VNTR Capital News Nov 26, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – Nov 26 News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Capital Newsletter is delivered to 55k+ investors weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
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Scroll down for VNTR Capital Community News, Upcoming Events, and VC News/Reads.
VNTR CAPITAL COMMUNITY NEWS
Spotlight
VNTR GP LP Summit — 3 VNTR GP LP Summits will bring top General Partners (GPs) and Limited Partners (LPs) to learn, network and connect:
April 2024 in Lisbon, Portugal.
July 2024 in Hamptons, USA
October 2024 in Singapore
Contact us to secure your spot at the VNTR GP LP summits.
Corporate Sponsorship — We designed a new annual corporate sponsorship program to help Companies interested in leveraging VNTR events, newsletters, and the VNTR platform to forge connections with investors and premium clientele in 2024. Companies are invited to Apply or respond to schedule a call.
Sponsor slots available at flagship VNTR Events:
We are actively recruiting Chapter Directors in Riyadh, Berlin, Cape Town, and Los Angeles to expand the VNTR Capital community. As Chapter Directors, you will play a crucial role as super connectors, fostering growth and establishing strong ties with the global Venture Capital community. Apply to join
This week
We hosted 5 offline events in one week, and this is our record so far:
London — VNTR Investors Breakfast on Nov 21 hosted by our London Chapter Director Olga Sergeeva.
Barcelona — VNTR Wine Tasting Experience with Toni Albiol, awarded Best Sommelier of Catalonia 2023 on Nov 22, hosted by our Barcelona Chapter Director Jordi Bosch Masa. (View photos)
Melbourne — Our first investors gathering in Melbourne took place on Nov 23 and was hosted by our Melbourne Chapter Director, Viktor Larionov.
Bali — Bali Chapter gathered for the VNTR Investors Dinner on Nov 23 with Internet Computer and Gil Petersil to hear Distruptives accelerator graduates' pitches. The event was hosted by our Bali Chapter Directors, Mark Feldman and Ivan Sherbakov.
Abu Dhabi — We hosted our first event in Abu Dhabi, cohosted with TDeFi on the Ballers F1 GP Yacht.
Upcoming
Abu Dhabi — Yuri will host our second VNTR Investors Roundtable in Abu Dhabi on Nov 29 during Abu Dhabi Finance Week. One sponsor slot is available.
New York — New York Chapter will meet for the VNTR Investors Dinner on Nov 30.
Helsinki — Join us at our second VNTR Slush Investors Roundtable on Dec 1, a side event to Slush 2023. One sponsor slot is available.
Cascais — Portugal Chapter will meet for VNTR Investors Dinner on Dec 3, hosting VNTR PRO member from Silicon Valley, Manmeet Singh Bhasin, Managing Partner at PGV Fund.
Berlin — We will be back in Berlin on Dec 5 for VNTR Investors Roundtable Berlin, a side event to the Next Block Expo.
Bengaluru — We are relaunching our India Chapter events with the VNTR Investors Roundtable on Dec 7, a side event to India Blockchain Week.
Miami — Our annual VNTR Art Basel Investors Roundtable in Miami will gather global investors and art collectors on Dec 8. Two sponsor slots are available.
VNTR Monthly Speed Networking — Join our members' speed networking event on Dec 4, where VNTR PRO and LITE members get matched for 5-7 min introduction calls online. Participants could meet 10-15 other VNTR members from around the globe.
Thank you to our Partners:
WEE.ae is the fastest and predictable B2B/B2C marketplace in the UAE market and e-commerce ecosystem (logistics, fulfillment, etc).
We offer an e-commerce platform with the fastest delivery in the region. Our application allows delivery in 1 hour or within chosen time slots in Dubai and the next day to other Emirates.
Since its launch, Wee has connected logistics partners with a supply of more than 50.000 couriers: Talabat, Careem, Yango, etc. Connected more than 200k SKUs; Developed workflow management system and logistic software.
In the next 5 years, they plan to launch a Super App on the basis of the marketplace, enter the key countries of MENA, and become a unicorn. Contact Anastasiia Kim to learn more.TDeFi is a crypto incubator & lifetime advisory firm that has been actively fostering & accelerating innovation in the blockchain & crypto ecosystem. Since the past years, we have worked with over 50 projects, and we continue to work with fellow BUIDLers who aim to disrupt the status quo, not just survive but thrive for years to come, and truly be “game-changers” in their respective fields.
