May 7th VC related events, news, articles for investors
Hello friends,
Happy Saturday! Have a great weekend!
Scroll down to view Venture Capital news, upcoming events, and VC reads.
VNTR COMMUNITY NEWS
We hosted our first VNTR Capital Breakfast in London on May 4th where we gathered 25 VCs and angel investors to connect, network, and share their investment focus. We will host recurring events in London to grow the VNTR Capital community and syndicate in the UK.
This week, we are hosting an Investment Committee on Wednesday, May 11th at 6 pm Dubai time where 3 startups will present their ventures to VNTR community investors. RSVP
We are planning to host VNTR Capital networking events in Davos during World Economic Forum and in Monaco during Monaco Grand Prix. RSVP now to get on the list
Want to co-host VC-related events, share events, or sponsor respond to this email or Telegram @byuric to discuss collaboration opportunities.
Join VNTR Community to participate in our upcoming events, connect with other investors, and co-invest?
UPCOMING EVENTS
May 11 - VNTR Investment Committee (Zoom)
May 12-13 - EU Startups Summit 2022, Spain
May 23-24 - Investment USA 2022 New York
May 22-26 - World Economic Forum Annual Meeting Davos
May 23-26 - VNTR World Economic Forum Davos
May 24-27 - Wolves Summit, Wrocław, Poland
May 26 - VNTR Breakfast New Delhi
May 27-29 - VNTR Monaco Grand Prix
June 1-2 - Emerge Conference, Yerevan, Armenia
June 6-9 - AIBC Americas, Toronto, Canada
June 7-8 - Arctic 15 Startup, Helsinki, Finland
June 7-9 - Money 20/20 Europe
June 9-12 - Central Asian Venture Forum, Almaty, Kazakhstan
June 8-10 - South Summit. Madrid, Spain (30% partner discount)
June 20-23 - Collision, Toronto, Canada
July 19-20 - Venture Summit West, Silicon Valley
Check out VNTR's upcoming events
VC READS
Bad News: Global VC Funding In April Dipped Again. Good News: It Wasn’t A Nosedive
Global venture funding totaled $47 billion in April 2022 - the lowest amount invested in private companies in the past 12 months - based on an analysis of Crunchbase data. While the dip isn’t massive, it does signal that the slowdown we saw in the first quarter of this year is the start of a longer-term shift in funding, particularly at the late stage.
‘Cash Is King’ As VC Spigot Slows
A year ago, startup founders often found themselves fought over by venture investors eager to grab a piece of any promising young company with fast growth potential. Investors competed in an increasingly heated environment in which they were often under pressure to close outsized deals in a matter of days. All told, venture capitalists spent a record $643 billion in 2021, almost double what they had the year before. But times are changing. Global venture investment in the first quarter of 2022 dipped 13 percent quarter-over-quarter, marking the first time in a year of funding records when startup capital investment fell from one quarter to the next. Rising inflation, a stalled IPO market, and ongoing instability sparked by Russia’s war in Ukraine have injected new caution into startup investing. As a result—with the next VC check suddenly not as certain as it may have been even a few months ago—investors and others in the industry say startup leaders should consider tamping down on spending and conserving cash.
The State of U.S. Early-Stage Venture & Startups: 1Q22
Early-stage venture performance remained historically elevated in 1Q22, despite turbulence in later-stage ventures and in the public market. 83% of startups on AngelList that had their share price change in 1Q22 saw that share price increase. That’s only a modest decline from 4Q21’s rate of 84% and 1Q21’s rate of 85%.
Tiger, Gaingels, Insight Most Active Investors In US Market In April As 2Q Starts
Although six venture firms had deal totals that hit double digits in April, that number is down from a dozen just two months ago. The usual suspects lead the way, with Gaingels, Tiger Global, and Insight Partners again sealing the most deals in US-based startups last month, according to Crunchbase data. While those firms’ numbers have been steady this year, some appear to be slowing investing. In March, six firms completed more than a dozen deals, as opposed to only three last month. In April 2021, by contrast, 15 different firms each signed 10 or more deals. Even with some firms slowing their dealmaking pace, let’s look at the most active investors in U.S.-based startups last month and some interesting rounds they took part in.
Two Top VC Firms Bet on a Second Life for Twitter as a Startup
Twitter Inc. is a strange target for venture capitalists. It’s 16 years old, growing slowly, and publicly traded, all anathema to what VCs want. Yet, Elon Musk somehow persuaded two of the world’s most prominent VC firms, Andreessen Horowitz and Sequoia Capital, to invest in his effort to take Twitter private.
