VNTR Capital News Sep 10, 2023 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – September 10 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
Davos WEF 2024 — We seek partners to enable the Investors Hub at WEF in January. Please reach out to Yuri to discuss the collaboration options.
We are recruiting:
Chapter Directors in Riyadh, Singapore, and Berlin to help us launch and grow the VNTR Capital community and serve as a gateway for the Venture Capital global community. Apply here
Request Introductions — VNTR PRO members can quickly request an introduction to VNTR members through the VNTR Platform or support channel, and we will make a warm introduction via WhatsApp, Telegram, or email.
Create your VNTR Investor Account
This week
New partnerships:
Seoul — We hosted our first VNTR Investors Roundtable in Seoul on Sep 6 (view photos).
VNTR 1-on-1 Speed Networking Event — We enabled 200+ one-on-one meetings between our VNTR members on Sep 6. Next Speed Networking to be announced.
Upcoming
Singapore — Our flagship event in South East Asia is on Sep 14 in Singapore (official side event to Token2049, 10% Off with VNTRCAPITAL). We will host James Tan, Managing Partner at Quest Ventures, as a keynote speaker and 5 presenting partner companies.
Zug — We partnered with Inacta Ventures to host a Venture Capital Investors Roundtable in Zug on Sep 15 during the Crypto Valley and Crypto Oasis Swiss Web3 Festival.
Dubai — We are restarting our networking events in Dubai with VNTR Roundtable on Sep 16, a side event to the World Fashion & Arts Business Forum (RSVP)
San Francisco — Our second Investors Roundtable in Silicon Valley will take place on Sep 20 during TechCrunch Disrupt 2023 in partnership with Innowise.
Barcelona — Join us for the VNTR Barcelona Chapter launch on Sep 21, where Jordi Bosch will gather the VC community for an interactive roundtable.
Munich — The first VNTR Investors Roundtable in Munich will take place on Sep 25 as a side event to Bitz & Pretzels and Octoberfest 2023.
London — The next VNTR Investors Roundtable London will be on Oct 5 as a side event to Sifted Summit and Zebu Live.
Tbilisi — Our 4th VNTR Investors Roundtable Tbilisi Oct 8 will gather visiting and local investors during the DeGameFi Web3 annual conference.
Thank you to our Partners:
Stellar is a decentralized, fast, scalable, and uniquely sustainable network for financial products and services. It is both a cross-currency transaction system and a platform for digital asset issuance, designed to connect the world’s financial infrastructure. Financial institutions worldwide issue assets and settle payments on the Stellar network, which has grown to over 7 million accounts. The Stellar Development Foundation (SDF) is a non-profit organization that supports the development and growth of Stellar, an open-source network that connects the world’s financial infrastructure.
Cointelegraph Accelerator is working with early-stage Web3 projects to boost their growth by leveraging its access to a native Web3 audience, marketing expertise, and a broad network of partners in the industry. The equity/token-based program aligns the interests of the accelerator and the participants, allowing them to build meaningful partnerships for sustainable growth.
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.
Liquid Crypto is leading the way for the next generation of DeFi. Users can effortlessly complete all of their transactions within one platform with confidence, knowing they will always be offered the lowest possible rate in the market. Liquid Crypto’s AI enables projects, traders, and investors to effortlessly realize outsized returns in an omnichain reality by bridging the gap between CeFi, DeFi, Money Managers and Market Makers. You can contact Choua Lee to learn more.
dEquity is a pioneering FinTech company transforming residential rental properties into lucrative, income-generating investments. dEquity provides innovative solutions that empower individuals from all backgrounds to participate in the real estate market, offering opportunities for passive income and financial growth. You can contact Mark to learn more.
