VNTR Capital News Jan 28, 2024 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – Jan 28 News, Events, and VC Reads
Hello friends,
Happy Sunday!
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Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
Spotlight
VNTR PRO AI Mastermind — Join us for the new VNTR PRO AI-focused Mastermind - A bi-weekly meeting to explore the realm of AI as we delve into strategies for making savvy investments and capitalizing on the surge of emerging technologies. To be part of this exclusive Mastermind, please sign up via the VNTR platform. We aim to bring together individuals with a keen interest in AI who are actively investing in this dynamic field.
AI Mastermind is a dedicated space to:Pool expertise in AI from distinguished professionals and investors.
Review of the latest news in AI cultivating new business and investment opportunities within the VNTR network.
Focused brainstorming on the issues raised by the members.
VNTR Supercars Rally UAE — We are 4 weeks away from a 3-day/3-night driving adventure in the UAE from February 29 to March 3. Traverse the stunning landscapes of UAE, navigate through captivating deserts, and conquer scenic mountain routes while behind the wheel of high-performance supercars. Join us for an unforgettable experience, complete with sightseeing stops and immersive moments along the way. Apply to join
VNTR LP Membership — We launched a new service for Limited Partners actively looking to deploy capital into funds to connect with seasoned GPs within the VNTR community. We are hosting LP Roundtables in Geneva, Doha, Riyadh, and Online. Contact us if you want to join VNTR GP membership services. LPs can join the community and attend our LP Roundtables globally.
Corporate Membership and Sponsorship — The Corporate Membership program is designed to facilitate seamless connections with investors and premium clientele, offering a bespoke solution for your networking and business development needs. Companies are invited to Apply to schedule a call.
VNTR Chapters — We are building a global network of VNTR Chapters and are actively seeking dynamic Chapter Directors in strategic cities to lead the expansion of the VNTR Capital community. As a Chapter Director, you will serve as a pivotal super connector, playing a vital role in fostering growth and building robust connections within the global Venture Capital community. Apply to join
This week
Tel Aviv — We relaunched our events in Israel Chapter on Jan 23. Thank you to Anna Mazarsky and Uri Milshtein for hosting the roundtable at Gornitzky & Co.
Melbourne — We hosted the Australian Open side roundtable on Jan 25. Jannik Sinner astounded the tennis world with his remarkable victories over Djokovic in the semi-final and Medvedev in the final. Thank you, Viktor Larionov and Jacqui Bloom, for hosting the roundtable at Startupbootcamp.
Geneva — We invite family offices and active Limited Partners in VC funds to join us at the VC LP Roundtable on Feb 1 to learn about the new VC funds and meet with visiting VC from Monaco, Ian Sosso, Managing Partner at Monte Carlo Capital, who will host a workshop, "Investment Banker turned Super Angel turned VC."
Thank you to our Partners:
Decentral House — In Geneva's dynamic tech scene, Decentral House stands as the epicenter for the Web3 community. More than a coworking space, it's a vibrant hub where blockchain and tech enthusiasts collaborate. Transforming Geneva into a Web3 innovation hub, Decentral House is a community fostering idea-sharing, project collaboration, and creating the future of blockchain. Members enjoy exclusive access to enlightening events, workshops, and networking opportunities, blending professional growth with innovation and fun. Join Decentral House for a professional, inspiring, and limitless setting at the forefront of the Web3 revolution.
