Rex Woodbury’s Daybreak Ventures unveils $33 million first fund

Allie Garfinkle

How is AI like Betty Crocker?<div class="paywall-selector"></div><div class="paywall">



Rex Woodbury has an answer, which he first laid out in 2024 in his &#8220;Digital Native&#8221; Substack. While many people wonder how much stuff can truly be automated by AI, Woodbury reckons this is the wrong question—especially when it comes to consumer behavior. To explain why, he looks at the history of cake mixes. First introduced to the public in the 1930s, cake mixes didn’t really grow in popularity until the 1950s, when General Mills and Betty Crocker offered a simple but significant tweak—encouraging consumers to add a fresh egg. AI may very well be the same way: Just because an AI agent can do everything on its own, that doesn’t mean that’s what consumers want.



&#8220;I love that example, because it’s a very concise one that speaks to a lot of the founders I meet,&#8221; said Woodbury. &#8220;When things change, we could probably automate away tons of these things, with AI companies looking at everything from gaming to law to commerce. It’s crazy what some of these products can do, but are people quite ready for that? I love that story with Betty Crocker and the cake mix, because I do think it reminds you that people like some semblance of control. That&#8217;s an example of a human behavior that has not changed—and probably never will.&#8221;



Woodbury—whose investing career has taken him from TPG Growth to Index Ventures—started Digital Native in 2020. The Substack now has more than 65,000 subscribers, built through Woodbury’s time at Index, where he worked on the firm’s investments in companies like identity verification startup Persona and creator-focused retail platform Flagship. Now, Woodbury is striking out on his own, launching Daybreak Ventures with a first fund closed at $33 million, Fortune has exclusively learned.  



Woodbury sees his investing style as fundamentally ethnographic. &#8220;I think the earlier you get, the more you can be a bit more like an anthropologist,&#8221; he said. His overarching goal is to invest in companies that understand human behavior and, by extension, can transform intricate technologies into accessible solutions.



&#8220;Technology changes, but people don&#8217;t change that much,&#8221; said Woodbury. &#8220;Yes, there are shifts in human behavior, but at the end of the day, people want the same things. The story of technology and business is making things more accessible to people. It&#8217;s lowering costs, it&#8217;s making things more enjoyable and convenient. If you zoom out and look at big technology shifts—and obviously we have a huge technology shift right now with AI—usually the best businesses are built when technology shifts collide with behavior shifts.&#8221;



Daybreak will invest in both consumer and enterprise companies, writing checks ranging from $500,000 to $1 million. So far, some investments include animal health company Barnwell, legal automation startup Parambil, and resale commerce platform Hoop. Jade Hua, Hoop cofounder, who’s been working with Woodbury for one year, entered the partnership after Woodbury had been writing about resale for years.&nbsp;



&#8220;Rex&#8217;s blog signals to LPs and founders alike that he’s actively thinking about where the world is going, not just reacting to trends,&#8221; Hua told Fortune via email. &#8220;His thesis-led, content-driven approach to investing is rare, and it means that by the time he meets a founder, he’s already deeply informed about the problem space. That adds an extra layer of credibility and trust.&#8221;



Woodbury is clear—he’s an investor who writes, not a writer who invests.&nbsp;



&#8220;This is a job that&#8217;s about manufacturing serendipity,&#8221; said Woodbury. &#8220;What I mean by that is: The next generational founder, when she goes out to raise her round this week, does she think of Rex and Daybreak? When you&#8217;re showing up in the inboxes of 65,000-70,000 people every day, hopefully someone is saying: &#8216;Oh, you’re building in healthcare? Rex wrote about that last week.'&#8221;



Lisa Cawley, managing director at LP Screendoor, describes Woodbury as a &#8220;founder magnet&#8221; and expects that success for the firm in five years will come down to strategic evolution. (Other Daybreak LPs include Spheres, Atacama Ventures, and Reference Capital.)