Upcoming VNTR Capital events:
Oct 17 VNTR Investors Roundtable Dubai (During GITEX Global and Expand North Star Investors Registration)
Oct 18 VNTR Investors Roundtable New York (During NY Tech Week)
Oct 19 VNTR Investors Roundtable Lisbon (During Block3000)
Oct 23 VNTR Investors Roundtable Las Vegas (During Money20/20)
Oct 25 VNTR Investors Roundtable Barcelona (During European Blockchain Week)
Nov 1 VNTR Investors Roundtable Hong Kong (During Hong Kong FinTech Week)
Nov 3 VNTR Investors Roundtable Istanbul (During Istanbul Tech Week)
Nov 9 VNTR Investors Roundtable Singapore (During Bloomberg New Economy Forum)
Nov 14 VNTR Investors Roundtable Lisbon (During Web Summit)
Dec 1 VNTR Investors Roundtable Helsinki (During SLUSH)
Dec 10 VNTR Investors Roundtable Miami (During Art Basel Miami)
RSVP to Upcoming VNTR Capital Events
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UPCOMING VC EVENTS
Sep 11-13 Permissionless II, Austin, Texas
Sep 12-14 Dreamforce, San Francisco, USA
Sep 12-17 Berlin Blockchain Week, Berlin, Germany
Sep 12-13 MoneyLive Asia, Singapore
Sep 12-14 Glendale Tech Week, LA, USA
Sep 13-14 Token2049 Asia, Singapore (10% off with VNTRCAPITAL)
Sep 18-19 IPEM Paris, France
Sep 19-21 TechCrunch Disrupt 2023
Sep 19-22 Super Return Asia, Singapore
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 Meridian by Stellar, Madrid, Spain
Sep 26-27 TechEx Europe, Amsterdam, Netherlands
Sep 26-28 Mobile World Congress, Las Vegas, USA
Sep 26-28 Elevate Festival, Toronto, Canada
Sep 27-30 Monaco Yacht Show, Monaco
Oct 3-4 CV Summit, Zug, Switzerland
Oct 4-5 Sifted Summit, London, UK
Oct 5-6 Zebu Live, London, UK
Oct 7-8 DeGameFi, Tbilisi, Georgia (10% off VIP passes with VNTRVIP10)
Oct 8-9 Wow Summit, Dubai, UAE (15% off with WOWDXBVNTR15)
Oct 10-11 Future Innovation Summit, Dubai, UAE
Oct 12 LetsIgnite, Bengaluru, India
Oct 15-18 Expand North Star Dubai Harbour, UAE
Oct 16-20 GITEX Global, Dubai, UAE (free for qualified investors)
Oct 16-22 NY Tech Week, New York, USA
Oct 19-21 VC Weekend, Dubai, UAE
Oct 20-23 Plan B Forum, Lugano, Switzerland
Oct 22-24 Money 20/20, Las Vegas, USA
Oct 23-24 SOCAP23, San Francisco, USA
Oct 24-26 Digital Nigeria, Abuja, Nigeria
Oct 24-25 Blockchain Life 2023, Dubai, UAE
Oct 30-Nov 3 Solana Breakpoint, Amsterdam, Netherlands
Oct 30-Nov 5 Hong Kong FinTech Week, Hong Kong
Nov 7-10 Nearcon, Lisbon, Portugal
Nov 11-12 Australian Crypto Convention, Melbourne, Australia
Nov 13-16 Web Summit, Lisbon, Portugal
Nov 13 Europas, Lisbon, Portugal
Nov 13-17 AIBC Europe, Malta
Nov 14-16 SALT iConnections Asia, Singapore
Nov 15-17 Singapore Fintech Festival, Singapore
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 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
Searching for Unicorn Funds - A Look at Fund DPI
When we released our recent blog post on Fund Unicorns, we looked at how many funds out of the roughly 650 submitted were “Unicorns.” We defined a Fund Unicorn as a 10x TVPI fund. After we released the analysis, one reader asked us to analyze cash-on-cash returns (aka “DPI”) as well. Here, we try to oblige.
As requested, we went back to our database of fund returns and looked at DPI. We removed all the returns data from predecessor funds, funds sub $1M, SPVs and angel track records. We looked only at blind pools.
How to Win in Venture Capital: Focus on the Fat Tails
Many prominent entrepreneurs and venture capitalists assert that VC returns are distributed according to a power law. As Marc Andreessen of Andreessen Horowitz points out, each year, of the 4,000 technology startups seeking VC funding, only 200 (or 5%) are seriously fundable, with “15 of those generating 95% of all economic returns…even the top VCs write off half their deals.” Billionaire tech investor Peter Thiel concurs, “[W]e don’t live in a normal world; we live under a power law. … [I]n venture capital, where investors try to profit from exponential growth in early-stage companies, a few companies attain exponentially greater value than all others. … Bad VCs tend to think the dashed line is flat, i.e. that all companies are created equal, and some just fail, spin wheels, or grow. In reality you get a power law distribution.”
10 years later, still no Bitcoin ETF — but who cares?
The first spot Bitcoin exchange-traded fund (ETF) application, filed in July 2013, was denied in both 2017 and 2018. A decade has passed since that initial application, and the Securities and Exchange Commission has rejected more than a dozen additional applications and repeatedly punted the date for deciding on others. The ETF saga’s latest iteration saw Bitcoin jump more than 6% as industry advocates celebrated a court ruling that affirmed what we already knew — that the SEC’s rejection of Grayscale’s ETF application was “arbitrary and capricious.” This was, of course, followed by the SEC delaying its decision on all seven pending Bitcoin ETFs, and a subsequent price drop. Now we wait as the SEC deliberates on its next move and Grayscale pleads for approval.
SaaS Growth Report - What Makes a Good SaaS Company?
In this report, we do a deep dive analysis of how SaaS businesses grow from zero to $30M ARR and beyond. We also share the latest growth trends, insights, and benchmarks based on data from over 2,200 SaaS businesses.