Ballers Studio is a cutting-edge Web3 gaming studio and social engagement platform set to take the Web3 world by storm! We're here to redefine the gaming experience and introduce a new era of fun, excitement, and real-world benefits for our amazing users.
Imagine diving into a universe where hyper-casual games become immersive adventures and where every move you make has the potential to unlock incredible rewards! With Ballers Studio, we are revolutionizing the gaming landscape by infusing our games with captivating Web3 elements, ensuring a mind-blowing experience like never before.
We believe that our users deserve more than just virtual achievements. That's why we've curated an ecosystem where gaming becomes an avenue for tangible rewards, access to real-world parties at clubs, yachts, beaches, cosplay events, exclusive NFT holders meet-ups & hangouts, and much more! Join the Ballers Community.
VNTR Capital Events:
Jan 17 Venture Capital Investors Roundtable Davos (World Economic Forum 2024 side event)
50+ side events for 2024 will be released by the end of 2023.
RSVP to Upcoming VNTR Capital Events
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UPCOMING VC EVENTS
Nov 27-30 Abu Dhabi Finance Week, UAE
Nov 28-Dec 5 When World Collide @Cop28, Dubai, UAE
Nov 30-Dec 1 SLUSH, Helsinki, Finland
Nov 30-Dec 1 TechEx Global, London, UK
Dec 4-5 Next Block Expo, Berlin, Germany
Dec 4-8 West Tech Fest, Perth, Australia
Dec 6-7 FinTech Connect, London, UK
Dec 8-10 Art Basel, Miami, USA
Dec 11-12 Global Blockchain Congress, Dubai, UAE
Dec 12-13 New England Venture Summit, Boston Dedham, MA, USA
Dec 15-16 Super Angels Summit, Abu Dhabi, UAE
Dec 21-22 Web3 Beyond Borders, Tokyo, Japan
Jan 9-12 CES, Las Vegas, USA
Jan 15-19 World Economic Forum Annual Meeting, Davos, Switzerland
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
Mar 4-7 LEAP, Riyadh, Saudi Arabia
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 15-17 Gitex Africa, Morocco
May 22-25 Viva Technology, Paris, France
May 29-31 Consensus, Austin, UAE
June 5-7 South Summit, Madrid, Spain
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
View curated VC news and articles on the VNTR Platform
Sam Altman Is Back At OpenAI. What Does The Turmoil Mean For Microsoft And OpenAI’s Rivals?
Within days of his firing, Sam Altman has reached an agreement to rejoin generative AI giant OpenAI, which has a new board. Altman’s return as CEO follows days of turmoil at Microsoft-backed OpenAI. On Friday, Altman was abruptly fired by the board, which only said “he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities,” but offered no further explanation. Subsequent reporting hasn’t provided much concrete detail about the reasons for his ouster, either.
In distress: Europe's Q3 VC valuations in 5 charts
European venture valuations have continued on their downward course as median price tags dip across all stages. Here are five key trends from our Q3 2023 European VC Valuations Report that illustrate the trajectory of Europe's VC valuations in the first nine months of the year. For the first time in a decade, the annual median early-stage valuation has fallen, dipping from €5.7 million in 2022 to €5.3 million this year.
CFOs Fear Down Rounds Are Coming
Rising inflation and increased interest rates have greatly complicated the venture fundraising landscape, limiting the availability of venture capital and bursting the tech valuation bubble. Over the past year, down rounds, flat rounds and more complex venture terms have become the norm, as fewer investor dollars are being invested at substantially lower prices. To provide some visibility into what is happening inside private tech companies, at Startup Snapshot, we collected data from finance executives in more than 70 tech companies from around the world. The data, which was collected in partnership with Intel Ignite, Consiglieri and the Zell Entrepreneurship Program, highlighted how today’s tech companies are well capitalized for the next few months, but fear that dropping valuations are at their doorstep.
The Art of Early-Stage Investing
Venture is a power law business.
Last week’s math exercise made that point: it’s often 1, 2, 3 companies driving a fund’s returns. Top Seed funds often have a 40% loss ratio, meaning that 40% of investments are zeroes. The middle third of companies might comprise ~20% of returns, and the top 20-30% (often just a handful of companies) will drive the remaining ~80% of returns.
