VNTR Capital News July 9, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – July 9 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 Chapters — After launching chapters in Dubai, London, Lisbon, and Toronto, we are opening up the Chapter Director program, where we partner with local community managers and connectors to build VNTR Investors Membership in major hubs and serve as the Premier Community for VCs, angel investors, family offices and crypto investors. You can learn more about the VNTR Chapter Director role and apply here.
Join VNTR Platform as a Founding Member – We invite you to become a Founding Member of the VNTR Platform and Membership — a space for connection, collaboration, co-investments, and growth. As a Founding Member: connect with fellow investors, share deals, seek assistance, and stay informed about VNTR activities and events.
Create your VNTR Platform Account
Featured Founding PRO Members
Wahid Chammas — Founder and Chief Investment Officer of TyreGate Capital Holdings Ltd, Managing Partner at The Luxury Fund Management and TLF Ventures.
Manmeet Bhasin — Co-founder and Managing Partner of Punja Global, the premier venture capital fund investing in AI/ML.
Eran Elhanani — Co-Founder of BullPerks and GamesPad
Pavel Zeigermaher — Founder and Managing Partner of Intelligent Solution Group, Managing Partner at Vilandes Venture Capital
Last Week
VNTR Threads account – Follow us on Threads, a new social network by Instagram/Facebook.
Storytelling Workshop – Donna Griffit hosted VC Storytelling Workshop with interactive coaching for participating investors. Join the VNTR Platform to view the recording of the workshop. Check out Donna's book, "Sticking to My Story: The Alchemy of Storytelling for Startups."
Cascais — We hosted another successful roundtable for Cascais/Lisbon investors, where we learned more about their activities and the reasons why they moved to Portugal. Among the key reasons are weather, security, and tax benefits.
Singapore — We are interviewing for VNTR Chapter Director for Singapore Chapter, which will launch on Sep 14th during VNTR Roundtable. The primary responsibility of VNTR Chapter Directors is to represent VNTR in their respective cities, organize local events to facilitate networking among engaged investors, foster community growth, and serve as vital connectors within the venture capital ecosystem of their hometowns.
Upcoming
Algarve — We are traveling to Algarve tomorrow to host VNTR Roundtable Algarve on July 12, during Blockdown Festival Algarve July 10-12. (Get 50% OFF using VNTR50 discount code)
London — London Chapter is hosting Members Only VNTR Investors Dinner on July 12 in London Center.
Tokyo — We partnered with WebX Asia to host our first VNTR Roundtable in Tokyo on July 26 as an official side event for investors. (VNTR PRO members get complimentary passes to the conference)
Santa Cruz Bolivia — We partnered with VCiLAT to bring active VCs and angels in LATAM to the conference and host them at VNTR Roundtable Santa Cruz on Aug 16.
Masterminds — We will host 3 Masterminds for PRO Members on July 18-19.
Los Angeles— Next Casting for Crypto Hunters Adventure Reality Show will be held in Los Angeles in July 2023. Don't miss your chance to be part of this epic adventure — Apply for LA Casting!
Thank you to our partners:
Crypto Hunters is a new futuristic reality adventure TV show and immersive mobile game utilizing augmented reality (AR), with the primary objective of promoting widespread adoption and educating the general public about Crypto, Blockchain, NFTs, and Web3. The show aims to engage large audiences globally and increase their understanding of these concepts through captivating challenges and rewards. Currently, Crypto Hunters is in the process of recruiting 20 candidates (10 teams of 2) who will compete across 10 episodes for a chance to win the grand prize of $1 million. The show intends to reach a staggering audience of 500 million viewers, granting them the opportunity to participate in the immersive AR game associated with Crypto Hunters. Viewers can compete for rewards and cash prizes by engaging in various challenges and games. You can apply for the next casting in Los Angeles. For those who can't make it to the casting events, we invite you to join the Crypto Hunters Telegram community. Contact HK to learn more.
EHP is the only three-phase heat transfer technology that contains nanoparticles and a miraculous way to reduce energy consumption. EHP Technology (watch video) is the world's first and only known 5th-generation heat transfer technology, the world's fastest, most affordable, and most efficient heat transfer technology. EHP is the first recycling technology that can reduce up to 70% of our world's global waste heat to go to the air, saving up to 40% of the world's global energy problem. You can contact Anil to learn more.
