But is anybody even listening?

Deposits at Silicon Valley Bank, one of Sand Hill Road’s biggest lenders and bankers for startups and funds alike, have been on a steady decline this year. You can attribute that to less funding to go around, sure. But there’s something else people aren’t talking about as much, and that’s this: Spending at startups hasn’t slowed down.

Even as funding levels dipped, “this quarter was the highest cash burn quarter that we had seen,” Silicon Valley Bank CEO Greg Becker said on the bank’s second quarter earnings call recently.

At the outset, it’s a bit puzzling, Becker hinted on the call. “With all the messaging out there from investors, why would that actually be happening?” he asked.

But the uptick in spending might have more to do with the initial costs of cutting back (think severance packages or getting out of real estate contracts), than startups designing new swag during the downturn. In other words, startups may be spending more at the outset to start getting more frugal for this next jaunt. When it comes to cash burn, there’s “a little bit of a lag,” Becker said.

The problem is that some other things are lagging behind, too. Namely, some early-stage startups aren’t paying back their loans.

In the second quarter of 2022, Silicon Valley Bank said that it had $22 million in gross loan charge-offs (a charge-off is when a bank considers a loan a loss)—$20 million of which the bank hadn’t reserved for. That’s because some of the early-stage tech and life sciences or healthcare companies the bank works with were struggling to find capital or liquidity. One of those clients, in particular, failed to pay $6 million.

For Silicon Valley Bank’s business, this really isn’t a huge deal. More than 71% of the company’s lines of credit go to venture or private equity funds or private banking clients. Only 2% of the company’s loans—or about $1.9 billion worth—are handed out to the most-risky early-stage companies (that’s down from 30% of the bank’s total loans in 2000 and 11% in 2009). That being said, it’s telling that Silicon Valley Bank is estimating that a larger chunk of its clients won’t be able to pay up. Silicon Valley Bank is now estimating up to 0.35% in annualized net charge-offs by the end of 2022—which would be a rather substantial uptick from the 0.12% annualized rate of charge-offs it saw in the second quarter, or the 0.10% it saw this time last year.

All in all, charge-offs levels are still pretty low—and, good news for the bank, VCs and PE funds have a great track record of paying back the capital they borrow. 

But as for early-stage startups, the rest of this year will depend on whether startups have access to capital—or a buyer. 

“I think as we’ve already touched on, there’s a high level of uncertainty,” said Marc Cadieux, Silicon Valley Bank’s Chief Credit Officer on the call.

And now, this month’s cartoon, brought to you by Ian Foley…

It’s good to be back… Did you miss me? Thank you for the warm wishes as I biked across Iowa last week. I am a little sore, but somehow missed the heat wave, and my heart is full from pork chops, rhubarb pie, corn, and new friends. Here’s a picture of the noble steed that took me the whole way:

Jessica Mathews

I’m back and digging into some exciting stories. Send me a note, and stay tuned!

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Aisera, a Palo Alto-based service experience platform for automated employee and customer experiences, raised $90 million in Series D funding. The growth equity business within Goldman Sachs Asset Management and Thoma Bravo led the round and were joined by investors including True Ventures, Menlo Ventures, Norwest Venture Partners, Icon Ventures, Khosla Ventures, First Round Capital, Maynard Webb, Sherpalo Ventures’ Ram Shriram, and Silicon Valley Bank. 

- Parafin, a San Francisco-based payment processor software developer, raised $60 million in Series B funding. GIC led the round and was joined by investors including Thrive Capital and Ribbit Capital.

-  Homeward, a San Francisco-based health care provider to rural communities, raised $50 million in Series B funding. ARCH Venture Partners and Human Capital led the round and were joined by investors including General Catalyst and 7wireVentures co-founders Lee Shapiro and Glen Tullman. 

- Hysata, a Wollongong, Australia-based hydrogen electrolyser technology company, raised $42.5 million AUD ($29.58 million) in Series A funding. Virescent Ventures led the round and was joined by investors including Kiko Ventures, IP Group Australia, Vestas Ventures, Hostplus, and BlueScope. 