&#8220;Rex isn’t using early-stage as just an entry point—for him, it&#8217;s where he wants to live long term,” Cawley said via email. “We could definitely see Rex expanding the team in strategic ways…Growing from fund to firm to franchise means you’ve deepened your competitive edge with focus and discipline.&#8221;



Woodbury’s goal of building Daybreak into an enduring firm relies on drawing non-obvious connections. For example, Woodbury is a Taylor Swift fan (he especially loves her albums evermore and folklore), and thinks there’s something technologists can learn from her. 



&#8220;What Taylor does really well is a version of what the best technology founders do—they evoke a feeling, they evoke an emotion,&#8221; he said. &#8220;Products should be personal to you, and she does a great job of tapping into people’s emotions, which is what the best tech companies do, too.&#8221;



See you Monday,



Allie Garfinkle X: <a href="https://x.com/agarfinks" target="_blank" rel="noreferrer noopener">@agarfinks</a> Email: <a href="mailto:alexandra.garfinkle@fortune.com">alexandra.garfinkle@fortune.com</a> Submit a deal for the Term Sheet newsletter <a href="mailto:termsheet@fortune.com">here</a>.



Nina Ajemian curated the deals section of today’s newsletter. <a href="https://fortune.com/newsletters/term-sheet">Subscribe here</a>.VENTURE DEALS
- <a href="https://www.flocksafety.com/">Flock Safety</a>, an Atlanta-based community safety technology provider, raised $275 million in funding at a valuation of $7.5 billion. Andreessen Horowitz led the round and was joined by Greenoaks Capital and Bedrock Capital, Meritech Capital, and others.
- <a href="https://www.terabase.energy/">Terabase Energy</a>, a Berkeley.-based solar power digital and automation solutions provider, raised $130 million in Series C funding. SoftBank Vision Fund 2 led the round and was joined by others.
- <a href="https://www.lumafield.com/">Lumafield</a>, a Cambridge, Mass.-based industrial X-ray CT technology developer, raised $75 million in Series C funding. IVP led the round and was joined by G2 Venture Partners, Wellington Management, existing investors Spark Capital, DCVC, Kleiner Perkins, and others.
- <a href="https://omni.co/">Omni</a>, a San Francisco-based business intelligence platform, raised $69 million in Series B. ICONIQ Growth led the round and was joined by Theory Ventures, First Round Capital, Redpoint Ventures, and others.
- <a href="https://www.blackwall.com/en/home">Blackwall</a>, a Tallinn, Estonia-based AI-powered security and web infrastructure company formerly known as Botguard, raised €45 million ($48.9 million) in Series B funding. Dawn Capital led the round and was joined by existing investor MMC.
- <a href="https://alloyed.com/">Alloyed</a>, an Oxford, England-based metallic components manufacturer for aerospace and electronics, raised £37 million ($47.9 million) in Series B funding. SPARX and the Development Bank of Japan led the round and were joined by Aviva Investors, Future Industry Ventures, and existing investors Oxford Science Enterprises, JX Advanced Metals, and Anglo American.
- <a href="https://www.supercritical.solutions/">Supercritical Solutions</a>, a London-based green hydrogen production technology developer, raised £14 million ($18.1 million) in Series A funding. Shell Ventures and Toyota Ventures led the round and were joined by Al Mada Ventures, Blackfinch Ventures, Kibo Invest, existing investors Lowercarbon Capital and Anglo American Platinum, and others.
- <a href="https://fortune.com/2025/03/12/pickle-clothing-rental-peer-to-peer-marketplace-airbnb-series-a/">Pickle</a>, a New York City-based peer-to-peer clothing rental platform, raised $12 million in Series A funding. FirstMark and Craft Ventures led the round and were joined by Burst Capital and FJ Labs.
- <a href="https://human.computer/">Human Computer</a>, a San Francisco-based game studio, raised $5.7 million in seed funding. Makers Fund led the round and was joined by a16z and Belinda Johnson.
