VNTR Capital News March 28, 2023 - News, Events, VC Reads
Venture Capital, Web3, and Private Equity - March 28 News, Events, and VC Reads
VNTR Capital Newsletter is delivered to 30k+ investors weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
VNTR Weekend Summer Retreats — Looking for exciting summer plans? Join us for VNTR Weekend Summer Retreats! We're organizing 3-day weekend retreats in top European beach destinations so our community can come together and have some fun in the sun. Apply to join
Hong Kong — If you're in Hong Kong, be sure to stop by our VNTR Investor Roundtable on March 30th, which is an official side event for WOW Summit Hong Kong. Approved attendees will receive complimentary Investor Passes.
Silicon Valley — For those in Silicon Valley, we're thrilled to announce our VNTR Investors Roundtable on April 12th. This will be our first event in Silicon Valley since the pandemic began, so we're excited to be back.
Austin — If you're heading to Consensus by Coindesk in Austin , join us for our official side event, VNTR Investors Roundtable Austin, on April 27th.
Rio De Janeiro — We are expanding to Latam with our first event in the continent on May 2.
VNTR Membership — VNTR Community Masterminds our bi-weekly facilitated roundtable discussions designed to help members achieve their goals and overcome challenges. These sessions provide a safe and supportive space for members to share what they're working on, their goals, and any obstacles they may be facing. Our members serve as sounding boards for each other, offering feedback, insights, and advice to help everyone move forward with confidence. Don't miss out on this valuable opportunity to connect with like-minded individuals and advance your personal and professional goals as an investor. Join VNTR Membership
Featured New PRO Members:
Thank you to our partners:
Crypto Hunters TV Show is an innovative adventure-reality series that uniquely explores cryptocurrency and the blockchain world. The show provides an exciting combination of action, education, and entertainment as contestants embark on a thrilling global adventure to uncover the secrets of the crypto world. With a focus on accessibility and entertainment, the show aims to make the excitement of cryptocurrency accessible to a broader audience. To complement their strategy for untapped markets, the Crypto Hunters Mobile Game App will also be available. The game will be directly connected to the Crypto Hunters TV show and advertised prominently. Learn more and contact HK.
Changex is a unique personal finance mobile app that connects crypto and DeFi to the real world via in-wallet banking. The company is building a swiss knife financial solution by providing access to multi-chain crypto trading, proprietary products such as Leveraged Staking to leverage any POS asset, and a Crypto Debit Card for unprecedented utility. Learn more and contact Gary.
Paypolitan is offering an all-in-one payment app: users can add various wallets or existing bank accounts to the app and pay. Paypolitan is a non-custodial solution aggregating existing sources of funding. The users’ funds stay where they are and the Paypolitan app simply initiates the payment from the source of funding to the destination account. Paypolitan is therefore using Open Banking APIs (EU directive PSD2 compliant) and is one of the first movers adopting it in Europe. Learn more and Contact Marco.
Upcoming VNTR Capital events:
Mar 30 VNTR Investors Roundtable Hong Kong (During Wow Summit)
Apr 12 VNTR Investors Roundtable San Francisco (During Startup Grind)
Apr 27 VNTR Investors Roundtable Austin (During Consensus)
May 2 VNTR Investors Roundtable Rio De Janeiro (During Web Summit Rio)
Jun 1 VNTR Investors Roundtable Marrakech (During GITEX Africa)
Jun 8 VNTR Investors Roundtable Madrid (During South Summit)
RSVP to Upcoming VNTR Capital Events
The VNTR Capital Investors Community has a growing membership of 350+ qualified investors, actively investing in high-growth technology companies as VC/Crypto Fund managers, angel investors, and family offices.
Follow us on Social media: Instagram, LinkedIn, Facebook, and Twitter.
