If Disney’s The Lion King is right, and the “Circle of Life” does indeed move us all, then that includes startups too.
As exciting as it is to launch a young startup, the heady hopes of success don’t always pan out. And in the demise of decaying startups, the opportunity for other startups is created. SimpleClosure, a startup that streamlines the shutdown process for dying startups, is the ultimate expression of this.
In September, SimpleClosure made headlines when it raised $1.5 million in pre-seed funding in about 24 hours without even having a pitch deck. Now, SimpleClosure has raised a $4 million seed round, led by Infinity Ventures, and including Anthemis Group and Foxe Capital, Fortune has exclusively learned.
One might see a morbid, even Tim Burton-esque quality to being a company that readily engages with failure and entrepreneurial death. But SimpleClosure CEO and cofounder Dori Yona, a three-time founder himself, has a different take on being a startup undertaker.
“I would argue that what we do isn’t sad, depressing, or negative,” he told Term Sheet. “It’s the exact opposite. We’re giving founders and stakeholders peace of mind, by letting them focus on what’s next, rather than living with the pain and labor that it takes to deal with this, and how it can drag along.”
Shutting down a startup is not as simple as one might think. There can be a lot of emotions involved, as well as interpersonal issues. Even without any bad blood among the founders, a shutdown is an inherently grueling and friction-filled process.
“The dirty secret of startups is that 90% fail, but the amount of time that anyone wants to spend on that problem is 0%,” said Ruth Foxe Blader, general partner at Foxe Capital.
SimpleClosure takes a process that on average lasts an agonizing nine to 12 months, and can trim it down to “days or weeks,” according to the company.
“It’s a surprising pain-in-the-ass to do and you end up having a lot of tail risk if you do it yourself,” said existing investor Rex Salisbury, Cambrian Ventures founder and general partner. And Salisbury would know—he’d previously closed down a company in a protracted three-year process. That’s partially what sold him on SimpleClosure, which has increased its revenue by 14 times since the company’s launch in September. Salisbury’s thinking about the company as ultimately having platform opportunities.
“They’ve been growing very quickly, and organically can start to…build on top of the shutdown engine, [with products] like tail insurance,” he said.
In a tough year for LPs, VCs, and founders, SimpleClosure is among a few firms looking to capitalize on the situation. Sunset, and Carta’s newly launched Conclusions product, also target the end-of-life startup market.
This year will likely involve more startup shutdowns than 2023, notes PitchBook analyst Kyle Stanford.
“While it’s not necessarily the market’s fault that these companies are going out of business, it is the market’s fault that there are so many venture-backed companies,” says Stanford. “From a venture investor’s standpoint, there’s only a certain number of companies that can generate these returns.”
For some startups at least, that’s not bad news. “The venture circle of life is real,” says Stanford.
Take Gilad Uziely, who had to shut down his previous fintech, Lance Global, six months ago. His SimpleClosure shutdown process took three weeks, he told me, and he’s already moved on to his next venture—in late January, Uziely’s new company Sequence announced they’d raised a $5.5 million seed round.
And that’s the circle of life. Sure, there’s birth and death, but there’s also starting over, knowing you can fail—and anyway, blinking, stepping into the sun.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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VENTURE DEALS
- Intenseye, a New York City-based provider of AI-powered workplace solutions, raised $64 million in Series B funding. Lightspeed Venture Partners led the round and was joined by existing investors Insight Partners, Point Nine, and Air Street Capital.
- Lapse, a London, U.K.-based photo-sharing app, raised $30 million in Series A funding. Greylock and DST Global Partners led the round and were joined by GV, Octopus Ventures, and angel investors.
- Helcim, a Calgary, Canada-based omni-channel payment processing platform for small businesses, raised $20 million in Series B funding. Headline led the round and was joined by Clocktower Ventures, Vesey Ventures, SilverCircle, and existing investors Information Venture Partners and Aquiline Technology Growth.
- Embat, a Madrid, Spain-based provider of digital treasury software designed for payment automation, automated accounting, and other services, raised $16 million in funding. Creandum led the round and was joined by existing investors Samaipata, 4Founders, Venture Friends, and others.
- Baseimmune, a London, U.K.-based company using AI to generate mutation-resistant vaccines, raised $11.3 million in Series A funding. MSD Global Health Innovation Fund and IQ Capital led the round and was joined by Hoxton Ventures, Creator Fund, Beast Ventures, and Maki.vc.
- FlowGPT, a Berkely, Calif.-based community platform for AI application creators, raised $10 million in pre-Series A funding. Goodwater led the round and was joined by existing investor DCM.
- Interview Kickstart, a Wilmington, Del.-based education platform and provider of AI, machine learning, data science, and other training programs, raised $10 million in funding from Blume Ventures.
- Pimberly, a Manchester, U.K.-based provider of product information management and digital asset management software, raised £4 million ($5.1 million) in funding from NPIF – Mercia Equity Finance.
- Chiral, a Zurichm, Switzerland-based developer of nanomaterials designed for chipmaking, raised $3.8 million in pre-seed funding. Founderful and HCVC led the round and were joined by ETH Zurich and Venture Kick.
- Myko, a Miami, Fla.-based conversational AI for sales and revenue team data, raised $2.7 million in seed funding from Khosla Ventures, Zero Knowledge Ventures, DayDream Ventures, and others.
- Enkrypt AI, a Boston, Mass.-based security and compliance services provider for generative AI integration, raised $2.4 million in seed funding. Boldcap led the round and was joined by Berkeley SkyDeck, Kubera VC, Arka VC, Veredas Partners, Builders Fund, and angel investors.
- Sonus Microsystems, a Vancouver, B.C.-based developer of ultrasound technology for healthcare, wearables, and industrial applications, raised $2.1M in pre-seed funding. LDV Capital led the round and was joined by angel investors and others.
- Vysioneer, a Boston, Mass.-based oncology AI company, raised $1.7 million in seed funding. Chaac Ventures led the round and was joined by Roger Ferguson Jr. and others.
PRIVATE EQUITY
- KKR agreed to acquire the End-User Computing Division of Broadcom (NASDAQ: AVGO), a San Jose, Calif.-based developer and manufacturer of semiconductor and infrastructure software products, for approximately $4 billion.
- Datasite, backed by CapVest Partners, acquired Sherpany, a Zurich, Switzerland-based board reporting and meeting management software provider. Financial terms were not disclosed.
- DCCM, a portfolio company of White Wolf Capital Group, acquired Chastain-Skillman, a Lakeland, Fla.-based provider of professional engineering and land surveying services. Financial terms were not disclosed.
- kSARIA Corporation, a portfolio company of Behrman Capital, acquired Charles E. Gillman Company, a Rio Rico, Ariz.-based manufacturer of high-reliability electrical cables and harnesses for military ground vehicles and other applications. Financial terms were not disclosed.
OTHER
- Stagwell (NASDAQ: STGW) agreed to acquire WHAT’S NEXT PARTNERS, a Paris, France-based digital brand and marketing consultancy. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- Verdane, an Oslo, Norway-based private equity firm, raised €1.1 billion ($1.2 billion) for its third fund focused on companies looking to digitalise and decarbonize economies in Europe.
- COTU Ventures, a Dubai-based venture capital firm, raised $54 million for its first fund focused on pre-seed and seed investments in the MENA region with a focus on UAE, KSA, and Egypt.
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