Porsche is testing out a new venture strategy. Here’s how it works

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“There’s this thing called innovator’s dilemma that most big corporates face,” Ulrich Thiem, managing director of Porsche Ventures, said in a pre-recorded video presented at the UP.Summit, a mobility conference that took place earlier this week in Bentonville, Ark. Thiem was alluding to Clayton Christensen’s seminal 1997 book that describes the challenges established businesses face in embracing disruptive, new ideas—and the perils that befall corporations that ignore innovation.

That’s why Porsche and its venture arm are trying something new. The automaker said this week it’s going to be the first corporate to work with UP.Labs, a newly-minted affiliate of the Cathie Wood-backed venture capital firm UP.Partners, which will build startups that Porsche will have the option to acquire in three years’ time.

Here’s how it works: 

1. UP.Labs pinpoints several key areas of focus within the company (In the case of Porsche, that entails car data, the supply chain, and improving customer experience in the car dealership, John Kuolt, CEO of UP.Labs tells me). 
2. Somewhat similar to a startup studio, UP.Labs will then launch six startups in three years that will be backed by UP.Partners, Porsche Ventures, and potentially additional investors, in an approximately $5 million seed round led by UP.Partners (corporate partners won’t be allowed to invest more than their pro rata—around 20-25%). Approximately 25% of the startup’s equity will be reserved for the CEO UP.Labs will recruit to run the startup and its initial employees. 
3. After a three-year period, Porsche will have the option to acquire each business.

UP.Labs hopes it will be able to attract proven startup execs who are looking for guaranteed funding and a quick exit. “One of the biggest problems for entrepreneurs right now is… It’s like a 10-year slog,” Kuolt says of the traditional VC-backed startup process. For LPs, he says, returns can take 13 years to pan out. But it’s likely that the new UP.Labs model may turn off the slew of founders who’d prefer to steer clear of a big corporation and build out their startup independently over the long haul.  

The partnership between Porsche and UP.Labs has been in the works for approximately two years, according to Thiem. UP.Labs, which plans to launch the first two companies by the end of this year, has brought on around 20 people for its team, including a few (including Kuolt) who were formerly with the venture arm of Boston Consulting Group. Kuolt says they have finalized a partnership with another corporation, but declined to specify who it was.

It’s a new model—and an alternate approach in a sea of accelerator programs, startup studios, incubation labs, and CVC strategies as corporates try to maintain relevance and stay ahead of the curve. In three years time, we’ll get some sort of indication of whether it works.

Until Monday,

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

– Agilitas Energy, a Wakefield, Mass.-based renewables and energy storage company, raised $350 million in funding from CarVal Investors. 

– Branch, a Columbus, Ohio-based home, auto, and umbrella insurance provider, raised $147 million in Series C funding. Weatherford Capital led the round and was joined by investors including Acrew, AmFam Ventures, Anthemis, Gaingels, Greycroft, HSCM Ventures, Narya, SignalFire, and Tower IV.

– Backbase, an Amsterdam-based engagement banking platform, raised €120 million ($127.9 million) in funding from Motive Partners.

– Tessa Therapeutics, a Singapore-based clinical-stage cell therapy company, raised $126 million in Series A funding. Polaris Partners led the round and was joined by investors including Temasek, EDBI, Heliconia Capital, and Heritas Capital. 

– Klar, a Mexico City-based digital financial services platform, raised $90 million in funding. General Atlantic led the round and was joined by investors including Prosus Ventures, Quona, Mouro, IFC, Acrew, WTI, and Endeavor Catalyst. 

– Shield AI, a San Diego-based defense technology company building A.I. pilots for aircraft, raised $90 million in Series E funding. Snowpoint Ventures’ Doug Philippone led the round and was joined by investors including Riot Ventures, Disruptive, and Homebrew. 

– Ancora Biotech, a Newark, Calif.-based biotherapeutics developer for B cell cancers, metabolic diseases, and chronic Hepatitis B infections, raised $60 million in Series A funding co-led by Lightspeed Venture Partners and SR One.

– Middesk, a San Francisco-based identity platform for business verification and underwriting decisions, raised $57 million in Series B funding. Insight Partners and Canapi Ventures led the round and were joined by investors including Sequoia, Accel, and Gaingels. 