The Week’s 10 Biggest Funding Rounds: Stack AV And Ascend Elements Lead Another Huge Week
Two weeks ago we marveled at the fact that eight rounds topped $100 million and amazingly, here we are again. It seems like investors are all-in on big rounds again — at least for the last three weeks or so. One round was even worth a reported $1 billion.
Once again, those big, big rounds also ran the gamut from autonomous trucking to AI, and from fintech to batteries. It may not be 2021, but these last few weeks make us wonder.
Will generative AI revolutionise the way VCs find deals?
VC has long been criticised for relying too much on gut feel and warm intros to make bets. But as the number of VC firms has exploded, more investors have turned to data to find an edge. And, most recently, that includes reaping the benefits of step changes in generative AI. Take London-based VC firm Moonfire. Late last year, the early-stage firm was trying to improve one of the machine-learning-based tools it uses to identify promising companies. One engineer made the model 5% better after three months of work — a result partner Mike Arpaia called “awesome”. Then large language model (LLM) GPT-4 was released in March this year. In a single afternoon, the same engineer improved the model by a further 20%.
European Venture Funding Halved In Q2 2023 As Late-Stage Investors Dialed Back
European venture funding halved in the second quarter of 2023 compared to a year earlier, and was down two-thirds from the peak two years ago, Crunchbase data shows.
Funding totaled $12.4 billion in Europe in Q2 2023 — flat quarter over quarter and down 50% from the $24.7 billion invested in Q2 2022.
Signs of life in the technology M&A market
With venture capital totals depressed around the world and the IPO market just starting to poke its head out from hiding, who is buying startups these days? The answer is fewer people than before. But while aggregate M&A deal volume in startup land is a bit of a bummer according to a new report from CB Insights, there are a number of positive data points that should lower cortisol levels among startup founders struggling to close a new tranche of private capital. Today we’re looking at where deals are getting done from a geographic perspective, contrasting the European market with what we saw in the United States in the second quarter. We’ll also explore how median sale prices are changing, and what sort of return those exits might generate for private-market investors.
A Look at the IPO Market As Investors Hope for Strong Instacart, Arm & Klaviyo Offerings
With Instacart, Arm, and Klaviyo filing to go public, there’s cautious excitement in the air. At a hoped-for $52 billion valuation, Arm could be the largest IPO of the year.
IPOs are key stepping stones to exits for venture capitalists. And initial public offerings are a major source of fresh funding for late-stage technology companies.
Both exits and new funding are desperately needed in a world where much of growth stage financing is frozen.
Have You Heard About The Herd Of Failed And Struggling AI-Focused Unicorns?
These days, we hear a lot about companies seeing soaring valuations as a result of their artificial intelligence prowess. It’s easy to get the impression that an AI-focused business model is the most direct route to investors’ hearts. In reality, however, investors aren’t so easily swayed. Scores of venture-backed companies touting artificial intelligence technologies have shuttered or seen valuations plummet in the past few quarters. Such cases are particularly visible among those that went public during the 2021 SPAC boom. One of the most prominent recent casualties is Babylon Health, a U.K.-based digital health startup with a self-described mission “to make high-quality healthcare accessible and affordable for everyone on Earth.” The company, once valued at over $2 billion, filed for bankruptcy last month.
Saudi Arabia looks to blockchain gaming and Web3 to diversify economy
Saudi Arabia has ramped up its economic diversification efforts driven by its ambitious Vision 2030. In a bid to diversify its economy away from a dependence on oil, the kingdom has embraced emerging technologies, such as blockchain and artificial intelligence (AI), and tapped into booming markets like gaming. But while the country has yet to leave a significant mark in the global game and AI development, the ripples of its investments in the gaming sector could extend far beyond — at least, that’s what Web3 experts say. “Based on our work and communications that we have, Saudi [Arabia] is very, very interested in Web3,” Animoca Brands co-founder Yat Siu told Cointelegraph.
Venture Firms Hang the ‘For Sale’ Sign on Portfolios
Some of the most active startup investors have been hanging a “for sale” sign on their portfolios at a time when venture investors are finding it increasingly difficult to raise new venture funds. Insight Partners has considered selling a stake valued at $400 million in Left Lane Capital, a consumer-focused venture capital firm founded by a former Insight principal, according to a person with direct knowledge of the matter. Insight made more than 200 startup investments in 2021 alone, and raised a $20 billion war chest to back more startups last year. Insight joins Tiger Global Management, Chamath Palihapitiya’s Social Capital and other VC firms looking to sell some of their stakes in startups or the VC funds that back them.
