E13: Inside VC Deals - Steve Wozniak's Privateer ($56.5m), Meati Foods ($100m) + 6 more

I'm Matt Joseph, and this is the Superconnector Podcast. We are diving into eight of the most interesting venture capital deals in the last week. We have a lot of industries to cover. Let's jump into it.

First up, Privateer, a space data startup co founded by Apple co founder Steve Wozniak, has raised 56 and a half million dollars in a Series A round.

Privateer has also acquired Orbital Insight, which is a startup which has raised over 150 million already.

So the idea behind Privateer is pretty simple. There is a ton of debris in space, and it's not easy for satellites to avoid all of that debris.

Especially now, as the number of satellites launched into space increases, there's going to be even more objects floating around our planet. So what those satellite companies need is a way to avoid all of the debris that's floating around.

The involvement of Steve Wozniak in this startup is part of what makes it so interesting.

Steve Wozniak is kind of this reclusive guy who's known as the technical half to Steve Jobs. the brains of the operation, at least in theory, was Steve Wozniak.

It's not totally clear how involved Steve Wozniak is in this startup.

Sometimes in these situations, you'll have a guy who's a big, well known wealthy guy who's involved with a startup, but doesn't actually do very much. But it would continue a trend of famous founders

from other industries who have come into the space industry, including guys like Elon Musk and Jeff Bezos.

Now the acquisition of Orbital Insight seems to be driven at least in part by the fact that it's really tough to make money in the so called space situational awareness business. Here's what the article said.

Privateer's acquisition will expand its offerings after revenue prospects in the space situational awareness market were limited, Fielding said. SSA is a nascent corner of the space industry akin to air traffic control, but for satellites in space. Such services are deemed crucial for satellite navigation given there are no international norms to control a soaring amount of traffic in space.

So there's a little bit of inside baseball going on with this acquisition that I think is pretty funny. When a startup that has raised 130 million gets acquired by a startup that's raised 56 million and there are no terms that are announced, it tells you that it wasn't acquired at a very large valuation. Every time a startup that's raised a lot of money gets acquired, they generally want to scream to the hills how much they were bought for because it signals strength. It signals for investors and the founders and the team members that they had a great outcome. When they hide the terms, it's often because the terms weren't very good.

Now, one of the interesting parts of the startup is the backstory of how Steve Wozniak got tied up with the current CEO and co founder Alex Fielding. Here's what Fielding's Wikipedia page says.

Alex Fielding started his career as an engineer at Cisco systems and Apple computer. He co founded wheels of Zeus with Apple's co founder, Steve Wozniak in 2001 and it was sold to Zontrack in 2006.

So Steve and Alex are former coworkers and colleagues. They worked together at Apple and then they started another company together that got acquired and then years and years later 15 years later They get together and they cook up a space company.

Even though the article says that there's not very much money to be made in the, SSA space situational awareness market, we actually covered a YC startup

called basalt tech that is focused on this exact problem. Now, basalt tech was billing themselves as windows for satellites.

This is a little bit different, but with Steve Wozniak involved and all of the capital that he has available to him. I think they're going to have a long runway to figure this out.

Up next Meati Foods has raised $100 million to expand its mushroom based alternative proteins to even more retail locations.

Meati makes cutlets and steaks from mycelium, which is mushroom root. Now the CEO made a statement to TechCrunch as part of this round.

Let's jump into that.

It's truly a next generation revolutionary protein, CEO Phil Graves told TechCrunch. It's a product that's rooted in nature. It's not genetically modified. We just take something from nature, channel it, give it nutrients and minerals that it needs to flourish. We then get the equivalent of hundreds of cows worth of protein in four or five days time.

It's a fascinating story to jump into, not just because of what they're doing with mushrooms, but also because they had a big leadership transition. The CEO actually stepped down and was replaced by the CFO in this transaction as well. Now for some details on that transition.

This new funding comes three months after Meati foods laid off 13 percent of its employees. At the same time, company co founder Tyler Huggins stepped down as CEO to transition into the role of chief innovation officer. That's when Graves, the company's chief financial officer at the time, took the helm. Following this latest round, Huggins, who started the company with Justin Whitely, will transition into an advisory role.

So this has the feel of a messy transition where maybe the founding CEO stayed for too long. He hung around in this chief innovation officer role because he didn't want to give up his baby. But then realized after a few months in that role that he couldn't stick around as anything but CEO. This is actually very common in late stage startups because founders at every stage have to transition to what is effectively a different job. And after doing that three, four, five, six times, sometimes, especially when you're preparing for an IPO, it's better to bring in somebody who has a little bit more experience and a little bit more fire in the belly.