That portfolio construction model was oversimplified, assuming that only 3 of 25 companies return any capital. But it got the point across: having outlier companies—and maintaining good ownership in them—is crucial.
Germany announces close of €1bn fund of funds to invest in German and European VC
Germany today announced the closing of a €1bn fund of funds, dubbed ‘Growth Fund Germany’, to invest in German and European VC funds. The fund forms a key part of the federal government’s Future Fund, set up in 2021 to bolster the VC industry in Germany. The idea of the new fund of funds is to make more growth capital, which has traditionally been lacking in Europe, more available to startups and to strengthen Germany and Europe as a business location, says German state-backed investor and LP KfW Capital in a press release.
SF Bay Area Share Of Startup Funding Hits A Multiyear High
The share of U.S. venture funding going to companies in the San Francisco Bay Area hit a multiyear high this year, boosted largely by the AI boom. Altogether, companies in the region pulled in $49.3 billion in seed through growth funding to date, per Crunchbase data. That represents approximately 41% of the entire U.S. total, the highest share in years. For perspective, we charted out the percentage of U.S. startup investment going to Bay Area companies for the past five calendar years.
Is Binance’s $4B settlement the green light for spot Bitcoin ETFs?
Binance’s $4.3-billion settlement with the United States was the final hurdle before the country’s securities regulator approves spot Bitcoin exchange-traded funds (ETFs), many industry watchers claim. The settlement involved Binance agreeing to Justice Department and Treasury compliance monitors for up to five years, allowing the agencies sweeping powers to keep the exchange in line with Anti-Money Laundering and sanctions rules, among other things.
The U.S. Securities and Exchange Commission has cited market manipulation when denying spot Bitcoin ETFs, and Binance’s market dominance had to take a hit before BlackRock’s spot BTC ETF application would be approved, according to a June X (Twitter) post by Travis Kling, chief investment officer of Ikigai Asset Management.
Nonprofit Tech Startups Are Neither Strange Nor Destined To Flame Out
Following the drama at OpenAI this past week, it’s easy to get the impression that technology startups and nonprofit corporate structures make for a strange and messy combination. In reality, however, tech-focused enterprises that fuse a startup mindset with nonprofit governance aren’t especially unusual. Prominent examples date back decades, including pioneering browser developer Mozilla and the ever-popular Wikipedia. These days, nonprofits can tap into similar accelerator and seed-stage mentoring programs as their for-profit peers. For instance, famed accelerator Y Combinator began working with nonprofits in 2013 and typically includes a few in each new startup batch.
How should startups and VC funds navigate their operations during times of conflict?
The impact of the October 7 crisis continues to reverberate throughout Israel, especially in the high-tech sector, posing an unprecedented threat to business continuity for many startups. However, these startups are not defenseless. It is crucial to recognize that we have weathered several years marked by extreme situations, beginning with the onset of Covid-19 in 2020, followed by the return to normalcy post-epidemic, and the global economic downturn since the first quarter of 2022, which intensified in Israel due to judicial overhaul. As a result, startups confront the current crisis with prior adaptation to extreme conditions, equipped with heightened alertness, efficiency, flexibility, focus, and a resolute determination to tackle such challenges.
Stablecoins will remain ‘indispensable’ in Argentina under new president
President-elect of Argentina Javier Milei ran on a promise of economic change. The shape of the transformation will only become known after his inauguration on Dec. 10, but stablecoins will play an important role in Argentinians’ financial lives no matter what happens, Ripio CEO Sebastián Serrano told Cointelegraph en Español. Argentina’s crypto community has responded with great enthusiasm to the election of the former economics professor, Serrano said. Argentina-based cryptocurrency exchange Ripio saw a 180% rise in new users in October and a 110% week-on-week increase in new users on Nov. 19, the day of the runoff election that brought Milei to power.
Acquirers eager to gobble up cash-strapped fintechs
Turkeys aren't the only things being carved up this holiday season. Many fintech startups beset by high interest rates, cutbacks in enterprise budgets and a pullback in venture will have to consider 'distressed acquisitions' over the next four to six months, insiders say. "The corp dev folks are sharpening their pencils," said Jay Ganatra, partner at Infinity Ventures and former managing partner at PayPal Ventures. Distressed fintech deals have started to pop up. Take Petal, which was last valued at $800 million and backed by Peter Thiel's Valar Ventures and Tarsadia Investments. The credit card startup is seeking a buyer and its survival is in question, Fortune reported this week.
