“I think the assumption is that the big buyers—the Big Tech buyers—are going to have painfully long processes,” Chelsea Stoner, general partner at Battery Ventures, said at Fortune Brainstorm Tech in Deer Valley, Utah, this week. “I think that’s just going to even increase from there.”

We’re seeing this play out in a big way right now with Microsoft and Activision Blizzard: On Tuesday, a U.S. judge denied the FTC’s request to temporarily block Microsoft’s nearly $69 billion acquisition of Activision Blizzard, the maker of games like Call of Duty, which is slated to close by July 18. The FTC is appealing the decision, though its request to pause the deal during the appeal was denied late Thursday. Importantly, Microsoft is still facing the FTC’s antitrust lawsuit, the trial for which is set to begin in August (the blockbuster deal was first announced early last year). Meanwhile on Friday the U.K. competition regulator extended the deadline for its review of the deal to Aug. 29.

That regulatory tension is something VCs like Battery Ventures’s Stoner have experienced first hand in the past: She said they previously sold customer service startup Kustomer to Facebook, and it took roughly a year to get the deal done, she estimated, even though she said it was a small company.  

The FTC itself is under scrutiny for its sweeping aggression toward Big Tech, as chair Lina Khan faced questions over the agency’s recent moves in a House Judiciary Committee hearing on Thursday. But even if the FTC ultimately fails in certain cases, it’s still a challenging environment for M&A.

That’s a big problem for venture investors, who are eager to materialize paper gains for some of their companies, but whose options for exits are few and far between. Exits are down through the first half of the year, and PitchBook analysts predict the “full-year figure will likely come in as the lowest of the decade,” they wrote in a recent report. Meanwhile the IPO market has remained largely stagnant.

“I don’t know if that changes the dynamic between how you think about a strategic sale versus IPO, but it’s definitely on our minds,” Stoner said of VCs. It’s also certainly on the minds of VC investors, too: Limited partners have grown increasingly stingy with their funds as they wait for liquidity. 

VCs will no doubt be watching what happens with Microsoft and Activision Blizzard (and Adobe and Figma’s would-be tie-up, for that matter). And if Stoner is right, they should buckle up for a more arduous M&A process for tech companies in the future. 

IPO buzz: Although the IPO market remains chilly, there are signs it’s heating up. On Wednesday, the Financial Times reported that Nvidia is in talks to become the anchor investor for chip designer Arm’s upcoming New York IPO, which could come as soon as September. (Remember, Nvidia tried to acquire Arm from SoftBank, but abandoned the deal amid regulatory scrutiny.) The Information also reported on Wednesday that VC-backed Liquid Death—the water brand known for its bold can packaging—hired Goldman Sachs to lead a possible IPO that could come in early 2024. 

Have a great weekend,

Anne Sraders
Twitter: @AnneSraders
Email: anne.sraders@fortune.com
Submit a deal for the Term Sheet newsletter here.

Jackson Fordyce curated the deals section of today’s newsletter.

Update, July 14, 2023: The online version of this newsletter has been updated to add a reference to the sale of Kustomer to Meta in 2022.

VENTURE DEALS

- Causaly, a London-based A.I. platform for biomedical research, raised $60 million in Series B funding. ICONIQ Growth led the round and was joined by Index Ventures, Marathon Venture Capital, EBRD, Pentech Ventures, and Visionaries Club. 

- HawkEye 360, a Herndon, Va.-based defense technology company, raised $58 million in Series D-1 funding. Funds and accounts managed by BlackRock led the round and was joined by Manhattan Venture Partners, Insight Partners, NightDragon, Strategic Development Fund, Razor’s Edge, Alumni Ventures, and Adage Capital.

- Secure Code Warrior, a Sydney, Australia-based agile learning platform, raised $50 million in Series C funding. Paladin Capital Group led the round and was joined by Goldman Sachs and ForgePoint Capital.

- RADAR, a New York-based in-store inventory tracking platform, raised $30 million in Series A funding. Align Ventures led the round and was joined by RX Ventures and others. 

- Simbe Robotics, a San Francisco-based A.I. and robotics company for inventory and operations purposes, raised $28 million in Series B funding led by Eclipse.