Upcoming VNTR Capital events:
July 11 VNTR Investors Roundtable Algarve (During Block Down Festival)
July 18 VNTR Mastermind Group A (Online)
July 19 VNTR Mastermind Group B (Online)
July 20 VNTR Mastermind Group C (Online)
July 26 VNTR Investors Roundtable Tokyo (During WebX Asia)
Aug 16 VNTR Investors Roundtable Santa Cruz, Bolivia (During VCiLat)
Aug 16 VNTR Investors Roundtable Toronto (During Blockchain Futurist Conference)
RSVP to Upcoming VNTR Capital Events
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
UPCOMING VC EVENTS
July 10-12 Block Down Portugal 2023, Algarve, Portugal (50% discount using VNTR50)
July 25-26 WebX Asia, Tokyo, Japan (VNTR PRO members get complimentary passes)
July 26 Bloomberg Sustainable Business Summit, Singapore (with VNTR Members access)
Aug 16-18 VCiLat, Santa Cruz De La Sierra, Bolivia
Aug 24-25 Coinfest Asia 2023, Bali
Sep 1-5 IFA Berlin. Germany
Sep 4-5 Seamless, Riyadh, Saudi Arabia
Sep 6-7 DLD, Munich, Germany
Sep 12-14 Dreamforce, San Francisco, USA
Sep 12-19 Berlin Blockchain Week, Berlin, Germany
Sep 12-13 MoneyLive Asia, Singapore
Sep 13-14 Token2049 Asia, Singapore
Sep 18-19 IPEM Paris, France
Sep 19-21 TechCrunch Disrupt 2023
Sep 20-21 DMEXCO, Cologne, Germany
Sep 21-22 Metaverse Summit, Paris, France
Sep 21-23 TechSparks 2023, Bengaluru, India
Sep 24-26 Bits and Pretzels, Munich, Germany
Sep 26-28 Mobile World Congress, Las Vegas, USA
Sep 27-30 Monaco Yacht Show, Monaco
Oct 3-4 CV Summit, Zug, Switzerland
Oct 7-8 DeGameFi, Tbilisi, Georgia
Oct 8-9 Wow Summit, Dubai, UAE
Oct 15-18 Expand North Star Dubai Harbour, UAE
Oct 16-20 GITEX Global, Dubai, UAE
Oct 16-22 NY Tech Week, New York, USA
Oct 20-23 Plan B Forum, Lugano, Switzerland
Oct 22-24 Money 20/20, Las Vegas, USA
Oct 24-25 Blockchain Life 2023, Dubai, UAE
Oct 26-27 World Blockchain Summit, Dubai, UAE
Oct 30-Nov 5 Hong Kong FinTech Week, Hong Kong
Nov 7-10 Nearcon, Lisbon, Portugal
Nov 13-16 Web Summit, Lisbon, Portugal
Nov 13-17 AIBC Europe, Malta
Nov 14-16 SALT iConnections Asia, Singapore
Nov 15-17 Singapore Fintech Festival, Singapore
Nov 30-Dec1 SLUSH, Helsinki, Finland
Dec 8-10 Art Basel, Miami, USA
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and Twitter.
Check out VNTR Capital upcoming events
VC Reads
VC finds its footing as headwinds weaken
The venture capital market has started to stabilize after a sharp correction that began last year. But investors have yet to regain the optimism that fuels startup bull cycles, despite a fervor around generative AI and a comeback for large tech stocks. Here's a first look at US VC data from the Q2 2023 PitchBook-NVCA Venture Monitor, which will be published next week. Investors have shown restraint in deal selection as they weigh current opportunities against the knowledge that future fundraising will be more difficult and startup valuations may continue to drop. US VC-backed companies raised $39.8 billion in Q2, a 48% decline year-over-year. Zooming out, the situation looks less dire: US startups are on track to raise about the same amount as they did in 2020.
