Venture Capital‘s Two Worlds: chainguard’s $500 Million and teh Battle for Term Sheets

if you want a pulse check on where the venture capital industry is at, consider the software supply chain security startup Chainguard, which has raised $500 million across two rounds in less than a year. 

“We’ve never had a fundraising deck,” ryan Carlson, president of Chainguard, said yesterday on the Future of Venture Capital insight exchange at fortune’s Brainstorm Tech conference in Park City, Utah. He added later: “We’re not going to create a deck next time either.”

For some companies, deals can’t get done fast enough.OpenAI is reportedly worth some $500 billion these days and raised $40 billion in funding earlier this year. Autonomous weapons startup Anduril notched a $30.5 billion valuation earlier this year, less than a year after its last multi-billion funding round. If you are looking at companies in the cybersecurity, generative AI, and defense tech space, deals are hot. But it’s not everyone. 

“Some companies, no matter what you’re doing, you’re not getting any term sheets,” says Aydin Senkut of Felicis Ventures. “And the ones that are getting interest are getting, like, 12, 15-I mean, they’re double digits.And I’ve been in this business for 20 years, and I’m trying to remember the last time when there were double-digit term sheets for the hot companies.”

Investors disagreed about whether we have entered an AI bubble, as OpenAI CEO Sam Altman suggested at a small dinner with reporters last month-or even an era akin to the dot-com boom, in which investors poured capital into any company related to the internet only for many of those companies to end up going under. 

The economics for AI companies, in particular, are diffrent. As Sapphire Ventures’ Cathy Gao pointed out, companies are growing to $100 million in ARR faster than ever-and with fewer people. But they are also not as efficient as software companies once were, as they have to spend exorbitant fees on things like compute.

“People are betting on the fact that compute costs will continue to decline, and over time, it’ll be a much more profitable company. So we’ll see if that plays out,” Gao said.

Where will things play out? Adam Zeplain of mark vc had some thoughts on that one. “Here’s what I know-that none of us know shit,” he said. “Two years from now, we’ll all be sitting here, and the competition w

AI infrastructure and Applications See Significant Investment This Week

This week saw substantial funding rounds for companies building the infrastructure and applications powering the next wave of AI innovation. here’s a breakdown of the key investments:

• Character AI secured $150 million in Series A funding led by Andreessen Horowitz,with participation from GIC,Electric Capital,and founders Fund.

• DataCrunch, a Helsinki, Finland-based AI infrastructure company, raised €55 million ($64.4 million) in Series A funding. byFounders, Skaala, Varma PensionFund, Tesi, and J12 Ventures, alongside angel investors, participated in the round.

• Scientil Photonics, a Grenoble, France-based developer of Heterogeneous Integrated Photonics for AI infrastructure, raised $58 million in Series B funding. Yotta Capital Partners and NGP Capital led the round, with Nvidia also joining.

• Fyxer.ai, a London, U.K.-based AI program for emails and meetings, raised $30 million in Series B funding. Madrona led the round, and Lakestar Capital also participated.

• Teton.ai, a Copenhagen, Denmark-based developer of predictive intelligence technology for health care, raised $20 million in Series A funding. Plural led the round, joined by Bertelsmann Investments, Antler elevate, Nebular, and PSV Tech.

Venture Capital Funding Updates

Here’s a rundown of recent venture capital funding rounds:

• wehandle, a São Paulo, Brazil-based SaaS platform for third-party workforce management, secured $6 million in funding. Canary led the round, with participation from ONEVC, Valutia, Blustone, and Quartzo.

• Candid Intelligence, a San Francisco, Calif.-based developer of AI agents for engineering, procurement, and construction projects, raised $5.5 million in pre-seed funding. Quiet capital led the round, joined by MIT’s E14 Fund, Liquid 2 Ventures, Flexcap Ventures, Yann LeCun, and others.

• Dig Energy,a Manchester,N.H.-based developer of geothermal-specific drilling technology, raised $5 million in seed funding. Azolla Ventures and Avila VC led the round, with Drew Scott also participating.

• Metal, a New York City-based AI-powered research platform for private market investors, raised $5 million in funding from Base10 Partners.

PE Deals of the Week

– HealthEdge, a New York City-based health care demand-side platform.

– polycorp, a portfolio company of Arsenal Capital Partners, acquired Burke industries, a San Jose, Calif.-based custom elastomeric product supplier. Financial terms were not disclosed.

– Shenandoah,backed by GenNx360 Capital Partners,acquired Nu-Pipe LLC,a St. Petersburg,Fla.-based pipe rehabilitation company.Financial terms were not disclosed.

– TMA Systems,a portfolio company of The Pritzker Institution,acquired eBridge Connections,a Vancouver,Canada-based integration platform provider. Financial terms were not disclosed.