UPCOMING VC EVENTS
Mar 29-30 WOW Summit Hong Kong
Mar 20 Global Startup Awards Grand Finale, Copenhagen, Denmark
Apr 11-12 Startup Grind, Silicon Valley, USA
Apr 19-20 Bloomberg New Economy Gateway Europe, Dublin, Ireland
Apr 20-23 Emerge Americas, Miami, USA
Apr 26-28 Consensus by CoinDesk, Austin, USA (25% discount with C23VNTR code)
Apr 27-28 TechChill, Riga, Latvia
May 9-10 OMR Festival 2023, Hamburg, Germany
Ma 12-14 TMRW Belgrade, Serbia
May 15-19 AIBC Americas, Sao Paolo, Brazil
May 16-18 SALT New York
May 16-27 Cannes Film Sestival, Cannes, France
May 18-20 Bitcoin, Miami, USA
May 19-20 Glitch Korea, Seoul, South Korea
May 24-25 Next Block Expo, Warsaw, Poland
May 25-28 Monaco Grand Prix, Monaco
May 28-29 Emerge Dubai, UAE
May 30-Jun 4 Tech Week San Francisco, US
May 30-Jun 2 Innovex, Taipei, Taiwan
May 31-Jun 2 GITEX Africa, Morocco
Jun 5-Jun 11 LA Tech Week, Los Angeles, US
Jun 7-9 South Summit, Madrid, Spain
Jun 9-10 Epic Web3, Lisbon, Portugal
Jun 12-13 Metaverse Summit, Paris
Jun 14-17 Viva Technology, Paris
Jun 25-25 Silicon Valley Comes to Tel-Aviv
Jun 26-29 Collision, Toronto, Canada
July 6-7 Block3000, Lisbon, Portugal
July 19-22 AIBC Manila, Phillipines
Oct 7-8 DeGameFi, Tbilisi, Georgia
Oct 15-18 Expand North Star Dubai Harbour, UAE
Oct 16-20 GITEX Global, Dubai, UAE
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, and Twitter.
Check out VNTR Capital upcoming events
Here’s What Every Founder Should Be Asking Their VCs Right Now
During times of economic uncertainty like those we currently face, founders must overcome numerous challenges in managing their businesses, teams and investor relations. Cash flow becomes critical, sales may be declining, and fundraising can be more difficult. In such situations, founders need support from their VCs to survive and thrive in the long run.
However, this support is not automatic, and founders need to know what questions to ask their VCs to ensure they are getting the support they need. During a downturn, cash is king and startups need to manage their cash flow carefully to survive. Founders need to ask their VCs for help in assessing their cash runway, which is the amount of time the startup can survive with the cash it has on hand. VCs can provide valuable guidance on how to extend the runway by reducing expenses or generating additional revenue. These conversations can also be essential building blocks for bridge-round deals.
The 10 most active VCs in European early-stage deals
European early-stage venture deals are expected to continue to fall in number this year as the downturn slows dealmaking. So far this year, €3 billion (about $3.2 billion) has been invested in 553 early-stage rounds in Europe, according to PitchBook data. With the quarter nearly over, deal count in Q1 could register its lowest value since 2014. There have still been some large early-stage rounds in Europe this year. In February, life sciences startup Hemab Therapeutics raised a $135 million investment led by Access Biotechnology, while financial lending platform Carmoola secured a £103.5 Series A led by QED Investors. Larger deal sizes have been helped by an influx of competition in the early stages as investors seek investments further away from exit and the volatility of the public markets. Here are the 10 most active VC investors in European early-stage deals from the past five years.
Startup Wrap: Saudi leads the way in flurry of regional activity in startups ecosystem
The Middle East and North Africa region witnessed staggering activity in the startup and venture capital space last week spearheaded by Saudi Arabia. The region’s startup ecosystem experienced debt and equity financing with one mega round as well as cross-border investments. For its part, Saudi Arabian startups managed to secure a large bulk of funding while UAE-based startups also participated with a fair share.
