☕️Silicon Schism

Good morning.

AI hype is driving Silicon Valley startups to raise seed rounds bigger than what some Australian venture funds deploy in a year, prompting a fundamental recalibration of venture capital, a global VC data expert tells Capital Brief.

Peter Walker, global head of insights at Carta, who analyses data from more than 40,000 companies, says the market has split in two: Silicon Valley, where AI companies can raise $100 million seed rounds in 60 minutes, and everywhere else, where startups fight for increasingly scarce capital.

"There are things happening in San Francisco right now — valuations, fundraising pace — that feel just like 2021," Walker told Capital Brief while visiting Australia for SXSW Sydney. "And then there are people in non-Silicon Valley markets that are really struggling to fundraise."

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Market movers

Shares in Treasury Wine plunged on Tuesday after the winemaker withdrew its full-year guidance and paused a $200 million buyback, citing uncertain trading conditions in China and California.

The quick sync

• Palantir says it uses AI to help Coles capture data on staff hours and preferences in a bid to improve worker satisfaction and reduce churn. (Capital Brief)

• A volatile AGM season is set to test directors facing governance failures, fines and shareholder unrest. (Capital Brief)

• Nuno Matos laid out ANZ’s new strategy focused on cost savings, capital returns and higher profits by 2030, and investors responded positively. (Capital Brief)

• The SEC’s fix for the shutdown-hit IPO market is leaving most listings in limbo as risks and timing constraints keep deals on ice. (Bloomberg)

• JPMorgan blamed a rush to exit levered ETFs for intensifying Friday’s steep market drop. (Bloomberg)

Trading floor

M&A

• Vulcan Energy’s Glencore deal finalises offtakes for its Lionheart lithium project. (Capital Brief)

• TPG’s Rise Climate fund nears $4b acquisition of bus operator Kinetic Group. (AFR)

• Lederer lifts Elanor stake to 36% as disputed takeover bid ends. (Capital Brief)

• PEP eyes Alliance Aviation; Barrenjoey advising as Qantas weighs stake sale. (The Australian)

• Solomon Lew adds another 2% to his Myer stake through Blue Ocean Equities. (AFR)

• Brookfield to fully acquire Oaktree in USD3b deal to expand credit business and US presence. (Capital Brief)

• NZ taps Barrenjoey to assess NZD1.1b Chorus stake sale by 2026. (The Australian)

• Caterpillar’s $1b RPMGlobal buy gives founder Ian Runge $40m payday. (AFR)

• Calvary and Mater join forces to bid for Healthscope, planning to split assets as Ramsay and St John of God target key hospitals. (The Australian)

• OpenAI teams up with Broadcom on 10GW AI chip project to boost computing capacity. (Capital Brief)

Capital Markets

• Fletcher Building faces weaker demand and margins, launching a NZD100m cost-cutting plan to offset tough market conditions. (Capital Brief)

• Precinct Properties launches NZD310m discounted equity raise. (AFR)

• DroneShield’s DroneSentry gains UK security approval and NPSA listing via BT partnership. (Capital Brief)

• Firmus Technologies targets $1b ASX IPO next year with Nvidia backing. (The Australian)

• ANZ sets five-year plan to boost digital banking and integration, cancelling its $800m buyback to preserve capital. (Capital Brief)

• Rinehart-backed Brazilian Rare Earths launches $120m capital raise. (AFR)

• Rinehart’s rare earths bets soar to $3.5b with new St George Mining investment. (AFR)

• Catapult Sports halts trading ahead of acquisition and equity raise announcement. (Capital Brief)

• Gold and rare earths stocks jump as US-China trade tensions lift gold prices. (Capital Brief)

• Tuas shares dip as acquisition target M1 faces lawsuit from Liberty Wireless. (Capital Brief)

• Wildcat hires Macquarie to find a partner for its WA lithium project as MinRes pulls back. (AFR)

• JPMorgan launches USD1.5t plan to boost US defence, energy, and manufacturing sectors. (Capital Brief)

• ASD warns firms to upgrade defences by 2030 as quantum tech threatens current encryption. (Capital Brief)

• Luxury car sales surge as buyers return and brands temper EV ambitions. (AFR)

• ASIC orders super funds to improve retirement communications and member guidance. (Capital Brief)

• Palantir aids Coles in boosting employee happiness through data analytics. (Capital Brief)

• Powerball winner spends USD10m to rebuild fire-hit Los Angeles suburb Altadena with market-rate homes on 15 lots. (WSJ)

• Australia’s largest superfunds will visit Britain next week to promote the $4.3 trillion system’s capacity to invest in infrastructure and UK growth. (AFR)

• Crypto’s biggest crash reveals a market littered with pitfalls. (Bloomberg)

• Grindr jumps most in 15 months after report of buyout talks. (Bloomberg)

• Chalmers scrapped the proposed tax on unrealised super gains and indexed the $3m threshold, a move welcomed by critics but labelled a costly concession to the wealthy by the Greens. (Capital Brief)

VC 

• AI boom drives massive US seed rounds, pushing Australian VCs toward infrastructure-focused investments. (Capital Brief)

• AI startup valuations soar as VCs chase the next big wave. (AFR)

• Sydney’s Optimaze raises $3m to reduce cloud waste and costs. (Startup Daily)

• HungryHungry co-founder launches Otto, an AI voice assistant for restaurant calls. (Smart Company)

People moves

• Lifestyle Communities CFO Darren Rowland to exit in 2026, replaced by deputy Angela Farbridge-Currie. (Capital Brief)

• NRMA CEO Rohan Lund resigns after decade in role; Carolyn Darke named interim chief. (AFR)

• Zuckerberg poaches Aussie AI talent Andrew Tulloch from Mira Murati’s $US2b startup. (AFR)

• Sussan Ley reshuffles frontbench after Hastie’s exit, promoting Duniam, Wallace, and McKenzie. (Capital Brief)

• Corrs hires top Ashurst tax partner Costa Koutsis after major M&A successes. (AFR)

• Kjerulf Ainsworth, son of billionaire Len Ainsworth and the company’s second-largest shareholder, attacks board over Novomatic sale as CEO Harald Neumann resigns. (AFR)

• Melbourne scientist Richard Robson wins Nobel Prize for metal-organic framework breakthrough. (Startup Daily)

• Two sacked JLL execs sue for millions, claiming they were named over misconduct allegations before the investigation ended. (AFR)

• UK’s Virgin Atlantic names Corneel Koster as new CEO as Shai Weiss to step down. (Reuters)

The watercooler