The deal may have been a nonstarter for these firms a few years ago, but recent changes to how they operate would allow more of these sorts of nontraditional investments in the future. Although each firm began as a pure VC outfit, they’re now both so-called registered investment advisers, allowing them to dabble in private equity transactions or public stocks and hold cryptocurrencies.
TwitterLinkedinFacebook Are we witnessing a major VC pullback? Is it temporary? What does that mean for startups? Certainly the topic du jour in startup circles.
'Tourist' investors haven't fled VC, but there are signs of a tactical retreat
Corporate venture arms, hedge funds, private equity firms, and other nontraditional investors have rushed into venture over the last few years. Their participation, which reached over 78% of total US VC deal value in 2021, according to PitchBook data, was credited with driving up deal prices across the venture industry. Now, many of these investors—especially crossover firms that invest in public and private companies—are starting to retreat from VC-backed startups amid high stock market volatility and increasing interest rates. In the first three months of 2022, nontraditional investors participated in $52.5 billion worth of deal value, less than in any quarter of last year, according to the latest PitchBook-NVCA Venture Monitor. But their pullback from venture capital is primarily an aversion to larger late-stage deals, not VC overall. In Q1, these investors participated in the largest deal count on record, according to a PitchBook estimate.
Deal-flow newsletter PreSeed Now to introduce future UK crown jewels to investors
Pre-seed startups are often too early for showtime, but not for deal-flow newsletters. Launching today, deal-flow newsletter PreSeed Now will present early-stage startups from around the U.K. to investors twice a week, with one in-depth company profile per issue. “U.K. companies, and particularly the earliest-stage companies, don’t necessarily get covered by the existing tech press,” founder Martin SFP Bryant said. A former tech journalist himself, he understands why, but also long wished that something like PreSeed Now existed. “And then last year, I realized that other people kind of wanted it as well.” In addition to its geographic focus, the newsletter has a type. “The sweet spot for PreSeed Now is B2B and deep tech startups that have built, or are building, something and have founders with credible domain expertise,” Bryant wrote in the newsletter’s launch post.
Ellison, Binance and others are putting $7 billion into Musk's Twitter deal
Elon Musk gets by with a little help from his friends. He now has several big-name investors on board with his Twitter purchase, including Larry Ellison, Binance, a16z and Sequoia Capital. A total of 19 investors helped secure $7.14 billion in new funding for Musk's $44 billion buy, according to an SEC filing Thursday.
European VC funds raise a record €18B in 2021
A report published this week by Invest Europe, an association representing private equity, venture capital, and infrastructure firms in Europe show private equity fundraising reached €118 billion in 2021, the highest level seen to date. Fundraising for growth funds reached a new record of €20 billion and venture capital pulled in over €18 billion, an increase of more than 70% compared to 2020. More than 5,300 companies received a venture investment in 2021, 98% of which were SMEs. Private equity and venture capital firms invested a total of €138 billion in European companies in 2021, a 51% increase in 2020. The figure far exceeds levels in any year recorded.
Storied VC says investors are unlearning the lessons of the last bull market
Investors are trying to regroup following the worst month since the pandemic, and Friday’s session ended with the Dow tanking nearly 1,000 points and the S&p 500 pushing back into correction territory. All eyes are on this week’s monumental Fed meeting, where a 50 basis-point rate hike is on the cards — some say April’s meltdown means don’t expect anything bigger.
Unicredit’s chief economic advisor Erik F. Nielsen told clients that despite a dismal April, stocks are holding up better than he expected, but maybe not for much longer: “The problem is that asset allocation is always the result of a probability game, but as the odds change with a deteriorating world economy, cash and other zero-yielding holdings might well become more attractive as a parking place for a while.”
Meet Mark Zuckerberg’s Harvard Classmate Who Is Trying To Build A Global Startup Factory
After finishing a two-year stint in Norway’s naval special forces, Magnus Grimeland arrived at Harvard as a 23-year-old freshman in 2003. He promptly caught the tech bug, which put him in an opportune place at an opportune time. Grimeland befriended a classmate named Eduardo Saverin. He rowed on the crew team, where he met Cameron and Tyler Winklevoss. He might have even worked for Mark Zuckerberg at TheFacebook, as it was then known if he weren’t also juggling classes and athletics and caring for his infant son. “I was close to applying for one of their internships. They more or less hired anyone in the early days,” Grimeland recalls with a wry grin. “I think anyone who took those internships is incredibly well off right now.”
