Megarounds of $100 million or more have become scarce in the Bay Area of late, but a pair of them are reportedly in the works.
The deals would involve a pair of artificial intelligence startups — Anthropic Inc. and Character Technologies Inc. Anthropic is in talks to raise $300 million, The New York Times reported Monday. Character Technologies is negotiating a $250 million round, according to The Information on Friday.
The deal for San Francisco-based Anthropic would come about 10 months after it raised $580 million in a Series B round led by former FTX Ltd. CEO Sam Bankman-Fried. Because FTX is now in bankruptcy and Bankman-Fried has been accused of stealing customer funds to make investments such as in Anthropic, the AI startup faces the possibility of having to return his investment.
Anthropic is an AI research outfit founded by former OpenAI LLC employees. It's developed a chatbot rival to OpenAI's ChatGPT that's designed to be more attuned to safety and legal issues than its competitor.
Founded by former researchers at Google LLC, Character Technologies is also working on chatbots. Its technology allows people to virtually interact with a computerized simulation of anyone they want, real or fictional, from Donald Trump to Donald Duck.
The two pending deals in the AI space follow the announcement earlier this month that Microsoft Corp. will invest $10 billion over 10 years in San Francisco-based Open AI.
Including that deal, there have been just five Bay Area fundings announced thus far this month of $100 million or more. By contrast, in last January there were 26.
That drop-off is a continuation of a trend that began last year. In the fourth quarter, the Bay Area recorded just 14 megarounds. That was not only the lowest tally for $100 million deals in the region in any quarter in five years, it was down from a record total of 80 in last year's first quarter.
Here's more Bay Area venture and startup news at the start of a new week:
Fundings
- Alto Neuroscience Inc., Los Altos, $25 million: Alpha Wave Ventures invested in the extension of a Series B deal for this developer of psychiatry drugs, raising the total amount it raised in the round to $60 million. K2 HealthVentures also provided a $35 million credit line.
- Prisms of Reality Inc. (dba Prisms VR), San Francisco, $12.5 million: Andreessen Horowitz led the Series A round for this provider of virtual reality software designed to teach math.
SPACs
- Cheche Technology Inc. announced plans to go public through a merger with Prime Impact Acquisition I. Based in San Jose and led by former Western Digital Corp. executives, Prime Impact has just $68 million left from the $300 million it raised in its 2020 initial public offering. That's because in September, when the special purpose acquisition company's shareholders voted to give it more time to complete a merger, they also asked for refunds on the vast majority of its shares (NYSE:PIAI). Based in China, Cheche is a provider of an auto insurance search engine. Post-merger, the companies plan to have their shares trade on the Nasdaq under the symbol CCG.
IPOs
- Structure Therapeutics Inc. set terms on Monday for an initial public offering in which it hopes to raise up to $134.25 million. The South San Francisco biopharmaceutical company is developing oral therapeutics plans to sell 8.95 million American depositary shares for between $13 and $15 which each have three ordinary shares of its stock. It plans to list on Nasdaq with the ticker symbol of GPCR.
Funders in the news
- CRV promoted Caitlin Bolnick Rellas to general partner. Rellas joined the venture firm, which has offices in Palo Alto and San Francisco, as a principal in 2021.
