOS security provider. Financial terms weren’t disclosed. 

IPOs

SmileDirectClub, a Nashville-based invisible teeth straightening firm, plans to raise up to $1 billion in an IPO, CNBC reports citing sources. Firms including Clayton, Dubilier & Rice, and Kleiner Perkins back the firm. Read more.

Dynatrace Holdings, a Waltham, Mass.-based enterprise cloud platform, raised $570 million in an initial public offering of 35.6 million shares (5% insider sold) priced at $16, an upsized IPO. The firm posted $431 million in revenue for the 12 months ended March 2019 and loss of $166.2 million. Thoma Bravo Fund backs the firm. It plans to list on the NYSE as “DT.” Read more.

Sundial Growers, a Canadian cannabis producer, plans to raise an estimated $143 million in an IPO of 11 million shares priced at $13. The firm did not post revenue in 2018, and loss of $56.5 million. It plans to list on the Nasdaq as “SNDL.” Read more.

Iguá Saneamento SA, a Brazilian sanitation firm, is weighing an IPO, Reuters reports citing sources. Financial terms weren’t disclosed. Read more.

EXITS

MRI Software acquired Leverton, a New York-based artificial intelligence-powered data extraction solution for real estate and corporate documents. Financial terms weren’t disclosed. Leverton had raised approximately 15 million euros ($16.6 million). 

Seacoast Capital sold its stake in Northwest Cascade, a Puyallup, Wash.-based provider of portable sanitation rental services, septic pumping, drain cleaning services and heavy civil, municipal and residential construction services. Financial terms weren’t disclosed. 

J.C. Flowers & Co. LLC sold Acuon Capital, a South Korea-based consumer finance and leasing company, to Baring Private Equity Asia. Financial terms weren’t disclosed. 

Abry Partners acquired Franklin Energy Group, a Port Washington, Wash.-based provider of customized electric and natural gas energy efficiency programs for utilities, municipalities, and government bodies, from Kohlberg & Company, LLC. Financial terms weren’t disclosed. 

FIRMS + FUNDS

Oak HC/FT, a Greenwich, Conn.-based private equity and venture capital firm, raised $800 million for its third fund.

Vida Ventures, a Boston-based life sciences venture firm, raised $600 million for its second fund, Vida Ventures II, LLC. 

Wellington Partners, a Germany-based venture capital firm, raised 210 million euros ($231 million) for its fifth fund, Wellington Partners Life Science Fund V. 

Powerplant Ventures, a Hermosa Beach, Calif.-based growth equity firm, raised $165 million for its second fund.

HCAP Partners, a San Diego-based private equity firm, raised $150 million for its fourth fund, HCAP Partners IV.

PEOPLE

Cathy Gao and Nate Leung joined Sapphire Ventures as vice presidents.

Anna Khan joined CRV as a general partner and Kristin Baker Spohn as a venture partner.