Nasdaq to launch crypto custody services by end of Q2: Report
As reported by Bloomberg, the exchange group has applied for a limited-purpose trust company charter from the New York Department of Financial Services, which would oversee the new business. Nasdaq’s senior vice president and head of Nasdaq Digital Assets, Ira Auerbach, reportedly disclosed this in an interview in Paris, stating that the group is committed to ensuring all necessary regulatory approvals and technical infrastructure are in place. Initially announced in September, the project will be the exchange operator’s first major venture into the crypto industry. The first step for Nasdaq’s digital assets division will be to safeguard Bitcoin with plans to eventually build a broad suite of services for the group’s digital assets division, including execution for financial institutions, Auerbach reportedly shared.
PE's gigantic fund targets loom large as fundraising slows
In the US and abroad, the biggest private equity players' target fundraises are engulfing their predecessors. But those goals appear increasingly daunting. Private market fundraising has slowed in recent months, dropping by over $1 billion total capital raised from 2021 to 2022. But it remains at historically high levels, and the world's largest investors are aiming even higher moving forward. Most of the fundraising activity is concentrated in the world's largest funds. In 2022, the top 10 closed PE funds represented over a third of total capital raised, according to PitchBook's 2022 Annual Global Private Market Fundraising report. The largest fund close last year was Boston-based manager Advent International's GPE X Buyout fund, which closed at $25 billion last May.
Are solo GPs screwed?
Entrepreneur Ankur Nagpal raised a $70 million venture fund last year, called Vibe Capital, from over 200 investors. But now, as the market shifts and LPs are less interested in venture capital, the Ocho founder is shrinking the fund side by roughly 43%, canceling capital calls, and, ultimately, sending back money that had already been wired to the fund. The contraction, Nagpal told TechCrunch, occurred because he’s busy building his own startup and the funding environment has shifted to more realistic expectations: “What looked like a $10 billion outcome is now a $1 billion dollar outcome.” As a result, he says he’s more confident on returning a higher multiple if he’s investing from a smaller fund size. His LPs were surprised but “super happy” to get the capital back, Nagpal said. Since announcing the cut, the founder says that five different solo GPs have messaged him asking for introductions to LPS who just got capital back. “I think the reality is a lot of these people who are getting money back are actually not going to allocate it to venture anymore.” One of Nagpal’s biggest investors is Tiger Global, which has become notorious for retreating from venture fund bets.
Advice to Startup Founders and Employees: Strength Doesn’t Always Come in Numbers
The narrative fallacy in Silicon Valley, and venture capital broadly, is that venture investing is an artisanal business, made up of good “pickers” that have a nose for special founders, and at times, are known for putting intangibles above prudent risk management.
The reality is much more complicated. Very few funds actually drive returns in the venture industry – specifically, the top 10% of funds account for roughly 75% of distributed VC returns. The industry as a whole has typically followed the pack leaders, investing in many of the same startups and areas of the technology industry, giving credence to the “herd mentality” stereotype.
The fact is that it’s been relatively difficult to separate signals from the noise over the past decade. The tech economy has massively benefited from the tailwinds of zero interest rates and loose monetary policy. As a result, we saw unprecedented funding rounds, soaring valuations, and all-time highs across nearly every tech-related asset class.
Venture capitalists race to land next AI deal on Big Tech's turf
In December and January, several venture capitalists from the U.S. and Britain raced to Paris to vie for a stake in a new artificial intelligence company that could reshape how people work. The startup they courted, Dust, consisted of just two people. It had not been incorporated yet. And it rejected a generous proposal by top investment firm Coatue Management among other offers, three people familiar with the deal told Reuters. Sequoia Capital won, two of the people said, leading a sizable "seed" fundraising round of $5 million. Dust aims to build AI tools that improve white-collar workers' productivity.
Banking crisis puts pressure on PE money supply
The banking crisis is set to perpetuate private equity firms' financing challenges as more traditional lenders withdraw from the market. The collapse of Silicon Valley Bank and Signature Bank, along with the rushed acquisition of Credit Suisse, has shaken industry faith in banks. As a result of the crisis and the Federal Reserve's interest rate hikes that began last year, GPs that rely on banks' lending arms are getting more creative in their capital deployment and moving to the lower end of the market for deals."There are very few primary effects on private equity, but there are secondary and tertiary effects," said Sean Mooney, founder and CEO of BluWave, a private equity platform. "It's going to become a money supply issue."