Family offices: What an alternative to VC funding can offer founders
Angel investors and VCs aren’t the only folk that back startups. Family offices have also got skin in the game — and they’re increasingly splashing the cash on tech. Across 2021-22, they participated in 541 investments into European startups, according to Dealroom — nearly twice as many as the previous two-year period. But despite pouring money into startups like never before, they’re often a little more bashful than VCs or angels. So, to find out how they work, Sifted spoke to a number of family office managers — and some founders who have convinced them to part with their cash.
Unicorns face mass extinction as funding plummets
Global venture capital (VC) funding has declined sharply in 2023 as investors become increasingly cautious and mark down valuations of unprofitable start-ups and publicly listed tech companies.
Between April and June 2023, global VC investment declined to $64.6bn — down 49% from the same quarter last year, according to Crunchbase data. The latest six-month period was 51% down on the same period of 2022 and 10% lower than the second half of 2022.
The decline of global VC funding, which is part of a correction phase for the technology industry, after over-expansion and record levels of capital deployed during the Covid-19 pandemic, is most pronounced for later stage start-ups.
European tech investors need to up their ambitions
Call it the problem of the missing zero. That, at least, is how the French financier Philippe Tibi defines the scale of Europe’s challenge when it comes to defending the region’s technological sovereignty.
As the US and China pump huge sums of money into their tech sectors, Europe is in danger of stumbling in the global geotechnological race. “In Europe there is a gradual understanding that the order of magnitude for everything is lacking a zero,” Tibi tells me in a video interview. “You do not talk about hundreds of millions, but billions, when it comes to investing in batteries or semiconductors.”
VC Exit Value Sags to Lowest Level Since the GFC
PitchBook projects that exits of venture capital-backed companies will be worth only $20 billion in 2023, the lowest since 2009.
It hasn’t been this hard for U.S. venture capital firms to sell or bring their start-ups public for a decade.
Venture capital firms are on track to exit — sell or bring public — $20 billion worth of companies, the lowest figure since 2009, according to the latest VC report from PitchBook. In the first half of 2023, the value of exits was $12 billion, significantly down from previous years.
US venture capital spending drops sharply in 2Q
US venture capital (VC) investment is stabilizing but the amount of funds raised by VC-backed companies during the second quarter of 2023 posted a significant drop over the same period in 2022, according to new data from PitchBook.
According to a first look at data from the upcoming quarterly PitchBook-NVCA Venture Monitor, set to be published next week, US VC-backed companies raised $39.8 billion during the quarter, a 48% decline year-over-year.
Artificial intelligence (AI) is experiencing an unprecedented wave of interest and adoption. This has been driven in no small part by ChatGPT’s release, along with a subsequent tide of similar, AI-powered applications. Businesses and consumers are using (and talking about) AI on an unprecedented scale. Formerly the domain of futurists and sci-fi writers, AI has firmly planted itself in the mainstream consciousness. AI has long raised fears of a “Skynet” scenario, the “automated defense network” dreamed up by James Cameron for the Terminator franchise. Initially hailed as a new order of intelligence, Skynet’s AI-powered algorithm quickly went rogue, determined that all humans were a threat, launched a nuclear war that eliminated most of the population and subsequently enslaved the rest. Were it not for a series of ex-machina-inspired heroics from a small-but-fierce band of rebels (and Arnold, of course) that would’ve been it for the fate of humanity.
North American Startup Funding Fell Across All Stages In Q2
The good times are not back for North American venture funding. Sure, there may be upbeat signs, like the mounting AI buzz and some resurgence in the IPO and M&A markets. But when it comes to the actual funding tallies, the totals are unequivocally trending lower. How far down? For the second quarter of 2023, investors put $31.8 billion into seed- through growth-stage rounds for U.S. and Canadian startups, according to preliminary Crunchbase data. That’s by far the lowest quarterly total in more than three years. Funding was down at every stage both quarter over quarter and year over year, with the most pronounced decline at later stages (Series C and beyond). In addition to putting less money to work, investors completed the lowest number of deals in two years.
Korean startups feel bite of funding drought in H1
The drought in venture capital funding worsened in South Korea in the first half of this year, taking an especially heavy toll on platform and bio startups but manufacturing and content companies with profitable business models are expected to revitalize the VC market later this year.