- <a href="https://elevarm.com/">Elevarm</a>, a Bandung, Indonesia-based horticulture production agritech, raised $4.3 million in pre-Series A funding. Intudo led the round and was joined by existing investors Insignia Ventures Partners and 500 Global.
PRIVATE EQUITY
- Northleaf Capital Partners invested $100 million CAD ($69.5 million) in <a href="https://www.sharedtower.ca/">Shared Tower</a>, an Oakville, Canada-based carrier-neutral telecommunications infrastructure provider. Financial terms were not disclosed.
- Audax Private Equity and existing investor Lovell Minnick Partners acquired a majority stake in <a href="https://fortispay.com/">Fortis</a>, a Plano, Texas-based embedded payments platform for software providers. Financial terms were not disclosed.
- Jones Lake Management, a portfolio company of Fort Point Capital, acquired Savin Lake Services, a Hale, Mich.-based pond and lake management services provider. Financial terms were not disclosed.
- <a href="https://www.rwbid.com/">RWBID Construction Management</a>, a Hermosa Beach, Calif-based construction management services provider, merged with <a href="https://cumming-group.com/">Cumming Group</a>, a New York City-based project management and cost consultancy backed by New Mountain Capital and Tailwind Capital. Financial terms were not disclosed.
- <a href="https://www.seoulmedicalgroup.com/">Seoul Medical Group</a>, a Long Beach-based physician network backed by Ascend Capital Partners and ACE &amp; Company, merged with <a href="https://www.kamgipa.com/">Korean American Medical Group</a>, a Cypress, Calif.-based physician network. Financial terms were not disclosed.
EXITS
- Permira acquired <a href="https://encorefireprotection.com/">Encore Fire Protection</a>, a Pawtucket, R.I.-based fire protection services provider, from Levine Leichtman Capital Partners for $1.8 billion.
- Euronext agreed to acquire <a href="https://admincontrol.com/">Admincontrol</a>, an Oslo-based governance and collaboration solutions provider, from Visma for an enterprise value of NOK 4,650 million ($435.2 million).
- Keensight Capital agreed to acquire a majority stake in <a href="https://acticogroup.com/">ACTICO Group</a>, a Friedrichshafen, Germany-based compliance and other financial services provider, from Bregal Unternehmerkapital. Bregal Unternehmerkapital will remain a stakeholder in ACTICO Group with a minority re-investment Financial terms were not disclosed.
- Lunar Client acquired<a href="https://www.badlion.net/"> Badlion</a>, a remote Minecraft client, from ESL FACEIT Group. Financial terms were not disclosed.
OTHER
- Accenture acquired a minority stake in <a href="https://www.opaque.co/">OPAQUE</a>, a San Francisco-based confidential AI platform. Financial terms were not disclosed.
- Cyber Guru acquired <a href="https://www.mantra.ms/">Mantra</a>, a Paris-based employee cybersecurity platform. Financial terms were not disclosed.
-<a href="https://www.perchenergy.com/"> Perch Energy</a>, a Boston-based solar services provider, merged with <a href="https://www.arcadia.com/">Arcadia</a>, a Washington D.C.-based utility data and energy solutions provider. Arcadia will own a majority stake in the new venture. Financial terms were not disclosed.
- Ritholtz Wealth Management CEO Josh Brown acquired a minority stake in <a href="https://www.finnyai.com/">FINNY</a>, a New York City-based AI-powered growth platform for financial advisors. Financial terms were not disclosed.
- UiPath acquired <a href="https://peak.ai/">Peak</a>, a Manchester, England-based AI-powered product inventory and pricing optimization platform. Financial terms were not disclosed.
FUNDS + FUNDS OF FUNDS
- <a href="https://www.vento.ventures/">Vento</a>, a Turin, Italy-based venture capital fund, raised €75 million ($81.5 million) for its second fund focused on startups with Italian founders.</div>

Daybreak Ventures has revealed its $33 million first fund, Fortune has exclusively learned.

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