VNTR Capital News May 21, 2023 - News, Events, VC Reads
VNTR Capital News May 21, 2023 - News, Events, VC Reads
Venture Capital, Web3, and Private Equity - May 21 News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Capital Newsletter is delivered to 35k+ 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
Weekly Highlights
Miami — We hosted our 4th Investors Roundtable in Miami on May 19, bringing together a diverse group of investors who attended Bitcoin 2023 in Miami. Take a look at the photos from the event.
Bucharest — On May 28, we'll be hosting VNTR Investors Roundtable Bucharest to mark the launch of the VNTR Romania Chapter, a side event to Bitcoin Bucharest 2023.
Marrakesh — We are hosting our first VNTR Investors Roundtable in Africa on June 1- an official side event for Gitex Africa. Approved Investors will get a complimentary investor pass to Gitex by Applying here.
Amsterdam — Join us on June 7 at Our inaugural event in Amsterdam, where we will create a premier meeting for FinTech investors, gathering them alongside the renowned Money20/20 Europe annual conference.
Lisbon — From June 7-9, Lisbon will become the hub for Web3, Crypto, and NFT enthusiasts as the Epic Web3 and Nonfungibale Conference. Lisbon Chapter members and visiting investors will gather at VNTR Investors Roundtable on June 8.
London — Crypto Hunters presents the London Casting for the groundbreaking Crypto Adventure Reality Show on June 12-14. Don't miss this opportunity to apply and potentially secure a spot at the show, competing for the coveted grand prize of $1 million. VNTR will co-host Investors Roundtable and Gala Dinner on June 13 as part of the VNTR London Chapter launch. These events will be official side events to London Tech Week, promising a week filled with innovation and networking.
Paris — Our journey continues in Paris as we host an official side event for Viva Technology, VNTR Investors Roundtable Paris, on June 15. This marks our second event in Paris for 2023 to grow our presence in France.
VNTR Weekend Summer Retreats — We're organizing 3-day weekend retreats in Algarve (July), Ibiza (July), and Mykonos (Aug). Apply to join.
Featured new VNTR members:
Wasim Fukase — Partner at Helion Ventures, CEO at HorizonX
Sergii Potapov — Angel Investor, serial entrepreneur, CEO at Cosmolot
Thank you to our partners:
Crypto Hunters TV Show is an innovative adventure-reality series that uniquely explores cryptocurrency and blockchain. 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. You can apply for casting in London on June 12-14 here. For those who can't make it to the casting events, we invite you to join the Crypto Hunters Telegram community. You can learn more and contact HK.
Upcoming VNTR Capital events:
Jun 1 VNTR Investors Roundtable Marrakech (During GITEX Africa)
Jun 7 VNTR Investors Roundtable Amsterdam (During Money 20/20 Europe)
Jun 8 VNTR Investors Roundtable Lisbon (During Epic Web3 Conference)
Jun 13 VNTR Investors Roundtable London (During London Tech Week)
Jun 15 VNTR Investors Roundtable Paris (During Viva Technology)
Jun 27 VNTR Investors Roundtable Toronto (During Collision)
Jul 7 VNTR Investors Roundtable Lisbon (During Block 3000)
Jul 11 VNTR Investors Roundtable Algarve (During Block Down Festival)
RSVP to Upcoming VNTR Capital Events
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UPCOMING VC EVENTS
May 24-25 Next Block Expo, Warsaw, Poland
Mat 27-28 Bitcoin Bucharest 2023
May 28-29 Emerge Dubai, UAE (20% discount with VNTRcap)
May 30-Jun 4 SF Tech Week, San Francisco, US
May 30-Jun 2 Innovex, Taipei, Taiwan
May 31-Jun 2 GITEX Africa, Morocco (Apply for Investor Pass)
May 31-Jun 1 Dublin Tech Summit, Dublin, Ireland
Jun 5-Jun 11 LA Tech Week, Los Angeles, US
Jun 6-8 Money20/20 Europe, Amsterdam, Netherlands (€200 discount with VTN200)
Jun 7-9 South Summit, Madrid, Spain