According to Korea-based startup and venture capital tracker The VC on Friday, Korean startups and SMEs attracted 2.82 trillion won ($2.2 billion) in total in the January-June period this year, down 72% from the same period last year.
Their total fundings were also more than halved from 1,177 cases to 547 over the same period.
VC funding retreats from African market
The global venture downturn has arrived in Africa as the continent records its second consecutive quarter of falling deal count. African startups raised a collective $1.1 billion across 212 rounds in the first six months of the year, according to PitchBook data. In Q2, deal count retreated to pre-2020 levels, but capital raised actually began climbing again after a slump that started in Q4 2022. Investors in the region were already anticipating a more muted dealmaking environment this year, with foreign investment in the continent expected to retreat to core markets. But while it has seen a slowdown, Africa is weathering the storm better than more mature markets. Here's a look at Africa's venture ecosystem, showcasing key trends across dealmaking, fundraising and exits.
How Europe went from tech outsider to global challenger in the last two decades
Europe finally has the pieces in place to challenge the US as the world’s leading tech ecosystem and to potentially overtake it within the next 20 years, according to analysis from Creandum, Spotify’s first investors, and Dealroom. The venture capital firm Creandum has found that Europe’s tech sector is in the best shape of its life, after analysing the evolution of the sector over the last 20 years. Europe’s wealth of experienced VC investors, the talent amongst its 600 million plus population, the flywheel effect of creating many globally successful tech companies, entrepreneur role models and the region’s dominance across emerging sectors all mean Europe is ready for its best decade yet in creating the world’s leading tech companies. The flywheel of entrepreneurship has been spinning fast in Europe, but there is still much potential to be unlocked. Recent startups and their founders have achieved companies with higher valuations, setting Europe up for even greater growth and dominance in the future. Some of the findings of the Creandum report highlights how Europe’s total number of unicorns has grown 88% compared to the US’ 56% since 2014.
India’s venture capital funding plummets by 79 per cent in H1 2023; fintech and edtech hit hardest
India’s venture capital (VC) landscape experienced a drastic downturn in the first half (H1) of 2023, with investments plunging by an alarming 79 per cent compared with the same period last year. The impact was particularly bad in sectors like fintech, edtech, and enterprise-tech, according to multiple reports.
According to data from Venture Intelligence, total investments in H1 2023 amounted to $3.8 billion, a stark contrast to the robust $18.4 billion secured the previous year. The number of deals, meanwhile, plummeted to a mere 293, a 60 per cent decrease from 727 seen the previous year.
European companies claim the EU’s AI Act could ‘jeopardise technological sovereignty’
Over 150 executives from companies like Renault, Heineken, Airbus, and Siemens have signed an open letter urging the EU to rethink its plans to regulate AI.
Some of the biggest companies in Europe have taken collective action to criticize the European Union’s recently approved artificial intelligence regulations, claiming that the Artificial Intelligence Act is ineffective and could negatively impact competition. In an open letter sent to the European Parliament, Commission, and member states on Friday, and first seen by the Financial Times, over 150 executives from companies like Renault, Heineken, Airbus, and Siemens slammed the AI Act for its potential to “jeopardise Europe’s competitiveness and technological sovereignty.”
The 10 Biggest Rounds Of June: Inflection AI’s Huge Raise, CleanCapital Cleans Up
While June certainly had its fundraising ups and downs, it ended with a flourish thanks once again to AI and a big $1 billion-plus round.
Aside from the two AI rounds that bookend this list, it was a huge month for biotech and health care, which had four entries on the list. Even a mining and adtech startup made it into the top 10 for the month.
‘Excited’ And ‘Scary’: After Sizzling First Half, Don’t Expect AI Investment To Cool Off
Artificial intelligence hasn’t just dominated the tech world through the first half of this year — its use and applications have dominated the buzz in nearly every aspect of our lives from employment to dating. That certainly has been true in the venture capital and investing world as well, as one huge funding round has been followed by even bigger ones, and seemingly every startup has scrambled to call themselves “AI-enhanced” or “AI-powered.” “It both excites me and scares me at the same time,” joked Mark Sherman, managing director at Telstra Ventures, about investing in the AI sector in the current environment. “There are people definitely looking to grab certain segments (of AI) that could enjoy doing something similar to what OpenAI has done,” he added. “Some segments will, and others will be shown to have false momentum.” VCs and corporations have poured money into the space through the first half of the year, spending big on generative AI platforms, support infrastructure and specific AI applications in certain sectors like health care and biotech.