Crypto Is the Solution to Bank Runs, Not the Cause
Over the last few weeks, we saw Silicon Valley Bank close and get taken over by the Federal Deposit Insurance Corporation, which guaranteed deposits and put it up for auction. We saw runs and failures at more banks, including Silvergate Bank and Signature Bank, spurring fear of runs at others like First Republic Bank. And we’ve seen the bank contagion move across the pond to Europe – specifically Credit Suisse, to which the Swiss central bank recently granted a loan of 50 billion Swiss francs. But the closure of Silvergate Bank and Signature in particular, the top two banks that worked with crypto companies, gave the impression that the U.S. government wants to push crypto out of the country.
Troubled Toshiba agrees to record $15B+ PE take-private
Toshiba has accepted an offer from a group led by Japan Industrial Partners in what would be Japan's biggest PE-backed take-private. The consortium first offered to buy the struggling industrial giant in October and then made a formal offer of 2 trillion yen (around $15.3 billion) Feb. 9 after securing $10.7 billion in loans. If completed, the deal promises to conclude years of turmoil for Toshiba. Last month, the company's COO resigned over an expenses scandal and, days later, Toshiba reported a 90% drop in its quarterly operating profit, further tanking its share price. However, the company's troubles date back to 2015, when it first got embroiled in an accounting scandal. The following year, Toshiba had to write down its nuclear business after it was badly affected by the 2011 Fukushima earthquake.
‘US has left a vacuum that other countries are eager to fill’: Coinbase
With Coinbase seemingly on the verge of a court battle with the United States Securities and Exchange Commission (SEC), the firm has emphasized that the U.S. government’s hawkish approach to crypto regulation has “left a vacuum that other countries are eager to fill.“ The SEC issued Coinbase a Wells notice on March 22 outlining that SEC staff had recommended the agency take enforcement action over “possible violations of securities laws” concerning some of the firm’s asset listings, staking services and Coinbase Wallet. In a March 23 blog post titled, “Europe is winning. Will the US catch up?” Daniel Seifert, Coinbase’s vice president and regional managing director in Europe, stressed that the U.S.’s “regulatory approach to crypto has been marked by regulation by enforcement,” despite industry-wide calls for “comprehensive crypto regulation.”
Rounds that matter: Fintech’s fortunes, DAO dreams, Asia’s reseller revival
Despite the slowdown in venture capital activity, there’s still a mountain of money flowing through startups today. TechCrunch+ is launching a series of posts looking at recent, notable venture rounds, exit activity and other news that relates to the financial side of building new technology companies. While banks are dealing with the crisis kicked off by the failure of well-known, startup-friendly Silicon Valley Bank, upstart tech companies are still more than busy raising capital. They’re also looking for exits. More former than the latter, given the frozen IPO market. But while we wait for the reawakening of a key exit point for startups, we can still keep tabs on where and how the money is flowing into their world.
The a16z Marketplace 100: 2023
After three years of extreme economic volatility, this year’s Marketplace 100 provides a clear-eyed look at where marketplace businesses are trending in a reopened world. In this, our fourth annual ranking, the data revealed some of the most interesting takeaways to date.
The 2023 Marketplace 100 features nearly three dozen newcomers, including marketplaces for refurbished electronics, precious metals, and sustainably raised meat. Consumers sought out both vetted vacation villas and used car parts. And perhaps less surprisingly in a virus-weary world, there’s a lot of money flowing into both live events and therapy—but not in the way you might think.
As always, the Marketplace 100 stacks up the largest consumer-facing marketplace startups and private companies based on annual gross merchandise volume, or GMV. Unlike previous years, however, this year’s list is powered by Consumer Edge, a data analytics provider that gives insights into global consumer spending behavior. This new partnership affords a more comprehensive view across a greater breadth of companies than years past.