Jun 9 Epic Web3, Lisbon, Portugal (20% discount with VNTRCAPITAL)
Jun 12-13 SIGEF2023, Women Summit, Malta
Jun 13-14 Bloomberg New Economy Forum, Morocco
Jun 14-17 Viva Technology, Paris (30% discount with FP3UHDUJ4)
Jun 15-18 Art Basel, Basel, Switzerland
Jun 19-23 Cannes Lions, Cannes, France
Jun 25-25 Silicon Valley Comes to Tel-Aviv
Jun 26-29 Collision, Toronto, Canada
Jun 28-30 Blockchance, Hamburg, Germany
July 6-7 Block3000, Lisbon, Portugal
July 10-12 Block Down Portugal 2023, Algarve, Portugal (50% discount with VNTR50)
July 26 Bloomberg Sustainable Business Summit, Singapore (with VNTR Members access)
Sep 13-14 Token2049 Asia, Singapore
Sep 19-21 TechCrunch Disrupt 2023
Sep 20-21 DMEXCO, Cologne, Germany
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
Nov 13-16 Web Summit, Lisbon, Portugal
Nov 30-Dec1 SLUSH, Helsinki, Finland
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
Ranked: The World’s Top 50 Endowment Funds
What do Harvard, the Church Commissioners for England, the NYC Metropolitan Museum of Art, and an entity on behalf of Saudi Arabia’s King Abdullah all have in common? They all have endowment funds.
An endowment fund is the investment arm of nonprofit institutions like universities, charities, and churches. The purpose of the fund is to invest the organization’s assets to fuel future operations and other important projects.
The world’s largest endowment funds have billions in investable assets, making them sizable players in the finance sector. Here, using data from Sovereign Wealth Fund Institute, we take a closer look at the world’s largest endowment funds by total assets.
Unicorns Squeezed Between Capital Crunch and Blocked Exits
US.-based “unicorns” — privately held startups valued at $1 billion or more — could face a tough 2023 as venture investment falls and the options to give investors a liquidity event shrink.
Record amounts of money in the venture ecosystem from 2013 to 2023 drove the aggregate number of unicorns in the United States from 35 to 704 for a collective valuation of nearly $2.4 trillion, according to PitchBook Data’s latest institutional research.
However, there’s a growing imbalance between capital supply and demand, partly due to nontraditional venture investors fleeing the market. That will make it harder for unicorns to stay fully funded in the private markets while they make plans for an exit.
The Week’s 10 Biggest Funding Rounds: Big Money Flows To Water Tech Startup Gradiant
After several weeks of just having one or two rounds of nine figures, this week saw an explosion. Eight rounds hit $100 million or more as big rounds seemed to pour in. No one sector cleaned up, as the money was spread around from cleantech to biotech to fintech to even restaurant-centric software.
A Bunch Of AI-Related Companies Are Going Public Via SPAC
Not a lot of startups are going public lately. But nonetheless, we are seeing a few pursuing market debuts, including a handful of artificial intelligence-related companies taking the risky SPAC route to market.
So far this year, several AI-focused companies have announced tie-ups with SPACs, or special-purpose acquisition companies. Planned mergers span sectors including education, diagnostics and data management.
China outperforms global markets in startup funding despite VC slowdown
The venture capital (VC) funding for startups in China dropped 44.8% year-on-year (YoY) during January-April 2023, reaching $11.6 billion from $21.2 billion in the same period last year.
Despite this downturn, Beijing outperformed global markets, emerging as a resilient force in the venture capital landscape, London-based data and analytics firm, GlobalData, said.
Deal volume witnessed a 19.7% year-on-year (YoY) decline from 1,322 to 1,061.
Recently Public AI-Focused Startups Are Not Hot
Artificial intelligence is the subject generating by far the most buzz in startup circles.