Huggins is somewhat of a serial founder, but none of his other companies have gotten to the scale that Meati has gotten to. He also worked as a research bioengineer for the U S department of defense. So he's got his hands in a lot of different pots here.

His replacement, Phil Graves is more of a seasoned executive. Here's what Phil's LinkedIn says.

Prior to joining Meati, Phil was CEO of Wild Idea, a regenerative buffalo meat and leather company, and a VP at Patagonia, where he ran global corporate development and founded and managed the corporate venture capital fund called Tinshed Ventures, and Patagonia's resale business called Worn Wear.

He also served as Chief Sustainability Officer for Bass Pro Shops and Cabela's, and as board member for Bureo and Mango Materials Inc.

So what all this tells you is that they brought in Phil Graves to be the adult in the room and ultimately most likely to take the company public or to find an acquirer.

Now, the alternative protein market has had a bit of a rough go as companies like

Beyond Meat and Impossible Foods have seen a pretty significant drop in their valuations over the last few years. But Meati is doing something very different with its technology.

It's using mushrooms to create alternative proteins, which is a pretty novel approach and I think they have a great shot to succeed, maybe where some of the other companies have not.

Up next, Karius has raised 100 million to expand its blood testing service for infectious diseases.

Now, anytime we hear about blood testing, we have to think a little bit about Theranos. But Karius appears to be in a much stronger position than Theranos was ever in, frankly.

Here's what the article says, The infectious disease diagnostic developer, Karius, has secured another 100 million to help expand the reach of its microbial DNA test designed to detect more than 1, 000 different pathogens from a single blood sample.

Now we've probably all heard that line at this point from Elizabeth Holmes,

the former disgraced CEO of Theranos, who said that her blood test could detect it all kinds of conditions just from a single drop. We have similar language here, but it's actually tied to performance.

According to the article, it's currently being employed by about 400 locations and more than 6, 000 physicians, largely cancer centers, where patients can carry heightened risks to bacteria, fungi, parasites, and viruses. Karius estimates that about 60 percent of deaths among people with cancer can be attributed to infections instead of the malignancy itself.

That is an eye watering number of deaths. that are being caused not by cancer, but by infections in cancer patients. Now, when you get cancer, your immune system declines, and so that's presumably what's causing all these patients to die. But if their blood testing solution can help with that, it can save lots and lots of lives.

Now, Karius is led by this guy, Alec Ford.Alec was a long time biotech executive, including sitting on the board of the giant biotech company Novartis, and serving as the chief operating officer for Myriad Genetics where he worked for 10 years. Here's what Ford had to say about taking over as the CEO of Karius in 2020.

My journey to Karius was driven by professional and personal experiences. On a personal level, my family's encounters with severe infections, including a challenging period for my daughter and the loss of my sister to an infection following cancer.

I found the focus at Karius on infectious disease and genomics Compelling an opportunity to make a real impact.

Now, the blood testing market is not exactly a growth market, and it is dominated by some very large companies. This is precisely the issue that Theranos ran into when it released its blood testing service.

In 2024, it was a 90 billion market and by 2029, it's projected to be 126 billion market. So that's a compound annual growth rate of about 6. 8%.

Now, the industry is led by companies like BioRad, Danaher, and Abbott. These are behemoths. And it's an industry where, as a consumer, you might never actually run into them.

But what Karius is doing is differentiating itself by focusing on infectious diseases in these locations where patients are most likely to get them.

Every time I see a startup that's saving lives, I want to cover it. I love what these guys are trying to do. No one wants to lose a relative, not just to cancer, but to an infection they contracted simply because they're immunocompromised. It's a problem that we ought to want to fix. Karius, congratulations on the funding and I really hope that you succeed.

Up next, Neurable has raised 13 million dollars for its non invasive brain computer interface. Now, I feel like we are in a sci fi novel right now.

Non invasive means that unlike Neuralink, the famous company founded by Elon Musk, they don't actually have to do surgery to get this thing to work. Interestingly enough, the technology they're actually showcasing works through headphones. Here's what the article says,

Neurable develops easy to use neuro technology, including the soon to launch AI powered MW75 neuro headphones. The company wants to use the funding to continue expanding the build of its platform and provide non invasive BCI, that's brain computer interface, to consumer audiences.

So the key to this technology is they found a way to shrink the devices that you need to monitor brainwaves. So that's EEG technology. We're not going to dive too deeply into that because it's pretty complicated stuff. But trust me, this is fascinating because traditionally, if you wanted to measure someone's brainwaves, you'd have to use some really big equipment.

They're taking that equipment and they're putting it into household consumer electronics devices. That's absolutely incredible. And they call that out in the article.

Here's what it says. Neurable partnered with consumer wearable companies, including headphone company Master and Dynamic. It wants to embed EEG sensors into everyday technologies with plans to introduce the first ever BCI enabled headphones.