How long can the 'golden age' of private credit last?
Private credit managers have gathered hundreds of billions to fund credit-hungry companies in a time of economic headwinds. But some investors worry that the perfect conditions fueling the asset class won't last forever. Yields in this space have been generous, but some people don't expect base rates to remain at 5.5% for the life of a private credit fund or individual loan. "When direct lenders say they can deliver a 15%, now 12%, return, that is very shortsighted," said one private credit investor. Surely, private credit has compelling selling points: High interest rates and a shortage of credit have allowed lenders to extract higher returns. These players have benefited from increases in base rates, spreads and closing fees over the last two years.
Stagnant electric vehicle space looks for jump-start
Electric vehicles remain a tough sell for consumers. Their average costs are still high, and the lack of a robust charging infrastructure has led to "range anxiety" taking hold in many consumers' minds. Also, VC investment stalled after reaching historic highs in 2020 and 2021, with fundraising and deals remaining flat in Q2. Several startups aim to make electric vehicles more affordable with cheaper technology and materials, while others are building out charging availability. The US government is getting involved amid escalating competition from China, with the Biden administration earmarking $15.5 billion through a strategic initiative to jump-start the industry.
Binance's CZ and the End of the 'Borderless' Crypto Company
Tuesday marks the end of an era. Binance's Changpeng Zhao stepped down and pleaded guilty to violating U.S. anti-money laundering requirements, despite the fact that Binance was never a U.S. exchange. With that, the myth of “borderless” crypto companies is truly over. To be sure, this is not the first time that U.S. law enforcement nailed a crypto exchange that was not officially in the country. The same thing happened with FTX. But no company exemplified the “borderless” myth more than Binance, which will also pay a $4.3 billion dollar fine to settle an investigation from the U.S. Department of Justice.
How an ‘internet of AIs’ will take artificial intelligence to the next level
Artificial intelligence (AI) is a rapidly evolving field that seems likely to fall into the hands of major companies or organizations with nationally driven budgets. One might think that only these have the massive financial resources to generate the computing power to train and ultimately own AI. Recent events at OpenAI, a developer of the AI chatbot ChatGPT, highlight the challenges of centralized AI development. The firing of CEO Sam Altman and the resignation of co-founder Greg Brockman raise questions about governance and decision-making in centralized AI entities and highlight the need for a more decentralized approach. Srinivasan Balaji, a former chief technology officer at Coinbase, has become a staunch proponent for increased transparency in the realm of AI, advocating for the adoption of decentralized AI systems.
European tech downrounds hit highest levels since 2014 as valuations continue to tumble
The dreaded downround has well and truly taken hold across European VC in 2023. According to a new report by PitchBook, 21.3% of raises this year priced a company lower than their previous round — known as a downround — as median valuations across all stages fell on year. That is the highest level since 2014. In the frothy days of 2021 and 2022 downrounds made up just 16.9% and 14.8% of raises, respectively. Europe’s venture growth companies — Series E and beyond — have been the worst hit by lower valuations, with median valuation figures for 2023 sitting 26.1% lower than 2022.
Tokenization and Real-World Assets Take Center Stage
The asset tokenization and real-world asset (RWA) space caught the eye of retail and institutional capital investors in 2023 for its favorable blend of professionally-managed products and digital asset mechanics. Having advised 40-plus clients on tokenization strategies and issuances to date, we see the following key themes emerging in these markets in Q3 2023. For investors entering this space, the greatest efficiencies will come through end-to-end digital systems – meaning an on-chain lifecycle. That means savings in dollars or manual labor time relative to traditional processes.
Investors are souring on OpenAI’s nonprofit governance model
OpenAI was never quite like other generative AI startups — or other startups period, for that matter. Its governance structure is unique and what ultimately led to the abrupt ousting of CEO Sam Altman on Friday. Even after it transitioned from a nonprofit to a “capped-profit” company in 2019, OpenAI retained an unusual structure that laid out in no uncertain terms what investors could — and couldn’t — expect from the startup’s leadership. For example, OpenAI backers’ returns are limited to 100x of a first-round investment. That means that if an investor puts in $1, for example, they’re capped to $100 in total returned profit.