How Argentina’s inflation is helping altcoins and the crypto market
On today’s Macro Markets show, veteran stock market and Cointelegraph analyst Marcel Pechman starts by analyzing Argentina’s 150% inflation, which proves that people continue to work and consume (somehow) even if their local currency loses its value. What is the lesson here? For starters, everyone wants free money. That explains why altcoins and airdrops continue to attract attention, regardless of whether the majority of investors end up being unprofitable. You might think that those investors would quickly learn their lesson, but in reality, quite the opposite occurs. All it takes is a new marketing strategy — a new way of promising free money — just like the Argentines have a tendency to forget the mess the governments have caused over the course of 10 years. For Pechman, the bottom line is: Forget any promise of free money or dividends that don’t come explicitly from economic activity.
Venture capital activity takes a Q2 tumble
Global VC disbursements decreased by a greater percentage between April and June than did global M&A, with $87.4 billion representing a 42.8% year-over-year decline, per data released this morning by PitchBook.
The number of deals was off 38.7%, signaling a slight increase in average deal size.
U.S. deals took a particular hit. Not only were they down 48% year-over-year, but also down 13.1% from Q1 2023, whereas global deal volume climbed 1% quarter-over-quarter.
Towards a More Responsible AI
Artificial intelligence (AI) is experiencing an unprecedented wave of interest and adoption. This has been driven in no small part by ChatGPT’s release, along with a subsequent tide of similar, AI-powered applications. Businesses and consumers are using (and talking about) AI on an unprecedented scale. Formerly the domain of futurists and sci-fi writers, AI has firmly planted itself in the mainstream consciousness.
AI has long raised fears of a “Skynet” scenario, the “automated defense network” dreamed up by James Cameron for the Terminator franchise. Initially hailed as a new order of intelligence, Skynet’s AI-powered algorithm quickly went rogue, determined that all humans were a threat, launched a nuclear war that eliminated most of the population and subsequently enslaved the rest. Were it not for a series of ex-machina-inspired heroics from a small-but-fierce band of rebels (and Arnold, of course) that would’ve been it for the fate of humanity.
Deeptech startup founders can now apply to use CERN’s world-famous technologies
The European Organisation for Nuclear Research, known as CERN, is opening access to some of its cutting-edge technologies to selected deeptech startups as part of a new programme dubbed CERN Venture Connect (CVC). The research institute has developed incredibly sophisticated research tools, and is hoping that these technologies can be re-used to build real-world business applications in fields ranging from healthcare to quantum computing. For now, CERN is sharing five technologies with founders, including laser technologies, cryogenics, data management tools and precision-synchronisation instruments. But the organisation is planning to open access to more as the programme expands. With a good enough use case, selected founders could even apply to use CERN’s particle accelerators, although it's unlikely many founders will be seen playing around with the institute’s flagship 27-km long Large Hadron Collider. As Ash Ravikumar, who oversees the programme as CERN’s entrepreneurship development officer, puts it, for most applications that would be like using “an axe to cut a flower”.
Mid-Year Report: Who Could Still Go Public In 2023?
What does the IPO market look like in the second half of 2023? While IPOs came to a screeching halt last year, we’ve seen a few promising public offerings in the first half of 2023. Johnson & Johnson spinoff Kenvue, for instance, was valued at $50 billion after it went public on the New York Stock Exchange earlier this year. Tons of startups are eager to make their public debuts. Mature startups including Stripe and Shein have reportedly mulled over their IPO strategies. Other startups are starting to run out of cash as venture investors pull back — a phenomenon exacerbated by the collapse of preeminent startup bank Silicon Valley Bank earlier this year. But IPOs are still few and far between, and those that choose to brave the public markets will have to accept that the sky-high public debuts of 2021 likely won’t happen this year. An unprecedented 414 U.S. startups went public in 2021, per Crunchbase data, but that number decreased to 93 in 2022. As of now, only 29 startups have made their public debut this year.