SVB collapse could mean $500bn venture capital 'haircut'
The $2 trillion venture capital industry could see portfolio markdowns of 25 per cent to 30 per cent — a “haircut” of possibly $500 billion — following the Silicon Valley Bank debacle, according to Bloomberg Intelligence. “After the failure of SVB, we expect greater valuation scrutiny and disclosure, especially as a large chunk of ‘fiduciary’ capital from pension funds has flowed into these markets — and unlike endowments and family offices, there are no avenues to extend and pretend,” Bloomberg Intelligence analyst Gaurav Patankar writes in a note on Friday. Some VC and private equity firms are turning towards strategies to “extend” and “pretend,” meaning they would hold on to assets or prop up capital to avoid true price discovery, Mr Patankar added.
Getting To Series A Has Gotten Harder
For seed-funded startups, the odds of graduating to a Series A round have never been particularly favorable. But as venture funding contracts, the chances have gotten even slimmer. That’s the broad finding from our latest perusal of U.S. Series A funding, which shows that investment is on track to hit the lowest quarterly total in over two years. Things have been heading lower for a while now. Per Crunchbase data, Series A investment has fallen for five consecutive quarters, since peaking in late 2021. Even though funding is down, there’s still an enormous chunk of change going into Series A. So far this year, investors have poured close to $4.5 billion into the deals at this stage nationwide.
Current Climate: Venture Capitalists Put $16.2 Billion Behind Clean Energy In 2022
Earlier this month, analyst firm Pitchbook published its analysis of venture investments into clean energy in 2022. The firm found that 2022 was a record year for the sector, with investments hitting $16.2 billion for the year, just barely topping 2021’s $16 billion. A driving factor behind part of the surge in investment was the war in Ukraine, which highlighted the need for energy resilience. That said, as the year went on and the energy sector looked more stable, the fourth quarter saw a year over year drop of 46.5% in terms of venture capital raised in the sector. The report highlights two areas that saw major deals in the fourth quarter and seemed poised for further growth: green hydrogen and grid-scale batteries for renewables. Another area of interest for VCs are companies involved in management and analytics of the power grid.
Even As Funding Dips, Top Web3 Investors Remain Active
A year ago, Web3 was one of the buzziest words in the tech ecosystem. Much of that hype has died down a year later, but the biggest investors in the space have remained very active. While overall funding in Web3 was down last year from 2021, several top investors in the space such as Shima Capital, Animoca Brands and Y Combinator saw their numbers tick up in 2022, according to Crunchbase data. In fact, about a dozen investors made 40 or more deals in the Web3 space last year — and for most that was an increase from 2021. Those numbers are similar when also looking at firms that led or co-led the most rounds last year. Polychain led the way last year with 30 rounds led or co-led — per Crunchbase — just a slight drop from the 32 rounds the firm did in 2021. Others such Pantera Capital and Animoca Brands actually upped their numbers from 2021, both leading or co-leading more than 20 rounds.
A devastating impact’: SVB’s collapse leaves start-ups with a funding hole
In late 2020, Silicon Valley Bank vice-president Armando Argueta offered a word of caution to any start-up founder considering loans from less-established lenders.
“Many players come and go in the venture debt market, so make sure that whomever you are talking to is a long-term player. When a bank decides one day that it is no longer interested in lending venture debt, it can wreak havoc on your business,” he wrote in a post on SVB’s website.
Since SVB’s collapse this month, founders are learning the hard way how true those words are. The bank was the pioneer and linchpin of a venture debt market that gave start-ups an alternative source of funding, without the need to sacrifice equity stakes or swallow a much lower valuation.
