Legal Tech, VC Brawls, and Big Deal Rejections

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This week we talk about Wiz’s bold decision, a public VC feud, new legal tech capital, and a16z’s close call. Let’s get started!

This week’s top startup stories

Wiz says no to Google: Walking away from a $23 billion acquisition offer from the search giant wasn’t an easy decision for the fast-growing, four-year-old cybersecurity startup, which was valued at $12 billion in May. “It’s difficult to say no to such modest offers, but thanks to our exceptional team, I feel confident in making this choice,” Wiz CEO Assaf Rappaport wrote in a letter to employees. The company is currently aiming for a $1 billion ARR milestone by 2025 and an IPO, though Rappaport didn’t provide a time frame for a potential listing. read more

Cohere Beats Rivals in Generative AI:Cohere, a Canadian startup that builds language models for specific companies rather than consumer apps, has raised $500 million at a valuation of $5.5 billion. The company was generating $35 million in annual revenue at the end of March, up from about $13 million at the end of 2023, according to Bloomberg. Cohere has the potential to grow quickly, and investors are clearly willing to pay for that growth — it’s valuing it at exactly 157 times ARR. read more

Venture capitalists see opportunity after CrowdStrike failure:In 2024, a single faulty software update probably shouldn’t be allowed to take down so many of the world’s most important computer systems. But some VCs say a group of new startups could prevent it from happening again. read more

Refreshing a decade-old drama: VC David Sacks and Rippling founder Parker Conrad publicly feuded over X, and many of Silicon Valley’s elite took sides. Accusations flew, and a side was chosen. VCs typically try to be friendly with founders, but such public feuds can damage the industry’s reputation. read more

This week’s top fundraisers

Until recently, startups haven’t had much success selling technology to the legal profession. But times may be changing. This week, we witnessed two deals in the legal tech industry.

Legal growth and profitability: Clio, a Canadian software company that helps law firms operate more efficiently with cloud-based technology, was founded 16 years ago. The company appears to be finally hitting its stride. This week, it raised $900 million in a Series F round at a $3 billion valuation, nearly doubling what it was worth in 2021. The profitable company also increased its ARR to $200 million, up from $100 million two years ago. Clio’s growth has been fueled by built-in payments and AI offerings. read more

The Harvey Case: Two-year-old AI legal co-pilot Harvey has raised $100 million in a Series C round led by GV at a valuation of $1.5 billion, up from $715 million last December. While investors are betting big on Harvey’s future, lawyers may be reluctant to use it widely, given “the propensity of language models to spout toxicity and fabricated facts,” writes TechCrunch’s Kyle Wiggers. read more

Staying up to date: Vanta, a company that helps companies stay secure and compliant, just raised $150 million in Series C funding at a valuation of $2.45 billion. The six-year-old Vanta started out by helping small companies get certified, but now it wants to be a security partner for large companies as well. read more

Preventing tricky prompts:Lakera, a Swiss startup that protects generative AI apps from malicious prompts and other threats, has raised $20 million in Series A funding. The company’s software protects against prompts that could force language models to reveal private information. read more

The hottest news from the VC and fund industry this week

close encounter a16z: A security researcher discovered a serious flaw in the a16z website that could have leaked confidential company data. The researcher discovered that the bug allowed access to email addresses and passwords. Fortunately for the well-known VC firm, the flaw was quickly patched and no data breach occurred. read more

Venture capital firms continue to invest in artificial intelligence:New data from Crunchbase shows that generative AI startups are on track to surpass last year’s impressive $21.8 billion in funding. read more

Not less important

Sitting in a school bathroom, 17-year-old Eric Zhu launched Aviato, a private market data analytics platform that aims to compete with private market intelligence giants PitchBook and Crunchbase. read more