The Term Sheet monthly wrap: Biggest deals, funding rounds, and top stories

Good morning! Lucy Brewster here with a new, monthly look back at everything that happened on Term Sheet’s watch during the past month.

The Wrap

Venture’s 2023 slog continued into May, with M&A, venture deals, and private equity deals all continuing to slow. However the startup funding environment is a “tale of two markets,” VC Bob Ackerman of AllegisCyber Capital explained.

While the majority of startups are squeezed for cash, some, especially those utilizing A.I., have been supercharged by venture windfalls. “The venture slowdown is a response to what’s going on in the broader public markets: inflation, rising rates, and the SVB collapse, yet a lot of the slowdown in venture isn’t necessarily attributed to the underlying quality of startups,” explained PitchBook analyst Vincent Harrison. “There’s still a lot of really quality startups that are out there and there’s also still a lot of capital that’s left to be put to work,” he added.

A.I. fuels deal value uptick

Noteworthy deals of May

The second biggest generative A.I. deal of 2023

OpenAI rival Anthropic announced on May 23 that it raised $450 million in its Series C round led by Spark Capital. This makes it the second biggest generative A.I. deal of the year since OpenAI’s financing in January, according to PitchBook. The company was founded in 2021 by OpenAI veterans themselves, and other prominent investors include Google, Salesforce Ventures, and Zoom Ventures. “Anthropic’s $450 million deal highlights the enduring competitiveness of the generative AI space. Research startups, including Anthropic and OpenAI, have captured 38% of generative AI VC funding from 2018 to 2022,” explained PitchBook emerging technology analyst Ali Javaheri.

An eye-popping seed deal in A.I.-powered health care

The health care startup Hippocratic AI announced it raised a $50 million seed round on May 16 led by Andreessen Horowitz and General Catalyst. The company is building a generative A.I. platform to amalgamate health care information. “[W]hen it comes to generative A.I., health care is an industry that we view as holding the most potential and measurable impact,” wrote a16z investors Julie Yoo and Justin Larkin when they announced their investment in Hippocratic AI.

The biggest biotech deal of the month

ReNAgade Therapeutics, which was founded by investing firm MPM BioImpact, announced it raised a $300 million Series A round on May 23. Amit Munshi is the CEO, and F2 Ventures also led the round. The startup is developing breakthroughs in RNA medicine, which has applications for treatments for genetic diseases. “Sometimes the tougher the climate, the better the vintage, and in these tougher environments, raising substantial capital and building the right team—we think that’s the plan for long-term sustainability,” Munshi told Fortune.

A.I.-powered robot builder supercharged by substantial Series A financing

Figure, the startup that aims to build humanoid robots with A.I., raised $70 million in a Series A round led by Parkway Venture Capital, the company announced on May 24. The funding will help the firm build autonomous, humanlike robots that the company says could work in retail or handle other tasks. Other investors in the round included Aliya Capital, Bold Capital, and Tamarack Global.

Name to know: Rewind AI CEO Dan Siroker

Typically, VCs have held the cards when it comes to funding an early-stage startup, especially during a downturn. Yet Rewind AI CEO Dan Siroker chose an unorthodox approach in his most recent Series A funding. He made his pitch deck public and created a form for investors to send offers about how much they were willing to invest. “It wasn’t an obviously good idea before we did it, but after we did it, it actually turned out to work way better than we ever expected,” he told Fortune. Siroker announced NEA would lead the round on May 9 and invest $12 million at a $350 million valuation.