A Brief Overview of Crypto Payments in 5 Charts
Bitcoin’s inception in 2009 was steeped in hopes of doing away with trusted third parties for online peer-to-peer transactions. In fact, that is the first sentence in the abstract of its white paper. Given the evolution of Bitcoin over the last 13 years, most notably elevated transaction fees, various cryptocurrency projects and protocols have popped up as a means to send online payments, both on Bitcoin and on other blockchains. Be it the increased adoption of Bitcoin’s Lightning Network or the tremendous growth of the gaggle of stablecoins, both collateralized and algorithmic, there’s no denying that cryptocurrencies are hyper-focused on solving payments.
Supergiant Seed Rounds Are Still On The Rise
In the plant realm, we usually envision a seed as something small. In reality, however, dimensions vary immensely—from orchid seeds the size of a dust particle to coconut palm seeds that can weigh over 50 pounds. The same thing can be said of seed-stage startup investment. While we might think of a typical investment as a couple of million dollars, round sizes classified as seed range from tens of thousands to hundreds of millions. That said, the rise of really big seed rounds is mostly a recent phenomenon. Numbers have grown particularly sharply in the past couple of years, coinciding with a sharp increase in overall venture investment.
“The major driver has been more and more capital coming to the seed stage,” said Eugene Zhang, founding partner at TSVC, a Silicon Valley-based firm that’s been making seed investments for the past 11 years. Over that time, valuations have grown several-fold, meaning it simply costs more for a significant stake in a promising startup.
Imagine You're a Venture Capitalist
Imagine you’re a venture capitalist. You find a great company. You buy 16% of the company for $8m at $50m post-money valuation. Six months later, the company raises $100m at $500m. Things have gone very well.
As more VC money floods into fertility, some startups are feeling left out
Fertility-focused tech is attracting an unprecedented amount of venture capital funding, but startups developing new reproductive treatments and diagnostic tools still feel overlooked. Infertility is a massive issue that affects 15% of reproductive-aged couples worldwide, according to the World Health Organization. Studies show that the use of procedures like in vitro fertilization - where eggs and sperm are combined in a lab - have increased dramatically. The problem is not new, but only in the past couple of years have VCs really turned their attention to startups that are working to address the issue. Last year, $823.1 million was invested across 90 deals globally, according to PitchBook data—an increase of 273.3% and 109.3%, respectively, over five years.
What Latin America’s Startup Ecosystem Will Look Like By The End Of 2022
In January, Crunchbase reported that with $19.5 billion of investor capital poured into the region, 2021 was a record year with triple the growth compared to previous years. Despite a dip in Q1, funding to the region is still running hot, and, in 2022 more social and economic transformation awaits. And as more investors dip their toes into the promising LatAm market, there will be some new factors to consider. The region’s digital transformation has flourished partly due to the pandemic, with more complex innovations in fintech and commerce maturing. For investors, the growth was hard to ignore, encouraging them to change course from China to LatAm. The surge of funding, with a strong push in Q4 (like a “Santa Claus of VC”), created 18 new unicorns in LatAm last year, including Bitso, Clip, and Ualá. According to The Crunchbase Unicorn Board, there are now 26 unicorns in the region.
Goldman Sachs Makes Its First Bitcoin-Backed Loan
Goldman Sachs (GS) has offered its first bitcoin-backed loan in the latest sign that Wall Street is moving further into crypto. Bloomberg first reported on the news. Goldman’s secured lending facility allowed a borrower to use bitcoin (BTC) as collateral for a cash loan."We recently extended a secured lending facility where we lent fiat collateralized on BTC; BTC being owned by the borrower," a Goldman spokeswoman told CoinDesk in an email. "The interesting piece for us was the structure and the 24-7-365 day risk management." Goldman, which has a dedicated digital assets team, traded its first over-the-counter bitcoin options to Galaxy Digital last month.
US micro-funds play to their strengths in 2021
Micro-funds—venture investment vehicles that raise $50 million or less—collected nearly $5 billion across a record 339 US funds in 2021, according to PitchBook data.