Rising interest rates are helping more than just fintech-focused companies
The shift from a zero interest rate policy environment, ZIRP in the common tongue, is providing a notable boost to a number of fintech companies. Fintech entities that once made the vast majority of their revenues from trading-related fees are seeing interest-driven incomes skyrocket this year. As a result, many fintech companies that may have appeared to be set for a structural unraveling of their business model have proved more durable than we might have anticipated; holding cash is now a very lucrative proposition.
Israeli venture capital deals slow sharply since start of Hamas war
Israel’s venture capital sector has recorded a sharp slowdown in dealmaking since the outbreak of hostilities with Hamas, dealing a blow to the country’s tech industry. About $325mn in total venture funding was invested in Israel during October in 120 deals, down from $1bn in 232 deals in September, according to data compiled by local market researcher IVC. While part of that may be due to seasonality or other factors, some foreign investors have slowed work on deals since the conflict erupted following the October 7 attack on Israel by the Palestinian militant group Hamas, according to people active in the market.
‘They’re Playing a Game’: What New Yorkers Think of the SEC’s War Against Crypto
Is the U.S. Securities and Exchange Commission’s (SEC) ongoing war of attrition against the crypto industry a good use of tax money? The industry itself has, for years, been calling for intermediation by regulators. And SEC Chair Gary Gensler and his lead police enforcer, SEC Director Gurbir Grewal, consistently say their campaign of lawsuits is just. Speaking in their most recent regulatory escalation, a 90-page complaint filed against San Francisco-based exchange Kraken, Grewal said: “We allege that Kraken made a business decision to reap hundreds of millions of dollars from investors rather than coming into compliance with the securities laws. That decision resulted in a business model rife with conflicts of interest that placed investors’ funds at risk.”
Climate Tech 2024: Balancing Innovation And Revenue
As the world grapples to adapt to the harsh realities of climate change, which include natural disasters and unprecedented heat waves, the climate tech sector is playing a role of paramount importance. Overall venture funding plummeted 35% in 2022 compared to 2021. This was not the case for cleantech, however, which still experienced nearly 30% growth in venture funding between those two years, according to Crunchbase data. Given this, how can we, as venture capitalists, be prepared to handle 2024?
Private equity raises bets on Botox-dealing medspas
Private equity interest in the delivery of Botox injections, laser hair removal and specialized facials across the US is growing rapidly as the medspa industry matures and investors recognize those services have become habits for many consumers. Most PE firms in the space are rolling up existing clinics under one management company, the classic buy-and-build strategy that PE firms use to create efficiencies of scale. Deals that provide capital to support roll-ups that are already in progress have been especially en vogue. "The companies are getting to the size and scale where private equity can put in dollars and the check size be large enough to make sense," said Sonya Brown, a general partner at Norwest Venture Partners. "But there's always been the underlying growth, and that's accelerated with things like Botox being more acceptable—and also more recurring."
Despite Pandemic, Hybrid Work, California Still Dominates Venture Market
In the midst of the pandemic — as venture dollars flowed freely and people were given more freedom to work where they chose — predictions swirled concerning the changing landscape of tech and where venture dollars could soon be sent. However, even as the pandemic winds down, California still dominates the venture world — in fact, it now gets an even bigger slice of the venture dollars pie — with Massachusetts and New York following per usual, according to Crunchbase data. Through the first three quarters of the year, California startups received nearly $54 billion in investment — making up 51% of the total funding market in the U.S., per Crunchbase data. The number puts the state on pace to receive $72 billion by year’s end.
US emerging managers started their fundraising rebound in 2023
As fundraising got tougher for venture firms in 2022, many feared emerging managers, which don’t have the same networks or track records that more established VCs have, would be hit disproportionately hard. While that rang true in 2022, this year, emerging managers fared better than they got credit for. U.S. emerging managers raised $11 billion this year across 170 funds through the third quarter of 2023, according to data from PitchBook. Emerging funds are not on track to reach the $41 billion they raised in 2022, which was down 31% from 2021. While these numbers aren’t great, when you compare them with established managers, they start to look pretty good.