– OhmConnect, an Oakland-based residential energy flexibility provider, raised $55 million in Series D funding. ClearSky, Sidewalk Infrastructure Partners, and TELUS Ventures led the round and were joined by investors including Carrier and SunPower. 

– LibLab, a remote-based SDK (software development kit)-as-a-Service platform for engineering teams, raised $42 million in Series A funding. Insight Partners led the round and was joined by investors including Zeev Ventures, Stepstone, Sheva, and Rainfall. 

– Maze, a remote-based product research platform, raised $40 million in Series B funding. Felicis’ Victoria Treyger led the round and was joined by investors including Emergence, Amplify, Partech, Seedcamp, Atlassian Ventures, Zoom Video Communications, HubSpot Ventures, and other angels.  

– Nava Benefits, a New York-based employee benefits brokerage platform, raised $40 million in Series B funding. Thrive Capital led the round and was joined by investors including Avid Ventures, Quiet Capital, Sound Ventures, GV, K5 Ventures, Homebrew, and others.  

– Fruitful, a New York-based financial wellness membership platform, raised $33 million in a funding round. Emigrant Bank and 8VC led the round and were joined by investors including Lux Capital, Founders Fund, Elad Gil, Company Ventures, Third Prime, Bienville Capital, and other angels. 

– Euler, a London-based Ethereum-based protocol for users to lend and borrow crypto assets, raised $32 million in funding. Haun Ventures led the round and was joined by investors including Variant, FTX Ventures, Coinbase Ventures, Jump Crypto, Jane Street, and Uniswap Labs Ventures.

– Trovata, a Solana Beach, Calif.-based open banking platform, raised $27 million in Series B funding co-led by Fin Capital and J.P. Morgan Chase Strategic Investments.

– H1, a New York-based health care data analytics platform, raised $23 million in a Series C extension funding round. Goldman Sachs Asset Management, Menlo Ventures, Transformation Capital, and Novartis Pharma AG invested in the round. 

– Onfleet, a San Francisco-based delivery management software platform, raised $23 million in Series B funding. Kayne Partners led the round and was joined by Savant Growth. 

– CareAcademy, a Boston-based care enablement platform for home care and home health organizations, raised $20 million in funding. Goldman Sachs Asset Management led the round and was joined by investors including MassMutual through the MM Catalyst Fund, Impact America Fund, Rethink Education, Unseen Capital, First Trust Capital Partners, and others. 

– Sensel, a Sunnyvale, Calif.-based touch and force-sensing company, raised $18.8 million in Series B funding. Global Lighting Technologies led the round and was joined by Lenovo.

– Floor, a New York-based NFT accessibility app, raised $8 million in funding. 6th Man Ventures led the round and was joined by investors including Hannah Grey VC, B Capital, Worklife Ventures, Collab+Currency, Exponent Capital, Eberg, and other angels.

– Strella Biotechnology, a Seattle-based produce sensor technology developer for food waste reduction, raised $8 million in Series A funding. Millennium New Horizons led the round and was joined by investors including Google Ventures, Rich Products Ventures, Mark Cuban, Yamaha Motor Ventures, Catapult Ventures, and Union Labs.

– Tatsumeeko, a Singapore-based fantasy online game, raised $7.5 million in seed funding. Delphi Ventures, BITKRAFT Ventures, and DeFiance Capital led the round and were joined by investors including Binance Labs, Animoca Brands, Dialectic, GuildFi, and others.

– Ancient8, a Vietnam-based GameFi infrastructure developer and blockchain gaming community, raised $6 million in a funding round through a token sale. Makers Fund and C² Ventures led the round and were joined by investors including Pantera Capital, 6th Man Ventures, IOSG Ventures, Folius Ventures, Morningstar Ventures, Th3ia Capital, Sky9 Capital, Play Ventures, and others.

– Request Finance, a remote-based crypto payments startup, raised $5.5 million in seed funding. Animoca Brands, Balderton Capital, and XAnge invested in the round.  

– Front, a San Francisco-based investment management app, raised an additional $5.5 million in seed funding. Streamlined VC led the round and was joined by investors including WndrCo, Rembrandt VC, B3 Capital, CapitalX, Stonks, and others. 

