Built By Berkeley

Welcome to Built By Berkeley, where we announce all the funding rounds by Berkeley-founded companies. This is a community effort, so please let us know if we missed a company here. 🐻

We celebrate the achievements of founders in this newsletter, so congrats on the $93M raised this week by Berkeley alums…and we will always do this!

but

What happens when things don’t go to plan. In 2021 (the height of COVID/ZIRP) more than 354 companies received $B+ valuations, also known as Unicorns. According to CB insights at the end of Dec ‘24 there were 1,200+ Unicorns globally. Are all of these truly still unicorns? No.

Enter the zombicorn! Typical warning signs:

• Stalled revenue growth (< 20 % YoY) while burn remains high.

• Multiple extensions/bridges led by inside investors.

• Employee option repricing or large secondary sales at steep discounts. E.g. Cameo 90% discount in last years funding round.

• Layoffs + unit-economics pivots without a clear path to cash-flow-positive.

• Valuation caps in convertibles now < last preferred round price.

So what happens to all of these potential zombicorns? Some will eventually shut their doors, while others will be acquired by larger companies. Some will even grow into their valuation and create massive outcomes, so keep fighting!

Another answer you often hear is, “Private equity will buy them at a price.” This is perhaps too simple, because a typical PE transaction is looking for:

1. Efficient Business / ability to cut costs rapidly

2. Ability to take lots of leverage (debt)

3. Some form of pricing power or uncompetitive market

4. PE typically want control and some VC investors might not be incentivized to sell at a low price

Because venture is a power-law game, VCs aim to back companies they believe can become breakout winners in large TAM markets or Berkeley founders as they are so good 😃 ). Firms destined to be the fourth or fifth player in a big market are rarely a fit for private equity: they may lack pricing power and remain vulnerable to new entrants.

What does this mean?

Who knows but a lot of this value held in unicorns in unlikely to translate into distribution.

PE will unlikely be the white knight people expect to be for liquidity and if they are expect them to want to pay rock bottom prices.

It’s an exciting time, because adversity often sparks creativity. Some players will try to merge into stronger groups; though the outcome is usually more Frankenstein than Helen of Troy. Others will need a reality check and a reset: down rounds, pivots, and similar moves. The key is to make these changes from a position of strength, while there’s still cash on the balance sheet. Best not to default to the age-old “extend and pretend.”

[Side note this post topic was suggested to me by an avid Built By Berkeley fan - so all suggestions welcome for future posts]

Anyone looking for a great accelerator focused on Berkeley founders that does not take equity check out Foundation Capital’s Cal Build who are currently looking to recruit their 5th Cohort. He

Summary by the #️⃣ & 💰:

• 5 Berkeley-founded companies funded

• $93M of capital raised from the 21st April to 27th April

💡 Got any ideas or feedback on how to improve this weekly digest? Just hit reply.

Closed Rounds

📊 Windfall $65M Series B 🇺🇸 AI-powered people intelligence platform. 💰 Bonfire Ventures, California Innovation Fund, Industry Ventures

🐻 Arup Banerjee, Co-Founder & CEO. Haas MBA. Article

🩺 Brellium $17M Series A 🇺🇸 AI-driven clinical compliance platform. 💰 First Round Capital, Left Lane Capital, Menlo Ventures

🐻 Zach Rosen, Co-Founder & CEO. BS Haas. Article

🧠 Artian $6M Seed 🇺🇸 AI agents for enterprise automation. 💰 Wormhole Capital

🐻 Prashant Reddy, Co-Founder & CEO. BA EECS.

🎓 Kollegio $3.5M Seed 🇺🇸 AI-powered college counseling platform. 💰 Reach Capital, Tuesday Capital

🐻 Saeed Naeem, Co-Founder & CTO. BA EECS. Article

🌬️ WaHa $2M Seed 🇺🇸 Energy-efficient HVAC solutions. 💰 Berkeley Catalyst Fund, Taqnia International

🐻 Frank Ramirez, Founder & CEO. JD Law.

Built By Berkeley Tracker

Our goal is to document the startup ecosystem of Berkeley-founded companies. Please share this newsletter with any Cal Bears in your network so we can crowdsource information about all investment rounds and job opportunities.

• Did we miss a company or want to announce a round? Add it here, and we will post it next week.

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Built By Berkeley is not affiliated with UC Berkeley, but maybe we will be one day if we get enough subscribers….