EV Charging Is A Hot Spot For Venture Deals
The number of electric vehicle owners today is dwarfed by a secondary group. This would be the untold millions who say they’d like one but are waiting until costs go down, the driving range goes up, and charging stations are more widely accessible. On that last point, venture investors and startups are scaling up efforts to improve infrastructure. Over the past few quarters, scores of companies in the EV charging space have raised funding, much of it seed and early stage.
Q1 2022 venture capital activity in crypto set to outpace 2021
The first quarter of 2022 saw unprecedented growth in terms of venture capital activity in different blockchain sectors. In 2021, venture capitalists poured in over $30 billion into infrastructure, nonfungible tokens (NFTs), decentralized finance (DeFi), centralized finance (CeFi), and Web3. That set the bar pretty high if 2022 was going to beat it. In the first quarter of 2022, capital inflows from venture capitalists were over $14.6 billion, or around 48% of all the capital investment by the last year. Over 500 individual deals were struck in the first three months of 2022 throughout the five major sectors listed above.
Dubai to launch $100m VC finance fund to support start-ups
Dubai has announced the launch of a new venture capital finance fund with about Dh370 million ($100.7m) to bolster start-up projects in the emirate and promote its ambition of becoming a global FinTech hub. The launch of the Venture Capital Fund for Start-ups was approved by Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, on Wednesday after he led a meeting of the Executive Council, Dubai Media Office said on Twitter. The new fund, set to be launched in June 2022, aims to “promote the economic growth of the emirate and consolidate its position as a global center for financial technology (FinTech) and innovation in investment capital”, the tweet said.
Why are VC firms investing in chip startups?
As compared to 2020, the global sales of semiconductor chips soared by 60 percent to USD 35.9 billion; reportedly, half of that total comes from specialized AI chips used in mobile phones. As per PitchBook data, this market is expected to grow at over 20 percent and reach USD 64.9 billion by 2024. Semiconductor startups’ popularity has increased manifold, as seen above. Investors’ interest in these startups has much to do with fuelling higher efficiency and greater utility for AI processing. As per reports, the VC funding for the global semiconductor startups has more than tripled year-over-year in 2021. Up to USD 9.9 billion were invested across 170 deals. The segments covered included companies building AI chips, compression algorithms for machine learning model deployment, and intelligent sensors. One of the reasons why these startups are attracting funding is that all kinds of businesses are now working on in-house chip development – this presents massive opportunities for specialist processor firms to license their tech.
Portugal and the vibrant venture capital ecosystem
When Paddy Cosgrave brought the Websummit to Portugal in 2016, Europe’s largest tech event, there were already Portuguese startups on the international scene, like Farfetch, Seedrs, and Codacity. The event has grown to a larger scale over the years, putting Portugal in the spotlight when it comes to startups and venture capital but also as a wonderful place to work and live. The 40,6% growth of ex-pats in 2021 compared to 2011 also supports this perception.
Portugal has more unicorn companies than Spain, Greece, and Italy combined, according to the Executive Director of Startup Portugal. If you compare the size of Portugal with those countries combined in terms of population and GDP in 2021 is less than 9% and around 1%, respectively.
Startups and Unicorns | We have met the enemy and they are us
In summer 2019, Adam Neumann, the co-founder and then CEO of WeWork, cashed out over $700m ahead of the company’s initial public offer (IPO). The IPO never happened and the rest is history. In India, most founders and investors were appalled by the excesses at WeWork. I have had the privilege to know and work with many great Indian investors who would be appalled if anything like that happened to their cos. So then, why do we have governance problems in so many unicorns minted since WeWork? In the VC world, founders who siphon off money are as bad as founders who ramp up valuations with flimsy economics and focus merely on personal secondary exits. Investors who knowingly overlook ethical conflicts and misalignment of incentives are as bad as those who are cheering out of ignorance.
It’s very easy to blame all this on founders. But from my experience working with the same set of founders for 15 years now, I can say that a lot of well-meaning founders have been systematically corrupted by us — the venture capital investors, angels, and ‘Super Angels’.
Mergers & Money: As Crypto Valuations Keep Increasing, So Do Environmental Concerns
It is sometimes easy to think everything in the world of crypto is cheery—with new unicorns minted almost weekly and new dedicated venture funds constantly launching. However, a couple of recent events highlighted one concern—energy consumption—that while unlikely to derail the industry, certainly has the potential to disrupt the digital currency sectors as ESG concerns become more prominent among investors and energy prices continue to spike.