AI Was Q2’s Big Hope To Reverse The Global Venture Funding Slowdown. It Wasn’t Enough
Startup investors globally continued to scale back their pace in the second quarter of 2023 despite large funding and M&A deals in the artificial intelligence space. Global venture funding in Q2 2023 fell 18% quarter over quarter to $65 billion, Crunchbase data shows. That’s down 49% compared to the second quarter of 2022, when startup investors spent $127 billion. The first half of 2023 is down by similar proportions. In H1 2023, global funding reached $144 billion, marking a 51% decline from the $293 billion invested in H1 2022 and a 10% decline from the second half of 2022. The slowdown happened despite three notable events in H1: Large rounds to AI-driven companies led by corporate investors Microsoft, Nvidia and Google alongside venture firms; the billion-dollar acquisition of language model training platform MosaicML by data warehouse company Databricks; and the precipitous stock market climb of Nvidia, whose chips power much of the computing to train large language models.
The Real Use Case for CBDCs: Dethroning the Dollar
Much like the cruel joke Charles de Gaulle reportedly cracked about Brazil – that it’s “the country of the future and always will be” – predictions of an end to the dollar-based international monetary system seem to belong to a future that will never arrive. Yet that future is coming, faster than all the prior failed forecasts of the end of dollar hegemony would have you think. In contributing to that shift, Brazil may have the last laugh. The catalyst can be found in central bank digital currencies (CBDCs), a model for digital fiat money that was, ironically, spurred by governments’ reaction to the 2008 invention of the decidedly anti-fiat Bitcoin protocol. Bitcoin fanatics tend to pooh-pooh CBDCs as centralized tools for government manipulation that local populations will recoil from. In dismissing them, they overlook the massive cross-border shifts these new tools will foster at the macro level.
How to identify, interview and hire a head of growth for an early-stage startup
The waters are never calm when scaling a startup. In fact, they are typically quite choppy. However, by making the correct hire in the head of growth position, you can navigate to shore much more smoothly. The individual you’re looking for will create and execute growth strategies, manage marketing initiatives and, ultimately, drive revenue. My more informal take on this role is that it’s someone who deeply understands growth fundamentals, has significant expertise in one to two growth pillars and knows how to build an effective team. I’ll walk you through when and how to hire your head of growth, their archetypes, how this role stands apart from other marketing executive positions, and what to expect from this hire during their first few quarters.
Why Do VCs Love Electric Car Batteries As Much As Joe Biden Does?
It seems like the U.S. tech industry, which has made leaps in smartphone technology, cloud computing and artificial intelligence, now wants to conquer something new: batteries. Specifically, batteries for electric vehicles. Amid all the hullabaloo around generative AI, the fall of crypto, and the head-scratching discourse around Web3, somehow, electric vehicle batteries are seeing steady — and favorable — funding in the past few years, per Crunchbase data. Despite a 43% decrease in funding between 2021 and 2022, electric vehicle battery manufacturing still saw more funding in 2022 than it did in 2020. Last year was the sector’s second-best funding year since 2014. What’s even more interesting is how much of this funding is flowing to the U.S., despite the fact that China dominates the global battery manufacturing sector. In 2020, only around 20% of all funding to the sector went toward U.S.-based companies. But in 2021, 64% of all funding to the sector was funneled into U.S.-based companies, per Crunchbase data. In 2022, that number rose to 70%.
First Cut — State of Private Markets: Q2 2023
Across all funding stages, Q2 valuations came in above those of Q1. Series B and C in particular saw substantial gains over recent lows in median pre-money valuations. Median round sizes saw more muted increases across the venture ecosystem. Although the final numbers on total rounds and capital raised are not yet available for Q2, they are almost certain to come in above Q1 on both counts.