- MerQube, a San Francisco-based index-linked investing company, raised $22 million in Series B funding. Intel Capital led the round and was joined by Allianz Life Ventures, Citi, J.P. Morgan, Laurion Capital Management, and UBS. 

- Nomic AI, a New York-based A.I. explainability and accessibility company, raised $17 million in Series A funding. Coatue led the round and was joined by Contrary Capital, Betaworks Ventures, SV Angel, Story Ventures, Factorial Capital, and other angels. 

- Vendict, a Tel Aviv-based generative A.I. security and compliance startup, raised $9.5 million in seed funding. NFX, Disruptive AI, and Cardumen Capital invested in the round.

- ​​Infinite Canvas, a New York-based user-generated gaming studio-publisher, raised $6 million in seed funding. BITKRAFT led the round and was joined by HBSE, Warner Music Group, J Ventures, Lightshed, Day One Ventures, Emerson Collective, and Crossbeam.

- Bring It On, a Kiriyat Ono, Israel-based skill games developer, raised $4 million in seed funding. Acies Investments led the round and was joined by Kona Venture Partners, My.Games Venture Capital, Overwolf, Lalotte Ventures, and other angels. 

- Aktivate, a New York-based scholastic sports management software provider, raised $3.7 million Series A funding. Will Ventures, Tal Ventures, and Benson Oak Ventures co-led the round and were joined by 97212 and Tieferes Ventures.

- Attn: Grace, a Cambridge, Mass.-based personal care brand for women, raised $2 million in funding. For Later led the round and was joined by Flybridge, Kapor Capital, Portfolia, Ingeborg Investments, and Commonwealth.

PRIVATE EQUITY

- Integrated Media Company, a TPG platform, agreed to acquire Toon Boom, a Montreal-based animation software company, from Nelvana Limited for approximately $147.5 million CAD ($112.5 million). 

- GEM Manufacturing, a CORE Industrial Partners portfolio company, acquired Coining Manufacturing and Precision Machine Products, a Clifton, N.J.-based stamping and machining services provider. Financial terms were not disclosed. 

- Revelation Pharma, backed by Osceola Capital, acquired Eagle Pharmacy, a Hoover, Ala.-based pharmacy, and Lee Silsby Compounding Pharmacy, a Beachwood, Ohio-based pharmacy. Financial terms were not disclosed. 

EXITS

- CapVest Partners agreed to acquire Kerridge Commercial Systems, a Cary, N.C.-based ERP and business management software provider from Accel-KKR. Financial terms were not disclosed. 

- Gainsight, a Vista Equity Partners portfolio company, acquired Northpass, a Parsippany, N.J.-based digital customer education platform, from Edison Partners. Financial terms were not disclosed.

OTHER

- Exxon Mobil Corporation agreed to acquire Denbury, a Plano, Texas-based carbon capture, utilization and storage solutions and enhanced oil recovery company. The deal is valued at $4.9 billion.

- Entrata acquired Rent Dynamics, a Logan, Utah-based resident rent reporting and financial resources provider. Financial terms were not disclosed. 

FUNDS + FUNDS OF FUNDS

- Shore Capital Partners, a Chicago-based private equity firm, raised $643.1 million across two funds. The firm will invest $435.6 in microcap health care businesses and $207.5 million in aerospace and defense companies.

- Wing Venture Capital, a Palo Alto-based venture capital firm, raised $600 million for a fund focused on A.I. startups.

- Sheridan Capital Partners, a Chicago-based private equity firm, raised $575 million for a fund focused on lower middle-market companies within the health care industry. 

- Distributed Ventures, a Chicago- and New York-based venture capital firm, raised $100 million for a fund focused on early-stage investments across insurtech, healthtech, and fintech verticals.

PEOPLE

- CapitalG, Alphabet's San Francisco-based independent growth fund, promoted Stephanie Fuschetti to vice president and hired Bruno Aziza as an operating partner. Formerly, Aziza was with Google Cloud.

- Olympus Partners, a Stamford, Conn.-based private equity firm, promoted Sid Ahuja and George Swenson to vice president.