- Cybrary, a College Park, Md.-based training platform for cybersecurity professionals, raised $25 million in Series C funding co-led by BuildGroup and Gula Tech Adventures. 

- Oui Therapeutics, a New Haven, Conn.-based digital therapeutic company for suicide, raised $11 million in Series A funding. Athyrium Capital, CVS Health, and Otsuka led the round and were joined by First Round Capital.

- NG.CASH, a Rio de Janeiro-based financial management app for Gen Z, raised $10 million in seed funding co-led by Andreessen Horowitz and monashees. 

- Infima Technologies, a San Mateo, Calif.-based mortgage security prepayment prediction platform, raised $5 million in seed funding. Radical Ventures led the round and was joined by investors including Franklin Templeton and ThirdStream Partners. 

- Raincoat, a San Jaun, Puerto Rico-based climate insurance solutions provider, raised $4.5 million in seed funding. Anthemis led the round and was joined by investors including SoftBank Group’s SB Opportunity Fund, Banco Popular, Consorcio, 305 Ventures, and Divergent Capital.

- MUSO, a London-based data company for piracy and unlicensed media consumption, raised £3.2 million ($3.91 million)  in funding from Puma Private Equity. 

PRIVATE EQUITY

- Mercer Global Advisors acquired Mallard Advisors, a Hockessin, Del.-based wealth management firm. Financial terms were not disclosed. 

EXITS

- Trelleborg Group agreed to acquire Minnesota Rubber and Plastics, a Minneapolis-based elastomer and thermoplastic solutions provider, from KKR, for approximately $950 million. 

- Permira, acquired a majority stake in Reorg, a New York-based credit intelligence, data, and analytics provider, from Warburg Pincus. Financial terms were not disclosed. 

- SK Capital Partners acquired Valtris Specialty Chemicals, an Independence, Ohio-based additives and precursors manufacturer, from H.I.G. Capital. Financial terms were not disclosed.

OTHER

- Semtech agreed to acquire Sierra Wireless, a Richmond, British Columbia-based internet of things technology developer, for $1.2 billion including debt.

- Nikola Corp. agreed to acquire Romeo Power, a Cypress, Calif.-based electrification solutions company for commercial vehicle applications across the transportation, industrial, and marine markets. A deal values the company at $144 million.

- Braxia Scientific acquired KetaMD, a Miami-based mental health telemedicine company using ketamine-based treatments. Financial terms were not disclosed. 

- iCapital acquired SIMON Markets, a New York-based digital wealth management platform. Financial terms were not disclosed.  

- Netskope acquired Infiot, a Menlo Park, Calif.-based zero trust security, network and application optimization, and A.I.-driven operations company. Financial terms were not disclosed.

- ResMed acquired mementor, a Leipzig, Germany-based digital medical products developer. Financial terms were not disclosed. 

- Slingshot Aerospace acquired Numerica’s Space Domain Awareness division, a Colorado Springs and Fort Collins, Colo.-based optical sensor network for satellite tracking, and Seradata, a Northampton, U.K.-based satellite database and space market analytics company. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- L’ATTITUDE Ventures, a San Francisco-based venture capital firm, raised $100 million for a fund focused on Latino-founded early-stage companies.

PEOPLE

- Baird Capital, the Chicago-based venture capital and private equity arm of Baird, hired Melissa Kandinata as a vice president and John Reim as an associate. Matt Gura and Andrew Szyman were promoted to senior associate. Formerly, Kandinata was with Cisco Investments and Reim was with Citigroup.

- Triple Point Ventures, a London-based venture capital fund, hired Manuel Antunes and Jamie Tomalin to their investment team. Formerly, Antunes was with MSM and Tomalin was with Barclays.

- Vida Capital, an Austin-based investment firm, hired Matthew Roesler as managing director, structured credit. Formerly, he was with Apollo Management.