Last Wednesday, U.S. House Rep. Jared Huffman sent a letter to the Environmental Protection Agency to make sure cryptocurrency mining facilities are not violating foundational environmental statutes like the Clean Air Act or the Clean Water Act.
Fintech helps drive UK venture capital flow in Q1
Venture capital (VC) funds have poured £6.9bn into UK scale-ups in the first quarter of the year, completing 745 deals, but ongoing uncertainty in the economy is set to slow down the pace of dealmaking, according to a new survey. KPMG’s Global Venture Pulse survey, published today, found that a rise in corporate-backed venture capital, private equity funds searching for better returns and an increased focus on early-stage investing has powered UK’s VC market in the first three months of the year. “Despite concerns around the uncertainty in the economy, and with interest rates rising, the UK continues to demonstrate resilience and adaptability in attracting VC investment and is the jewel in the crown for innovation in Europe,” said Warren Middleton, lead partner for KPMG’s Emerging Giant Centre of Excellence.
Canadian venture capital market has strongest first quarter on record
Venture capital activity in Canada hit an all-time record high in the first quarter, with US$3.5 billion in investment across 213 deals, up from US$3 billion (across 276 deals) in the year-earlier quarter, according to the latest KPMG Private Enterprise Venture Pulse Q1 2022 report. Canadian venture capital firms raised US$824.4 million in the first three months of the year -- a period marked by global uncertainty due to the war in Ukraine, rising inflation and interest rates, continued supply chain pressures, and the persistence of the COVID-19 pandemic. A majority of that total funding went towards a Toronto-based software firm, which raised US$650 million in a Series C round. "While significant uncertainty during the quarter impacted the total number of deals, the amount of money being invested in the market is astronomical," says Sunil Mistry, Partner, Private Enterprise and Technology, Media and Telecommunications, KPMG in Canada. "Canada's VC ecosystem remains remarkably robust in the current environment, which is a strong indicator that Canada's VC market has matured.
Global Talent Shortage Threatens Growth of Fintech Sector
The global fintech sector has seen an exceptional +182% increase in tech job growth for the first quarter of 2022 – with the top 8 fintech ‘mega-hubs’ accounting for over 90% of all new fintech jobs advertised around the globe. The findings – from recruitment firm Robert Walters’ Global Fintech Talent Report – highlight how the fintech industry is one of the fastest-growing sectors post-pandemic, outperforming the wider market by 3x. However, according to recruiter Robert Walters, the sector will face major hurdles this year as an acute tech talent shortage around the globe threatens to halt the fintech growth machine.
US Lawmakers Reintroduce Bill to Give CFTC Crypto Spot Market Oversight
A bipartisan set of U.S. lawmakers are introducing a bill that would give the Commodity Futures Trading Commission (CFTC) a greater role in overseeing crypto spot markets. The Digital Commodity Exchange Act of 2022 (DCEA), introduced Thursday by representatives Glenn Thompson (R-Pa.), Ro Khanna (D-Calif.) Tom Emmer (R-Minn.) and Darren Soto (D-Fla.), would create a definition for "digital commodity" and allow the CFTC to oversee companies issuing or letting people trade these types of tokens while having the Securities and Exchange Commission (SEC) continue to oversee tokens that fall under U.S. securities laws. "The term 'digital commodity' means any form of fungible intangible personal property that can be exclusively possessed and transferred person to person without necessary reliance on an intermediary," a copy of the bill said.
Many VC Firms Ban Side Investing. Yuri Milner’s DST Encourages It
Partners at DST Global maintain at least two funds they use to make personal investments in startups. Many venture capital firms frown upon or even bar their partners from using their own money to make side investments in startups. At DST Global, the investment group run by the Russian-Israeli billionaire Yuri Milner, personal investing is institutionalized.
Venture Capital Is One of America’s Most Important Economic Superpowers. Let’s Not Undermine It
How venture capital is one of America’s most important economic superpowers As a long-time comic book fan, I often frame America’s many economic strengths as superpowers. And it’s not just a fun (some would say indulgent) writerly gimmick. It actually makes some sense as an analytical tool. Some superpeople are born with their abilities, such as Superman (at least under a yellow sun) or the X-Men. Kind of like how America is blessed with abundant natural resources and a natural, feisty entrepreneurial spirit that immigrants have brought with them since the country’s very beginning. Of course, these powers can be lost. Nativism can be kryptonite for attracting global talent.