We’re coming on a year since the collapse of what was once venture capitalists’ favorite crypto exchange: FTX. And now, in just two weeks time, the criminal trial of infamous crypto founder Sam Bankman-Fried will commence in New York, where jurors will hear about the most spectacular startup collapse in history, and decide how much its founder, SBF, is to blame.
Bankman-Fried is being charged with seven counts of fraud and money laundering. He has pled not guilty on all counts and has been awaiting trial from the Metropolitan Detention Center in Brooklyn (no longer from his parents’ home on the Stanford University campus), after a judge revoked his bail in August on the grounds SBF was allegedly trying to tamper with witnesses.
We at Term Sheet plan to follow along, as the trial is set to have deep ramifications across the venture capital world. Not only are high-profile criminal cases against startup founders exceedingly rare, the FTX explosion has had massive reach—spanning political figures, Stanford University, and some of Silicon Valley’s most prominent investors. The explosion of FTX, once valued collectively at $40 billion between its U.S. and international operations, makes the demise of Theranos (worth $10 billion at its peak) look like peanuts. Not to mention, Theranos didn’t have many traditional venture investors, while FTX was one of the purest examples of a venture-built company gone wrong, throwing Sequoia Capital’s due diligence process and the glowing profile it had published on SBF into a rather harsh light.
My colleagues over at Fortune Crypto have been following this whole debacle rather closely (so much so that one of our crypto reporters, Ben Weiss, even built a Slack bot that automatically spits out alerts every time a new document is filed in Bankman-Fried’s criminal case file). As we get closer to the trial, I’ll be chatting with some of those colleagues, like Leo Schwartz, who plans to be a regular at the courthouse. If you want a daily play-by-play, I’d encourage you to sign up for Jeff John Roberts’ daily Fortune Crypto newsletter (you can do so here), and to subscribe to get all of Schwartz’s stories daily in your inbox here.
In the meantime, I pulled together some of the recent important happenings leading up to the SBF trial written by our Fortune Crypto team that you may have missed:
—In August, Judge Lewis Kaplan revoked SBF’s bail after the Justice Department accused Bankman-Fried of tampering with witnesses. That followed a New York Times story that published information from leaked private Google documents.
—Since Bankman-Fried arrived at the Metropolitan Detention Center, he has lost his unlimited access to lawyers, and he says that the spotty internet access has made it difficult to review millions of pages of electronic discovery that can be used in his case. His lawyers have argued that this has hindered his ability to prepare for his defense.
—Both the prosecution and defense will examine jurors for bias before the trial starts on Oct. 3. SBF’s lawyers are looking to screen for bias against crypto or effective altruism.
—Bankman-Fried is planning to have various expert witnesses come testify in the case, though SBF has said he only has $100,000 in his bank account. The bankruptcy estate for FTX has alleged that Bankman-Fried is using FTX customer funds to pay for his criminal defense bills.
—The Department of Justice is planning to use notes and to-do lists from SBF’s onetime girlfriend and former Alameda Research CEO Caroline Ellison in their case against Bankman-Fried.
KVYO hits the NYSE…Market automation startup Klaviyo, backed by Shopify, Accel, and Summit Partners, listed its shares on the New York Stock Exchange yesterday, rising 9.2% to $32.70 by market close. Just like Instacart, Klaviyo had priced its shares at $30 each prior to trading day, which valued the company at approximately $9 billion. Klaviyo was valued at $9.5 billion in 2021.
See you tomorrow,
Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.
VENTURE DEALS
- Corti, a Copenhagen, Denmark-based AI assistant for healthcare professionals, raised $60 million in Series B funding. Prosus Ventures and Atomico led the round and were joined by existing investors.
- MotherDuck, a Seattle, Wash-based data analytics platform, raised $52.5 million in Series B funding. Felicis led the round and was joined by a16z, Madrona, Amplify Partners, Altimeter, Redpoint, and Zero Prime.
- Vivante Health, a Chicago, Ill.-based digital health care platform specifically for patients with digestive conditions, raised $31 million in Series B funding. Mercato Ventures led the round and was joined by Health Catalyst Capital, 7wireVentures, Intermountain Ventures, Distributed Ventures, Human Capital, and SemperVirens.