Upcoming VNTR Events:
Feb 7 VNTR PRO AI Mastermind (online)
Feb 7 VNTR Investors Roundtable London (ICE London side event)
Feb 8 VNTR Investors Roundtable Mexico City (Zonamaco side event)
Feb 21 VNTR Online LP Roundtable (online)
Feb 26 VNTR Investors Roundtable Dubai (AIBC side event)
Feb 27 VNTR Investors Roundtable Barcelona (Mobile World Congress side event)
Feb 27 VNTR Investors Roundtable Doha (Web Summit Qatar side event)
Feb 28 VNTR LP Roundtable Doha (Web Summit Qatar side event)
Feb 29 - March 3 VNTR Investors Supercars Rally UAE
March 1 VNTR Investors Roundtable Denver (ETHDenver side event)
March 5 VNTR Investors Roundtable Riyadh (LEAP side event)
March 6 VNTR LP Roundtable Riyadh (LEAP side event)
March 10 VNTR Investors Roundtable Austin (SXSW side event)
March 21 VNTR Investors Roundtable Porto Alegre (South Summit Brazil side event)
March 27 VNTR Investors Roundtable Hong Kong (Wow Summit HK side event)
April 10 VNTR Investors Roundtable Paris (Paris Blockchain Week side event)
April 16 VNTR Investors Roundtable Rio De Janeiro (Web Summit Rio side event)
April 19 VNTR Investors Roundtable Dubai (Token2049 Dubai side event)
April 19 VNTR Investors Roundtable Miami (eMerge Americas side event)
April 24 VNTR Investors Roundtable Bangkok (Money 20/20 Asia side event)
More events available on the VNTR Platform
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
UPCOMING VC EVENTS
Feb 3 30th Annual Venture Capital & Private Equity Conference at Harvard Business School, USA
Feb 6-8 ICE London, UK
Feb 20-21 Crypto360, Dubai, UAE
Feb 21-22 Step Conference, Dubai, UAE
Feb 21-22 Catalyst, Lisbon, Portugal
Feb 23-Mar 3 ETH Denver, Denver, USA
Feb 25-28 AIBC, Dubai, UAE
Feb 26-29 Mobile World Congress, Barcelona, Spain
Feb 26-29 4YFN, Barcelona, Spain
Feb 29-Mar 3 VNTR Supercars Rally UAE
Mar 4-7 LEAP, Riyadh, Saudi Arabia
Mar 6-7 MoneyLive Summit London, UK
Mar 8-16 SXSW, Austin, USA
Mar 26-27 Wow Summit, Hong Kong
April 8-12 Paris Blockchain Week, Paris, France
April 18-19 Token2049, Dubai, UAE
April 18-19 EmergeAmericas, Miami, USA
April 23-25 Money 20/20 Asia, Bangkok, Thailand
May 6-7 Dubai FinTech Summit, Dubai, UAE
May 9-10 EU Startups Summit, Malta
May 15-16 Next Block Expo
May 15-16 Echelon by E27, Singapore
May 22-25 Viva Technology, Paris, France
May 29-31 Consensus, Austin, UAE
May 29 -31 Gitex Africa, Morocco
June 5-7 South Summit, Madrid, Spain
June 17-20 Collision Conf, Toronto, Canada
July 10-11 World Business Forum, Singapore
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
Check out VNTR Capital upcoming events
VC Reads and News
View curated VC news and articles on the VNTR Platform
IPO Watchlist: The fintech unicorns likely to go public
This week, the CEO of popular buy now, pay later app Klarna, Sebastian Siemiatkowski, made headlines when he teased that a public listing in the US could be forthcoming. The company has followed a path that in some ways exemplifies the boom and bust that fintech startups endured in the last cycle. After raising a blockbuster $639 million round in 2021 at a $45.6 billion valuation led by SoftBank, Klarna took a down round at an 85% valuation discount in 2022. But in November, the company announced it had turned its first quarterly profit, positioning itself for an IPO. Proving profitability will be more critical than ever for companies readying themselves for a public listing.
Gulf money is flooding into European startups — these are the most active investors
European founders looking for fresh capital often chase deep-pocketed US investors — but recent years have seen them increasingly turning their attention to the other side of the globe. Gulf countries, which have plenty of capital lying in sovereign wealth funds and corporate VCs, are becoming attractive investors for startups and scaleups (and VCs) on the continent. In 2023, total investment from Gulf countries in European startups amounted to $3bn, according to Dealroom data — about 5% of total funding raised in the region. That’s almost a 5x jump from 2018, when the same countries invested just $627m in Europe.
How to plan for general partner succession
Nearly 10 years ago, in April 2015, I published a blog called “Confronting the ‘S’ word: Dealing with general partner succession.” As the founder and managing partner of Vintage, I wanted to ensure that Vintage would survive after I retire. Ensuring the survival of Vintage was a responsibility that I owed to our investors, portfolio funds, companies, and employees. Venture funds take a long time to build and realize their investments — in many cases, more than a decade and a half. An engaged, energetic, committed, and hungry venture management team is as vital at the end of the fund as it is at the beginning.