The company expects to launch this summer.

Now I can't talk about this company without talking about its founder and CEO. This guy has the most interesting LinkedIn photo I think I've ever seen. It is a photo of him, and he's got this long flowing hair, holding a dog. Not exactly the guy I would think would be founding a company like this, but it is hilarious. So here he is. Dr. Ramsey's Alcade. And we actually have a video of him discussing his technology. Here we go.

It's Dr. Ramses Alkaid. I'm the CEO of Nurble, and what our company works on is brain computer interfaces, which is just the way of saying that we were able to take brain data and use that to control different devices. Specifically, we use our technology to bring into everyday systems. So imagine headphones, earbuds, or even augmented reality glasses that leverage your brain either for control or for understanding your cognitive awareness. Nurble's core is really about artificial intelligence. What we do is we developed a technique that combines advanced filtration systems and artificial intelligence to boost the signal of brain data.

That is fascinating. And I love that somehow this became an AI pitch. Everything is an AI pitch these days, but it really is pretty cool technology.

Now, the reason Ramses is running this company is because he was a neuroscience PhD at the University of Michigan, and he clearly learned a lot from that experience, and he's now applying it in a way that's really interesting.

$13 million isn't a ton of funding these days, particularly for a startup that's doing something as complex as what Neurable is doing, but they have real commercial agreements in place.

And I think they're on the right track.

Up next, Nivoda's raised 30 million for its B2B diamond marketplace. So that means Nivoda is selling diamonds to retailers.

You can imagine a retail store that needs to get diamonds. Nivoda is who they go to. And we actually have a statement from David Sutton, who's the CEO of Nivoda.

You may have heard the phrase conflict diamond or blood diamond, which was the name of a popular movie with Leonardo DiCaprio. Here's a quick explanation on what that even is.

The United Nations defines conflict diamonds as diamonds that originate from areas controlled by forces or factions opposed to legitimate and internationally recognized governments and are used to fund military action in opposition to those governments or in contravention of the, decisions of the Security Council.

So practically what's going on is that there are these massive mines in these war torn countries that are being used to fuel more wars. And that's caused a lot of diamond consumers to stop consuming diamonds.

Nivoda is actually out in front of this issue though. They're using something called The Kimberly process, which is essentially a method to try to eliminate conflict diamonds from global trade. Here's what they say on their website.

The Kimberly process is a joint government industry and civil society initiative whose objective it is to stop the flow of conflict diamonds. The Kimberley process has been successful in curbing the flow of conflict diamonds with 99. 8 percent of the global supply of rough diamonds estimated to be conflict free by the World Diamond Council. Nivoda only works with manufacturers who adhere to those guidelines.

Nivoda is running a playbook that was actually very popular in the late 2000s to the early 2010s, which is essentially to create a B2B marketplace that is managed by technology. That instead of using Excel spreadsheets and phone calls to do deals, you can just go on a website and get everything that you need. Their mission is essentially to become the number one B2B marketplace for jewelry in the world. And with 30 million they're well on their way.

Up next, Zanskar has raised 30 million dollars to find and commercialize geothermal energy.

Geothermal energy comes from heat within the earth. It's considered clean energy just like wind or solar. Zanskar is actually one of the leaders now in geothermal energy. Here's what the article says.

Public accomplishments include winning multiple contracts with the United States Department of Defense's Defense Innovation Unit to explore new geothermal resources and advance their mission of energy resilience.

In addition, its field data collection program collects more low cost, early stage field data every three months than what industry and academia combined did over the prior 10 years.

If that's true, and geothermal electricity becomes one of the dominant energy forms that we use, that'll be one of the best applications of AI that we have ever seen, maybe the best application. But make no mistake, this is a moonshot. They are a long way away from commercializing what looks to be research in identifying locations that might be capable of producing geothermal energy.

Sometimes people wonder why companies like this get funded. and the reason is that venture capitalists look for moonshots. They're looking for those deals where they are contrary and they are correct, where they are moving in a direction that's different than the rest of the industry and they're right about it. So even if there's a small percentage chance of geothermal energy becoming a dominant source of electricity, if they are correct, it will be a phenomenal investment because this company was first to market.

So Zanskar was founded by this guy, Carl Hoiland. He got a PhD from Stanford in the school of earth, energy, and environmental sciences.

His co founder, Joel Edwards, who's the CTO, also got a PhD in Earth Science from UC Santa Cruz.

So what you have are a couple of PhDs who have raised a whole lot of money to try to uncover geothermal energy. I doubt they've figured out how to commercialize any of this yet beyond the research and the data that they are collecting. But if they're right about geothermal energy and It's the most abundant source of energy on earth, then I hope that they succeed in finding it and commercializing it. It's a really cool idea.