- Inbound Health, a Minneapolis, Minn.-based platform that provides models for health systems to transition to at-home care, raised $30 million in Series B funding. HealthQuest Capital led the round and was joined by existing investors Flare Capital Partners and McKesson Ventures.
- Summus, a New York City-based platform that connects medical patients with specialists virtually, raised $19.5 million in funding. Danaher Corporation and Sator Grove Holdings led the round and were joined by others.
- Metaloop, a Graz, Austria-based marketplace that connects scrap metal suppliers with buyers, raised €16 million ($17 million) in Series A funding. FirstMark Capital led the round and was joined by Silence VC and existing investors Statkraft Ventures and FJ Labs.
- qbiq, a Tel Aviv, Israel-based platform that uses AI to visualize real estate space planning, raised $10 million in seed funding. JLL Spark Global Ventures led the round and was joined by 10D, Ocean Azul, Randomforest, and M-FUND.
- Medeloop, a Palo Alto, Calif.-based platform designed to make clinical research and trials faster through the use of AI, raised $8 million in seed funding. General Catalyst led the round and was joined by Maven Ventures, the Ovo Fund, NV Investments, and others
- Kayhan Space, a Boulder, Colo.-based company designing autonomous safety measures for satellites and spacecraft, raised $7 million in funding. EVE Atlas and Space Capital co-led the round and were joined by Initialized Capital, Overline Ventures, and Alumni Ventures.
- BoxPower, a Grass Valley, Calif.-based developer of solar panel microgrids, raised $6.5 million in Series A funding. Aligned Climate Capital led the round and was joined by SIG, Technexus, Remarkable Ventures, and Climate Capital.
- Authentic, a New York City-based platform that creates insurance companies for individual sellers, raised $5.5 million in seed funding. Slow Ventures led the round and was joined by Altai Ventures, MGV, Upper90, Clocktower, Commerce Ventures, Mischief Ventures, Core Innovation Capital, and others.
- HealNow, a New York City-based online payments platform for pharmacies, raised $5.5 million in seed funding. Bonfire Ventures led the round and were joined by Walkabout Ventures, Remarkable Ventures, Alabama Futures Fund, Impulsum Ventures, and others.
- Spectarium, an Oulu, Finland-based video game developer, raised €5 million ($5.3 million) in seed funding. BITKRAFT Ventures led the round and was joined by Delphi Digital and Framework Ventures.
PRIVATE EQUITY
- Capital D acquired a minority stake in Electrify Video Partners, a London, U.K.-based firm that acquires YouTube channels, for $85 million.
- Akeneo, backed by Summit Partners, acquired Unifai, a Paris, France-based AI-powered platform for data collection and categorization. Financial terms were not disclosed.
- Canstar, backed by Fulcrum Capital, acquired Universal Restoration Systems, a British Columbia, Canada-based property restoration service. Financial terms were not disclosed.
- Gemspring Capital Management acquired a majority stake in ClearCompany Holdings, a Boston, Mass.-based talent management platform to track applicants and existing employees. Financial terms were not disclosed.
- GHK Capital Partners acquired WSB, a Minneapolis, Minn.-based design, environmental consulting, and infrastructure services provider. Financial terms were not disclosed.
EXITS
- Blue Road Capital acquired NatureSweet, a San Antonio, Texas-based farmer of agricultural products, from Silver Ventures. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Goldman Sachs, a New York City-based investment bank, raised $14.2 billion in its ninth fund focused on the secondaries market.
- EJF Capital, an Arlington, Va.-based alternative asset management firm, raised $104 million in its first fund focused on financial technology companies.
PEOPLE
- Tiger Capital Partners, a London, U.K.-based venture capital firm, hired Jeanette Gorgas and Sean Dolan as operating partners. Formerly, Gorgas was with Grant Thornton and Dolan was with Alinda Capital Partners.
Correction: The online version of yesterday’s newsletter has been corrected to reflect that Darrow raised $35 million in Series B funding, not $25 million. We regret the error.
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