Eye On AI: Valuations Are Not Slowing Down
While there have been some predictions of a slowdown in venture dollars as it concerns generative AI startups, so far that does not seem to be bearing out — and we got another example this week. Voice AI startup ElevenLabs raised an $80 million Series B at what it called a “unicorn valuation,” though the company did not disclose an exact dollar figure. The new valuation represents a 10x jump from a Series A just last June that gave the startup a much more modest $99 million post-money valuation.
US investors pare back exposure to European VC deals
US investors have significantly reduced their involvement in European venture capital deals as they refocus on core markets. Last year, US-based venture investors took part in 1,863 European rounds, according to PitchBook’s Q3 Annual European Venture Report—a nearly 40% decline from 2022. This represents about 20% of the overall deal count, down from 23% the previous year. US VCs have shown less appetite for cross-border deals over the last year as they seek to reduce risk and provide more funding to support their local portfolio companies. Some investors including Coatue Management have pulled out completely from Europe this year.
VCs are not done betting on fintech
Fintech has been in the dumps for a while now, and with companies like Brex once again cutting staff as they try to rein in costs, you’d be forgiven for assuming that the market for financial technology products is struggling. Well, not really. Brex might not be having a good couple of quarters, but there’s sufficient positive news from the world of fintech to offset all the negativity around the sector. Bilt Rewards’ new massive round is a good example of the other side of the coin: The rewards-focused startup just raised nine figures at a significantly higher unicorn valuation.
Investors raise billions to buy discounted stakes in start-ups
Buyers return after secondary market for private shares was hit by higher interest rates
Investment firms are raising billions of dollars to buy stakes in venture capital-backed technology start-ups, as a long drought in acquisitions and initial public offerings forces early investors to offload their stock at discounts.
The start-up secondary market, where investors and employees buy and sell tens of billions of dollars’ worth of shares in privately held companies, is becoming an increasingly important trading venue, in the absence of traditional ways of cashing out and given a slowdown in start-up funding.
Venture secondaries buyers are primed for a busy year as start-up employees look for a way to sell their stock and investors look to return capital to their own backers or reallocate it elsewhere.
2024: A Year Of Reckoning And Resilience For Startups And VCs
As we bid goodbye to a tumultuous 2023, marked by macroeconomic uncertainties and geopolitical tensions, the private markets stand at a crossroads in 2024. Despite headwinds, the year concluded on a strong note, witnessing record highs in stock markets and a gradual easing of interest rates and market volatility. As a venture capitalist, I find myself contemplating the implications of these shifts on the private markets and predicting the year ahead.
Crypto for Advisors: Unlocking Crypto Custody
One of the challenges investors and advisors face when looking at digital asset investing is the custody of these assets. The recent spot bitcoin ETF approvals provide exposure to bitcoin with custody taken care of as part of the package. However, many investors already hold or are interested in owning the assets directly and understanding where to store and secure those assets is new and often a technical challenge.
The Week’s 10 Biggest Funding Rounds: Recurrent Energy And Bilt Rewards See Big Money
Not a bad week for a big funding announcement, as there were a couple nine-figure rounds in energy and loyalty rewards, but several just slightly smaller ones in a variety of other sectors. As the month wore on, investors seem to be opening their wallets — or at least the announcements were made.
Bank of England says 'no final decision has been made' on digital pound
The Bank of England (BoE) and HM Treasury in the United Kingdom released their response to a consultation on a central bank digital currency (CBDC) launched in February 2023, saying they intended to focus on “privacy and control.” In a Jan. 25 notice, the BoE said “no final decision has been made” regarding launching a digital pound, but officials would continue to explore CBDC feasibility and designs. Both institutions added they intended to “protect access to cash” should they move forward with a CBDC launch, giving residents an additional payment choice.
US elections: Are CBDCs becoming ‘hyper-politicized’?
It’s only since Facebook announced its Libra stablecoin back in 2019 that anyone has even talked about central bank digital currencies (CBDCs). And then most of the discussion was within the discipline — i.e., among financial regulators, academics and payment specialists. But last week, the CBDC conversation broke out in a big way as former United States President Donald Trump said he would “never allow” a digital dollar were he reelected president. A CBDC “would be a dangerous threat to freedom, and I will stop it from coming to America,” Trump vowed on Jan. 17 in New Hampshire. Overnight, it seemed, CBDCs had become politicized into a partisan, Republican vs. Democrat issue.