But if we look at public markets, it’s clear that an AI focus hasn’t been a recipe for stock market gains. This is evident looking at recent performance of the most highly valued AI-oriented companies to go public in the quarters leading up to the market peak. To illustrate, we used Crunchbase data to curate a sample set of venture-backed companies in the space that went public on U.S. exchanges in the past three years. Open the list below to see all 11 of the companies we found.
Deepfake Startups Become a Focus for Venture Capital
There’s some serious venture capital money flowing into the startups that develop deepfake technologies. VC funds invested $187.7 million in the space last year, up from just $1 million in 2017, according to data that research firm PitchBook sent me. So far this year, investors have sent another $50 million to synthetic media startups, the figures show. With all that money moving toward such technology, tools to spot deepfakes log woefully behind the rise of generative artificial intelligence, as my colleague Diana Li reported. The global market for deepfake detection was $3.86 billion in 2022 and is poised to expand at a compound annual growth rate of 42% through 2026, according to the global research firm HSRC.
Why Web3 and the AI-Internet Belong Together
A tweet this week from Chris Frantz, the founder of email platform Loops, irked me.
Frantz said “90% of the people I know in web3 have pivoted their company to AI.”
What got to me was not that founders are so obsessed with securing venture capital that they’ll glob onto the next “in” thing. (Let’s save that problem of Silicon Valley fickleness for another time.) It was that people see the various elements of the complex new digital economy forming around us – artificial intelligence, blockchain, the metaverse, programmable money, digital identity, cryptographic proofs, quantum computing, IoT and so forth – as unrelated, exchangeable pieces, when they’re really intertwined and complementary.
Private debt delivers calm waters in storm of volatility
Private debt can deliver a reliable income stream in a volatile market, making it an appealing asset class to investors today. The relatively solid performance shown by private debt funds in the second half of last year could inspire even more confidence in the category. "One of the key attractions of private credit is the certainty of returns that the trio of seniority, contractual cash flows and negotiated downside protection—native to most private credit strategies—can deliver," said Roger Li, managing director and co-head of GP advisory at Briarcliffe Credit Partners, in an email to PitchBook. "While large upside surprises are rare in credit (with the potential exception of distressed credit), so, too, are large downside surprises, which is a trade-off credit investors are very willing to accept," he said.
Why AI startups is alluring to venture capital
The landscape of venture capital (VC) investments has witnessed a notable shift in recent years, with AI startups capturing the attention of investors. These startups have emerged as attractive prospects due to their ability to develop quality products and solutions, coupled with their potential for expanding customer bases. Notably, the growth of consumer tech firms and consumer brands has created a demand for more sophisticated systems to support and scale their operations, thereby increasing the need for AI services and products. Despite their silent growth, AI startups have demonstrated resilience and have successfully weathered the challenges faced by the Indian startup ecosystem. In fact, the decline in funding for AI startups during the funding winter of 2021 to 2022 was only 6.4 percent, as compared to the overall decline of 32.9 percent for Indian startups, as reported by PwC.
SoftBank Rebrands Opportunity Fund As It Launches Second Fund
SoftBank is changing the name of its Opportunity Fund ahead of its third anniversary and just as it announces a new $150 million second fund. The SB Opportunity Fund — a $100 million fund that launched in June 2020 — will now be called the “Open Opportunity Fund.” The change is to symbolize the fund’s open access for other LPs and organizations to invest in it instead of being solely backed by SoftBank. Serial entrepreneur and investor Paul Judge will assume leadership of the fund as chairman after serving as a founding investment committee member. Because the fund now allows outside inventors, Judge and others have agreed to acquire an ownership stake in the Open Opportunity Fund. The new Open Opportunity Fund — Fund 2 — has a $150 million target as it looks to continue investing in Black- and Latino-led startups.
To secure early-stage funding, entrepreneurs should build ESG into their business models
ESG has been under the microscope for the past 12 months with pressure from some Republican politicians in the U.S. who have called for investment managers to pull their clients’ money from ESG-focused investments. Simplistically, their argument is that ESG prevents investors being able to access assets like fossil fuels and, by doing so, they will have missed out on soaring fossil fuel company valuations driven by rising energy prices. Those on the anti-ESG side argue that continuing to follow ESG doctrine in today’s market is therefore a failure of fiduciary duty by investment managers.