– Proper Finance, a San Francisco-based financial reconciliation and ledger data platform, raised $4.3 million in seed funding. Redpoint Ventures led the round and was joined by investors including BoxGroup, Mischief, Y Combinator, and others.

– Gander, a San Francisco-based user-generated video content platform for online brands, raised $4.2 million in a seed funding round. Harlem Capital and Crossbeam Venture Partners led the round and were joined by Boon Fund. and a collection of venture scouts and angels.

– Titan Casket, a Boston-based D2C casket company, raised $3.5 million in seed funding led by Reformation Partners. 

PRIVATE EQUITY

– DigiCert, backed by Clearlake Capital Group, Crosspoint Capital Partners, and TA Associates, acquired DNS Made Easy, a Reston, Va.-based software security platform. Financial terms were not disclosed. 

– Lovell Minnick Partners acquired a majority stake in London & Capital, a London-based wealth and asset manager. London & Capital will retain a significant minority stake. Financial terms were not disclosed.

– Made4net, backed by Thompson Street Capital Partners, acquired Zethcon, a Lombard, Ill.-based warehouse management systems software provider. Financial terms were not disclosed. 

– Mercer Global Advisors, backed by Oak Hill Capital and Genstar Capital, acquired Bivin and Associates, a Ponca City, Okla.-based wealth management firm. Financial terms were not disclosed. 

– Physical Rehabilitation Network, a portfolio company of Gryphon Investors, acquired Gillette Physical Therapy, a Gillette, Wyo.-based physical therapy provider for orthopedic-related conditions. Financial terms were not disclosed. 

– Zywave, backed by Clearlake Capital Group and Aurora Capital, Strategic Insurance Software, a Columbus, Ohio-based agency management systems and customer relationship management solutions provider for P&C insurance agencies. Financial terms were not disclosed.

EXITS

– Gridiron Capital acquired Vistage Partners, a San Diego-based CEO coaching company, from Providence Equity Partners. Financial terms were not disclosed. 

OTHER

– BD acquired Parata Systems, a Durham, N.C.-based pharmacy automation solutions company for $1.525 billion. 

– Blancco Technology Group acquired WipeDrive, a Pleasant Grove, Utah-based data erasure software solutions provider. Financial terms were not disclosed.

– Redwood Services acquired a majority stake in Service Plus, an Indianapolis-based residential HVAC and plumbing services provider, and Plumbing Medic, a Gilbert, Ariz.-based residential plumbing and sewer services provider. Both companies will retain a minority stake in the business. Financial terms were not disclosed. 

IPOS 

– Soulgate, a Shanghai-based social networking app Soul developer, withdrew its plans for an IPO. The company had planned to raise $185 million through the sale of 13.2 million shares priced between $13 to $15. Tencent Holdings backs the company. 

SPAC

– Polestar, a Gothenburg, Sweden-based electric performance car manufacturer, plans to go public via merger with Gores Guggenheim SPAC. A deal is valued at $20 billion. Volvo backs the company.  

FUNDS + FUNDS OF FUNDS

– The General Partnership, a San Francisco-based venture capital firm, raised $240 million for a fund focused on founders from the early stage to growth stage. 

– Closed Loop Partners, a New York-based investment firm, raised $200 million for a fund focused on businesses that keep packaging, organics, electronics, and apparel out of landfills.

– Arrington Capital, a Miami-based investment firm, raised $100 million for a fund with the Moonbeam Foundation, a Singapore-based Polkadot contract platform, focused on projects on the Moonbeam network. 

– Solana Ventures, the San Francisco-based venture arm of Solana, and Solana Foundation, the Zug, Switzerland-based non-profit arm of Solana, allocated $100 million to game studios, gamefi, NFTs, and DeFi projects in Korea. 

PEOPLE

– Partners Group, a Zug, Switzerland-based private investment manager, hired Ben Brier as partner and head of the U.S. private equity health and life team. Formerly, he was with Kindred Healthcare.

– White Star Capital, a New York-based venture capital firm, promoted Cristina Ventura to general partner and chief catalyst officer and Joe Quinn Wei to general partner. Formerly, Ventura was with Apple and Wei was with Deutsche Bank.