Lower Valuations, Higher Bar: What It’s Like To Raise A Seed Round In 2024
Seed funding to startups has grown into its own asset class over the past decade, with round sizes trending larger, and a bigger pool of investors backing these nascent startups. But in the aftermath of 2021’s venture funding heyday and subsequent pullback, investors say that while seed funding has held up better than other startup investment stages, these very young startups will see lower valuations and must now clear a much higher bar to get backing. More companies raised seed funding above $1 million in 2021. Those companies — which raised during a record-smashing year for venture funding — are saddled with valuations that could be too high for this current market — even at seed. Many of those startups have been forced to cut costs to extend their runways, and face a tougher sales environment.
How to make struggling startups ‘PE ready’
The drop-off in startup funding and a lack of exit options in recent years have left many startups on the brink of collapse. In the wake of the VC downturn, a handful of new investors have cropped up to offer struggling startups a second chance. Firms like Resurge Growth Partners, Tikto Capital and Arising Ventures target startups that no longer fit the typical VC mold with the intention of turning them into private equity-ready assets. We spoke to Eyal Malinger, partner at Resurge Growth Partners, about how this type of strategy is turning around overlooked VC-backed companies.
Now is the time to invest in edtech
We haven’t heard much from the edtech sector ever since the pandemic forced students out of the classrooms and in front of their computers. But, as Anna Heim writes in the intro of our most recent survey of edtech investors, “we found that with AI in the picture, edtech startups have been as quietly busy as a subterranean network of moles in fall.” Just tacking AI onto a product isn’t enough, and investors are hoping that the technology will lead to more innovation in the space. Check out Anna’s story on the future of edtech in emerging markets as well as the opportunities that AI can bring.
Despite a broad pullback in global startup investment over the past two years, investors say the U.S. seed funding environment was the most vibrant compared to other funding stages during the downturn. In fact, U.S. seed funding in 2022 grew by close to 10% in terms of dollars invested, in contrast to a downturn at all other funding stages. In 2023, U.S. seed funding fell 31% — a significant proportion — but still less than other funding stages year over year, an analysis of Crunchbase data shows. (It’s also worth noting that those other stages had already experienced year-over-year declines in 2022). In the current startup funding market, “we’re seeing a lot more great talent excited about starting things,” said Renata Quintini, co-founder of Renegade Partners, a Bay Area-based investment firm that focuses on Series A companies and is therefore close to the seed ecosystem.
SEC votes to ramp up SPAC regulation
In a Wednesday vote, the Securities and Exchange Commission approved a set of sweeping rules and amendments related to special purpose acquisition companies. The new regulations will increase disclosure requirements for SPAC sponsors in an effort to protect investors, but industry players also believe the ruling will have a stifling effect on the already-shrunken pipeline of blank-check companies taking private firms to the public markets. The decision came nearly two years after the SEC initially proposed the reform to the SPAC market following a boom in the use of blank-check structures to publicly list companies in 2020 and 2021.
Another Sign That Venture Capital Is Slowly Improving
It’s hard to say that the future of venture capital is looking brighter. But maybe it’s turned a corner?
Rising interest rates and fear of a recession in the U.S. made 2022 and 2023 terrible years in venture capital, a period that included a five-quarter streak of negative performance. That streak broke in the second quarter last year, when VC funds returned 0.2 percent, according to a report by BlackRock’s eFront, which calculated the return using the cash flow information of 2,431 VC funds a (mix of early-stage, balanced, and late-stage) on a net-of-fee basis. But the second quarter’s positive momentum didn’t continue into the second half of 2023.
China outpaces US in backing chip startups
China has taken the lead in investing in semiconductor startups, surpassing the US by a wide margin. According to PitchBook data, Chinese startups attracted 75% of all VC investment into chip companies in 2023, a minor decrease from its high last year, when it accounted for nearly 80% of all VC investments in the space. US companies garnered about 11% of VC semiconductor investment in 2023. Semiconductor startups are comprised of companies working on chip designs, chipmakers, production and equipment.