Herd mentality is alive and well as VCs chase AI craze
Last month, a story popped up on my news aggregator about a four-week-old startup yet to develop its first product that has raised over $100 million in venture funding. At first I dismissed the story thinking that it was old news. But upon closer inspection, I was surprised to see that Mistral AI's funding announcement was not from June 2021, when markets were hot, but from midyear 2023. AI startups have seemingly defied the overall decline in VC funding of the past 18 months, collectively raising $15.5 billion this year, according to PitchBook data. Even when you exclude OpenAI's $10 billion round, the sector's VC funding in 2023 has surpassed last year's total and is well over halfway to 2021's peak of $9.1 billion. On top of that, deal pace has remained steady and median post-money valuation is up 109.8% from last year. While VCs have become more cautious with the downturn, the eagerness of some investors to plow capital into very early stage AI startups suggests that some of the exuberance of 2021 remains.
Emerging managers' fundraising slump is a blow to smaller VC ecosystems
Emerging managers in the US are on track for their worst fundraising performance in seven years, with total commitments expected to come in below $20 billion. This difficult fundraising environment is likely to exacerbate regional schisms and create more competition between already cash-hungry startups. Historically, emerging firms have invested in niche areas and early-stage startups, while also focusing on geographically underrepresented areas, like those outside of San Francisco and New York. PitchBook defines emerging managers as firms that have launched fewer than four funds.Emerging managers are also known to partner with larger, experienced firms to help scout out startups. Ultimately, if emerging managers' challenges continue, there is a risk the VC ecosystem will shrink, limiting innovation and dealmaking, according to PitchBook analyst Max Navas, who authored a recent report on the subject.
Deal Dive: Startups can still raise capital — even if it’s for a good cause
When venture funding started to slow in 2022, many feared that investors would retreat to where they were comfortable: SaaS companies founded by folks in their network. And any company that wasn’t posting top growth metrics would struggle to secure funding. While this has largely been true, there have been bright spots. Everytable’s recent round is one of them. The mission-driven food tech startup looks to make healthy prepared food, including wraps and salads, as accessible and affordable as fast-food chains. The startup prices its menu based on where each individual store is located in addition to distributing through a variety of other channels, including branded vending machines and delivery. On June 27, the startup announced a $25 million Series C-2 round led by Dohmen Impact Investment Fund, which backs for-profit companies building food solutions to enhance human health, in addition to existing investors. This round will help the company expand its retail footprint; Everytable hopes to open up 25 stores in the latter half of 2023.
Venture capital funding plunges globally in first half despite AI frenzy
Venture capital funding globally almost halved in the first six months of 2023, data from research firm PitchBook showed, highlighting a lack of enthusiasm on the part of investors as well as less demand amid sharply higher interest rates. The 48% decline in investment to $173.9 billion and the 19% drop-off in deal numbers comes despite huge interest in artificial intelligence startups sparked by the success of OpenAI's ChatGPT. Investors poured more than $40 billion into AI startups in the past six months, the data showed. That includes a $10 billion investment by Microsoft in OpenAI and $1.3 billion in funding for rival Inflection AI. By region, Latin America had the biggest drop with an 86% slump while the U.S. and Europe fell 65% and 69% respectively. Investors say that not only have higher interest rates caused a rethink of valuations, the current IPO drought and lack of other exit opportunities has made them more selective.
ETF approval may boost Bitcoin’s liquidity, but it won't be a game changer — JPMorgan
A possible approval of a spot Bitcoin exchange-traded fund (ETF) won’t be a game changer for crypto markets, although it might benefit the leading cryptocurrency, according to a report by JPMorgan managing director Nikolaos Panigirtzoglou. Based in London, Panigirtzoglou is part of JPMorgan’s global market strategy team. He believes that a Bitcoin ETF in the United States would have a similar impact as those seen in Canada and Europe, where spot Bitcoin ETFs have been around for some time. According to the report seen by Bloomberg, Bitcoin ETFs have overall “attracted little investor interest” in other jurisdictions in the past two years, further “failing to benefit from investor outflows from gold ETFs.” The strategist also sees the benefits of a Bitcoin fund receiving the green light in America. According to Panigirtzoglou, an approval could bring more liquidity to Bitcoin markets but could also lead to a migration of trading activity from BTC futures products.