Have Tech Jobs Lost Their Luster?
When Roger Lee graduated from Harvard in 2008, he and his fellow classmates were thrust into a new kind of working world. Young and college-educated, many of them witnessed, for the first time, the meltdown of the banking sector, and were disillusioned with the idea of working in the once-stable finance field. Years later, Lee founded the crowdsourced layoffs database Layoffs.fyi, which began documenting tech layoffs during COVID-19. Since then, Lee has been entrenched in layoffs data and employee outlook data with his co-founded companies Comprehensive and Human Interest, which offer employee benefits.
How Founders Can Manage Investor Relations During A Recession
As we continue into an era of economic uncertainty, managing communication with investors is crucial for the success of a startup. In my experience working with founders, I’ve found a few key ways that startups can manage investor relations to foster growth during a downturn. First, it is important for startup founders to be transparent with their investors about the company’s financial situation and any challenges it is facing. Financial performance updates as well as any cost-cutting measures that have been implemented should be communicated regularly. By being transparent, startup founders can help build trust with their investors and demonstrate their commitment to financial responsibility. In tandem, investors are able to offer more support if they are aware of the specific challenges leaders are facing.
The world’s third-largest startup ecosystem is going through one of the worst funding winters, so India’s top venture capital (VC) firms gathered in startup hub Bengaluru earlier this week to engage in discussions covering a wide range of topics, from investment strategies to corporate governance lapses and the establishment of sustainable, long-term companies. According to several people familiar with the situation, Sequoia Capital India, one of the nation’s most aggressive startup investors, organized a gathering on May 17 at its Bengaluru office in Indiranagar that included partners from well-known domestic early-stage VC firms like Accel, Lightspeed, Matrix Partners, Fireside Ventures, Blume Ventures, Prime Venture Partners, A91, Stellaris, and Orios Venture Partners, among others.
Emerging managers shouldn’t rush a first close – even in this market
Fundraising has gotten increasingly tough over the last year for funds of all stripes, and especially so for emerging managers. In the first quarter of 2023, venture firms led by up-and-coming managers raised $1.62 billion, a mere 13% of the total capital raised in the U.S., according to PitchBook. Emerging managers and new funds out in the market may find it tempting in this macro environment to hold a first close as soon as LP capital is in the door. But that may not be the best strategy in the long run. Holding a first close comes with a lot of nuance and shouldn’t be rushed, feels Kari Harris, a partner at law firm Mintz who advises VC firms on fundraising. According to Harris, while holding a first close allows a firm to start charging management fees and can be perceived as a vote of confidence to draw in institutional or larger LPs, doing it too early may result in avoidable issues down the road.
Evercore advises Tiger Global on GP-led secondaries strip sale
After a yearslong buying spree in the VC market, Tiger Global has been playing the role of seller in recent months. The New York-based crossover investor has hired Evercore to shop a so-called strip sale in the secondary market to liquidate a curated portfolio of mid- and late-stage VC-backed companies, according to a person with direct knowledge of the sale and two others who have been briefed on the deal. The firm hopes to sell interests in its private holdings to return some liquidity to LPs, as first reported by the Financial Times earlier this week. The role of Evercore, a leading secondaries adviser, and the structure of the planned sale were previously unreported.
The Biggest Startup IPOs Are Down 2.5x More Post-Peak Than The Nasdaq
Say you put $100 into a Nasdaq Composite Index fund at the peak of the boom. That would have been Nov. 19, 2021, back when interest rates were low and tech stocks were scorching hot. Today, that investment would be worth about $76. It’s a disappointing return, reflective of several quarters of steadily falling technology valuations. But you could have done worse.