New UK rules will drastically lower the number of women able to angel invest in startups
The UK is Europe’s most mature startup ecosystem, with a vibrant tech community, a web of funding options and — until now — strong government support, thanks to tax relief schemes for investors like EIS and SEIS, and access to innovative financing such as UKRI grants, R&D tax credits and focused regional support from the British Business Bank. But incoming changes to regulation around who can invest in startups threaten to set us back and seriously compromise the UK’s growing pool of diverse angels. As of January 31, we’ll see a huge reduction in the number of women able to invest in startups on the basis of income — with an estimated 90 to 100% fall in some regions, down to zero in Northern Ireland and the North East of England.
Travel Startup Funding Peaked Pre-COVID. Now TravelPerk And Others Are Scaling Up
Among startup categories, travel has followed one of the more unusual investment trajectories. Funding to the space hit a peak in 2019, amid buzz around a likely Airbnb IPO. At the time, investors were also enthusiastically backing businesses targeting business travel, customized online trip planning, and new models for upscale accommodations. Then COVID hit, and travel spending dried up. While startups in the space did well on the funding front in 2021 — when pretty much every sector was up — we’ve yet to retrace pre-pandemic highs. For perspective, we charted out the past five years below.
Crypto Needs Cohesive Regulation – A Look at Europe’s MiCA
In the ever-evolving world of blockchain and cryptocurrency, a cohesive regulatory and business development ecosystem is crucial to foster collaboration and innovation. A fragmented world, where companies have to comply with different rules in every country they operate in, makes building the decentralized economy harder. Recently, Crypto Oasis, Crypto Valley, the DLT Science Foundation and Inacta Ventures joined forces to unveil the Inaugural Global Protocol Report, designed to help the industry navigate an increasingly complex world of regulation and protocol development.
Why 2024 May Be Tougher on Venture Capital Than 2023
So I thought the toughest times for venture would be behind us now. In 2022, we were in free fall, with public market caps falling like a knife, and the IPO markets frozen. And 2023 was the year of the Work Out in venture. Bridge rounds slowed down, and VCs acknowledged a lot of portfolio companies just weren’t going to make it. It got real in 2023, and that realness got normalized. The drama mostly was behind us. And public SaaS stocks in many cases did really, really well in 2023. So shouldn’t 2024 at least be better for venture?
Many Boom Time Startup Acquisitions Have Worked Out Badly
Buying a startup can work out very well. Just ask Meta about its Instagram purchase in 2012 or let Google tell you about its $50 million acquisition in 2005 of a little company called Android. But while success stories happen, it’s also true that many purchases work out badly. Acquirers might find they overpaid, face regulatory backlash, failed to scale the business, or have determined it isn’t a strategic fit. Such acquisition-gone-awry narratives often proliferate when business cycles shift — as they did in the past two years. Deals crafted in boom times can look ill-conceived in an environment of falling valuations and tougher financing.
Global VC investments sink in 2023, India still a bright spot
Global VC investment sank to $344 billion across 37,808 deals in 2023 from $531.4 billion across 51,894 deals in 2022 amid geopolitical, macro-economic and other challenges like high interest rates and inflation, a parched exit environment, and ongoing concerns related to startup valuations. The Americas accounted for more than half of VC investment this year ($183.6 billion), while the Asia-Pacific region attracted $92.4 billion, and Europe $62.3 billion, according to the KPMG Private Enterprise's 'Venture Pulse' report.
State of Venture 2023 Report
The venture market downshifts further in 2023, with dealmaking and funding totals falling to 6-year lows. Q4’23 was the harshest quarter for global VC in 6 years. However, the down market has revealed a handful of areas that remain notably resilient, from AI- and sustainability-focused startups to M&A deal flow in Europe.
Angels, pitch decks are overrated. Go with your gut
In 2021, I made my first angel investment without ever seeing a pitch deck. And I’ve never regretted it. It was my first angel investment experience, and I realised right away that the initial idea or pitch deck was totally overrated. In 2016, I met Mo (Mohamed Chahin) during my time at About You in Hamburg. Mo, who lived in Hamburg at the time, was doing something pretty innovative, running EatClever, a “dark kitchen” that specialised in health-conscious food delivery.
It is not surprising to hear crypto, blockchain and Web3 protocols fell out of favor with investors last year — however, venture dollar numbers show exactly how unpopular the space became in 2023 among those who write checks. Funding to Web3 startups — defined as those in the crypto and blockchain sectors — fell 74% year to year, with less than $7 billion going to startups in 1,564 deals, per Crunchbase data. In 2022 those numbers stood at $26.6 billion in 2,891 deals.