Credit Suisse Also Played An Active Role In Startup Financing
When it came to startup funding, Credit Suisse was no Silicon Valley Bank. That said, the troubled Swiss banking behemoth, which was just acquired by rival UBS, was no slouch in the venture investment and debt arena either. Per Crunchbase data, Credit Suisse participated in at least seven venture or debt financing rounds for startups in the past year, including six that it led. Four of the financings were for U.S. companies, while three were for European startups. Some of the Credit Suisse-led financings were pretty large ones, for companies including: Curve, a London-based credit card and digital wallet platform offering cash and crypto rewards, closed on $1 billion in loans in December with a facility provided by Credit Suisse.
Bitcoin Was a Winner During the U.S. Banking Crisis, but Illiquidity Prevents It From Being a USD Hedge
If there was a bitcoin marketing team, the last month would be as good as it gets for them.
Confidence in banks in the U.S. and Europe has been decimated and people are scrambling for an alternative to protect their dollars. Enter bitcoin (BTC), an asset that was created for entirely this purpose – a truly decentralized form of money that can’t be controlled by any entity. At first glance, the recent banking crisis seems like the perfect catalyst for a BTC price rally. However, digging a bit deeper into the reasons for the move points us in the direction of liquidity, and more specifically, lack thereof. While the narrative makes sense and has resulted in a lot of people looking for bitcoin at the exact same time, illiquidity has almost certainly been a strong price propellant.
Vinod Khosla: Indian start-ups with strong fundamentals will get funding
Indian start-ups with "strong fundamentals" will continue to be funded even as investor exuberance wanes, says Indian-origin Silicon Valley veteran Vinod Khosla.
Mr Khosla, who co-founded technology giant Sun Microsystems in 1982, was speaking to the BBC about the likely impact of the current financial climate on the start-up ecosystem in India and globally, and the recent problems in the banking sector.
The US Federal Reserve has been raising interest rates in a bid to stabilise prices, but this has caused strains in the banking system - two US banks, including Silicon Valley Bank which lent largely to the tech sector, collapsed earlier this month. Many central banks have also announced measures to keep credit flowing through banking systems.
Malaysia's private equity and venture capital funding up 8.43 pct to $3.64B in 2022
Malaysia’s private equity (PE) and venture capital (VC) funding rose 8.43 percent to MYR16.08 billion ($3.64 billion) in 2022 from MYR14.83 billion ($3.35 billion) a year ago, according to the Securities Commission Malaysia (SC)’s Annual Report 2022 released on Monday.
The SC said in the report that total committed funds in the industry as at the end of 2022 stood at MYR10.71 billion ($2.42 billion) and MYR5.37 billion ($1.21 billion) for PE and VC respectively.
For PE, commitments are sourced largely from corporate investors (33.40 percent), individuals and family offices (16.97 percent), and financial institutions (12.78 percent).
Venture capital funding in China startups down by 52.2% YoY during January-February 2023, reveals GlobalData.
Venture capital (VC) funding activity by startups in China registered decline both in terms of volume as well as value during January-February 2023 compared to the same period in previous year amid the challenging market conditions. VC deal volume in China declined by 29.1% while the corresponding deal value declined by 52.2%, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that China-based startups raised $6 billion worth of funding across a total of 458 venture capital (VC) financing deals announced during January and February 2023
Startups and investors must come together to restart the flow of VC
As the US economy grapples with the effects of higher-for-longer interest rates and tightening financial conditions, the venture capital market is down but not out.
Our latest Quantitative Perspectives report, Putting the Pieces Back Together, offers an in-depth analysis of the current state of the US VC market and provides key insights for GPs, startups, and service providers to make informed decisions.
As we move further into 2023, a renewed sense of uncertainty is unfolding as Silicon Valley Bank's recent collapse has put the VC ecosystem on edge. Our report explores the opportunities and challenges faced by startups and GPs as they navigate the evolving landscape. Key takeaways include:
Private Equity vs Venture Capital: 6 Key Differences
From looking at the risk acquisition to seeing the fund size, here are six answers to the question, “What are the key differences between private equity vs venture capital?”
The Risk Acquisition
The Level of Control the Investor Typically Seeks
The Track Record and Time Horizon
The Source of Funding
The Investment Stage
The Size of Investment