Now, imagine that, instead of the index fund, you picked a basket of hot, venture-backed startups founded in the past 15 years. You know, companies like Airbnb, Coinbase, Rivian and Uber. Let’s say you invested at the market peak in November 2021. And let’s say you bought a share of the startups that launched the 19 largest public offerings in the past 10 years.
VC investment in indoor farms plummets 91%
VC dollars for indoor farming withered in Q1 as startups struggle to gain a foothold in a market dominated by mainstream agriculture companies. Indoor farms raised $75.8 million globally across 14 deals in the first three months of 2023, down 70% in deal value from the previous quarter and 91% year-over-year, according to PitchBook's Q1 2023 AgTech Report. A year ago, the vertical hauled in $879.5 million across 46 deals, including Plenty's blockbuster $400 million Series E. Indoor farms face a bleak road ahead: Energy costs, driven up by the Ukraine war, and rising interest rates are cutting into startups' already dwindling cash. With nowhere to turn, five indoor farming companies have already ceased operations or declared bankruptcy so far this year, including Tencent-backed Future Crops and formerly VC-backed Kalera.
How crypto funds shape the development of the digital asset market
A crypto fund is an investment fund that primarily focuses on investing in cryptocurrencies or digital assets. It allows investors to gain exposure to the crypto market without having to purchase individual coins or tokens themselves. Instead, these funds pool money from multiple investors to purchase various cryptocurrencies, often including Bitcoin, Ether and other popular tokens. Crypto funds can also be categorized based on their investment strategies. For instance, some funds may invest exclusively in Bitcoin, while others may invest in a diverse range of cryptocurrencies or focus on investing in tokens that have promising underlying technology or are backed by established companies. Additionally, some funds invest in crypto-related companies like mining or trading firms.
Startup radar: VCs on femtech startups worth watching
Femtech has been gaining more interest from venture investors in recent years. While a broader downturn in dealmaking has slowed investments this year, 70 startups have still managed to attract $375.1 million globally, according to PitchBook data. The sector raised a record $2.5 billion in 2021, while 2022 was the second most active year ever with $1.5 billion invested. "We saw an explosion of interest and investment in women's health over the last couple of years, and even with the economic downturn, you can't put that genie back in the bottle," RH Capital managing director Elizabeth Bailey said. "There has been a lot of activity at the seed stage, but now there is a growing need for later-stage VCs to pick up the mantle to help advance that early progress."
The global venture capital investment market is expected to grow from $207.74 billion in 2022 to $251.54 billion in 2023 at a compound annual growth rate (CAGR) of 21.1%. The venture capital investment market is expected to reach $522.50 billion in 2027 at a CAGR of 20.1%. The growing number of start-ups and small businesses is expected to propel the growth of the venture capital investment market going forward. A small business refers to a private entity with fewer employees and a lower yearly income than a corporation or regular-sized business. In contrast, a "startup" is an entrepreneurial business still in its early stages of development and is frequently founded to address problems in the real world.
The Top 50 Crypto VC’s in 2023
The USA is dominant in the cryptocurrency venture capital (VC) game, representing more than 71% of the total amount of capital under management from the top 50 crypto-focused VC funds, a new report by Coinstack Partners, a boutique investment bank for crypto and Web 3.0 companies, shows.
How crypto funds shape the development of the digital asset market
A crypto fund is an investment fund that primarily focuses on investing in cryptocurrencies or digital assets. It allows investors to gain exposure to the crypto market without having to purchase individual coins or tokens themselves. Instead, these funds pool money from multiple investors to purchase various cryptocurrencies, often including Bitcoin BTC $27,049, Ether ETH $1,816 and other popular tokens.
Venture capital investment in clean energy startups soars
LONDON, May 18 (Reuters) - Global venture capital funding for clean energy startups jumped to $12.3 billion last year, up from $1.9 billion in 2019, propelled by investment in battery technology and new government subsidy schemes in the United States and Europe, new data shows. An analysis from consultants Oliver Wyman based on data from Crunchbase showed that investors in North America led the way in recent clean energy investments, providing 57% of last year's total, with European players behind on $3.5 billion.