Up next, Insempra has raised 20 million dollars to make eco friendly Lipids.

Lipids are basically types of fats, oils, and waxes that show up in lots of daily products. things like makeup, food, and even in clothes as well. Now, lipids are generally made from things that are really terrible for the planet, like petrochemicals, which come from oil. But what I find so interesting about this startup is the way that they are going about producing these lipids. They're using yeast. Here's what the CEO had to say.

Lipids typically are either extracted from nature, you harvest the plant, or you can produce them petrochemically. We use, so-called oil yeast, and these oil yeasts are put under certain conditions in our steel vessels under certain metabolic situations.

Then they produce lipid oils, which we can extract later on, and which we can sell into the cosmetics and into the food industry.

So in other words, Insempra's tanks grow yeast in a way that allows them to produce lipids. And then, they sell these lipids into various industries that need them. So you can imagine, if you've ever looked at a food label, that crazy list of ingredients on the back. They're trying to make some of those ingredients a little bit more eco friendly.

Insempra was founded by this guy, Jens Klein. Now Jens was previously the CEO of a company called AM Silk. Here's the description of that company.

AM Silk is a front runner in advanced biomaterials made from spider silk based proteins.

That is nothing short of fascinating. He seems like he's pretty well positioned to run Insempra and I think these guys are onto something really interesting here.

Up next, Xona has raised $19 million to build an alternative to GPS, that's much more accurate. Here's what the article says. For decades, the Global Positioning System, GPS, has maintained a de facto monopoly on positioning, navigation, and timing because it's cheap and already integrated into billions of devices around the world.

Xona thinks a more accurate system will be necessary to scale autonomous vehicles, advanced robotics, and other technologies for The 21st century.

The startup plans to launch a satellite constellation in low earth orbit that would act as a commercial GPS alternative. Called Pulsar, the network could potentially cost less to operate while offering more accurate geolocation data.

So the founding story here is actually really interesting. Seven grad students from Stanford came together to found this company. I don't think I've ever seen a company with that many co founders. For most tech startups. I would say that that's a red flag, but when you're dealing with space, it's an entirely different story.

I mean, we covered a space company that had five co founders in YC but the problem, and I will keep harping on this, is that when you have seven co founders nobody's really getting that much equity.

So they're incentivized, but they're not that incentivized. And when you raise lots of rounds of funding and you get diluted, many of those co founders are no longer incentivized to stick with the company.

Part of what I really like about this startup is how efficiently that they're approaching this problem. Here's what the article had to say.

Xona's approach is certainly more SpaceX than Boeing. The 31 satellites that currently provide GPS are all exquisite, ultra expensive, and synchronized with nanosecond precision using massive onboard atomic clocks.

In contrast, Xona's Pulsar service is built on a patented cloud architecture for atomic clocks. It will dramatically drive down the cost of each satellite, but still provide orders of magnitude higher levels of accuracy. Think an accuracy of several centimeters rather than meters.

So the question is why do we need this much more accuracy when you have a system like GPS that's so universal?And here's what the company y says.

Many vehicles today that integrate autonomous features use a combination of technologies, like cameras, LIDAR sensors, and radar sensors to navigate. But Xona's CEO, Brian Manning, said that while these sensors work in structured environments, like cities, their efficacy is degraded in unstructured environments, like the middle of a desert.

Fortunately, being unimpeded by buildings and other features, GPS tends to work well in those places.

So I think the general idea here is that you're gonna make lots of devices much safer for the purpose of navigation if you improve the system that they're built on.

But there's a giant business challenge here, and that's that GPS is free. Companies can get it without having to pay. Xona is going to have to charge for its systems. And that means that they're going to have to prove out exactly why some of these new age autonomous vehicles and other types of robots need more accuracy. Now, one of the use cases they brought up is outages.

What happens if the GPS system goes under for some reason? Well, you'd probably really want to have a system like Xona sitting there. and I think that's actually pretty compelling.

Xona was founded by this guy, Brian Manning. He got his master's in aerospace from Stanford, and he worked at SpaceX. So he's got some really good brands on his resume.

He seems like somebody who understands the direction that he needs to take the company. And they actually already have some pretty interesting commercial contracts. Here's what Space News had to say about it.

Xona has won military research contracts from the U. S. Air Force. And on their cap table is Lockheed Martin, the defense contractor.

A research contract isn't exactly the same thing as a commercial contract, so these guys have a long way to go.

But with 19 million, they're going to have a little bit more time to figure out exactly how to build and commercialize the systems that they have in mind.

and that is it. Eight fascinating companies coming out of the world of venture capital. I hope more companies like this get funded. Thank you for listening, thank you for watching, and we'll see you again soon.