How To Hire A COO For Your Startup In A Generative AI Era
Scaling operations is a hidden stone that founders often stumble upon, and that’s where AI can come into play. Automating routine operations to free up resources for critical tasks and gaining insights to make data-driven decisions are just a few of the benefits of AI. Generative AI takes it one step further with self-operating solutions redefining the role of a chief operating officer. As an acting chief operating officer, I witness those changes firsthand when helping our portfolio startups make the crucial hire of a COO. Some people think a startup doesn’t need a COO. But I believe that having a COO is beneficial at the startup’s early stage. Scaling brings complexities, and founders often spend up to 40% of their working hours on tasks not generating income.
YC demo day onslaught points to generative AI's sweep
The inevitable has happened: AI has come for YC. More than 65% of Y Combinator's summer cohort, totaling 134 startups, are building tools around AI, bringing automation to healthcare claims, customer service automation, sales outreaches, coding and game design. Investors fear missing a train that is leaving the station, leading to intense competition and vast amounts of capital for unproven startups. From Q1 to Q2, seed-stage deal value for generative AI startups nearly doubled, and deal count increased by more than a third.
Want to stay sane as a VC? Organise your inbox
In the world of venture capital, the relentless flow of information can be a double-edged sword. On one hand, staying informed and connected is crucial for making sound investment decisions. On the other, the sheer volume of emails, updates and to-dos can quickly overwhelm even the most seasoned investor. As a partner at an early-stage VC firm with nearly a dozen years in the industry, I've discovered a powerful antidote to the ever-looming threat of burnout: the "Inbox Zero" principle. In an industry where exhaustion often looms, Inbox Zero is a path toward rejuvenation. By fortifying your life as a VC with good organisation, task management and an unwavering focus on progress, burnout can be tamed. A venture capitalist’s journey is indeed a marathon, but these tools make the path navigable, rewarding and — more importantly — sustainable.
Prioritizing founders' mental health could pay off for VCs
Mental health has rarely been discussed in the venture capital community but the issue has garnered more attention recently, particularly among startup founders finding themselves under increased pressure in the current downturn. The pressures of raising funds, meeting performance targets and coping with a stressful work-life balance are taking their toll on many entrepreneurs' mental well-being. According to a survey by data-sharing platform Startup Snapshot, some 72% of founders reported that launching their own business had a negative impact on their mental health. As a result, more venture capitalists are putting resources towards supporting founders' mental health. But many in the industry believe more needs to be done.
How can startups help close the EV charging gap?
The United States has a goal to have 50% of all vehicles sold each year be zero-emission by 2030. According to an analysis from McKinsey & Company, achieving this goal would put 48 million electric vehicles (EVs), or 15% of all total vehicles, on the road in 2030. As a result, the U.S. needs 20 times more EV charging stations than the 129,598 public and 14,673 private charging ports available in the U.S. today, according to the U.S. Department of Energy’s alternative fuel locator. The news that seven major automakers, including BMW, Honda, Hyundai, Kia, GM, Mercedes, and Stellantis, are uniting to build thousands of EV chargers in the U.S. is an encouraging step in the effort to get more EVs on the road. The companies have planned to form a joint venture (JV) and a multi-billion-dollar investment to build out charging stations.
Global Startup Funding Remains Subdued But IPO Market Sparks Hope Of Rebound
Global venture funding settled around $22 billion in August 2023, up around 19% month over month but down 16% from the $26.2 billion invested in July 2022, Crunchbase data shows. Last month’s startup funding total was on par with what’s emerged as the new normal for venture capital. So far in 2023, funding has averaged just over $23 billion per month as active investors have cut back their funding pace at each stage. Late-stage funding increased year over year for the first time in 18 months, but was still below the peak for this year, Crunchbase data shows. Early-stage funding almost halved and seed funding was down by around one-third from a year ago.
Crypto Lenders Caused Crypto Contagion Last Year. How Is the Industry Rebuilding?
Loans are as old as money. Throughout history, whether seeds or gold, every form of currency has had its lending market. Now, Bitcoin, with its decentralized and transparent nature, has staked its own claim in the financial landscape. And just like the currencies that came before it, for Bitcoin to truly thrive, it also needs a robust lending market. However, thus far, most attempts to create a bitcoin credit market have failed spectacularly, with disastrous repercussions. The demand for bitcoin and digital asset lending services surged during the 2020 run-up, with 10s of billions of client assets flowing towards both centralized and decentralized lending platforms.
Setting up a VC fund 101 — what emerging managers need to know
2023 might not be as lucrative for emerging fund managers as the free-flowing money days of 2021, but that hasn’t stopped a crew of folk setting up first-time funds this year anyway. Among them are a growing number of solo GPs raising alone. But setting up a fund is easier said than done. There’s a lot to consider — from the legal aspects and hiring to finding LPs. So, where should you begin? According to Gloria Bäuerlein, a solo GP and founding partner at Puzzle Ventures, a fund manager first needs to decide on an investment strategy.
More private investors take shots at sports, but do they score?
In early 2021, the NBA opened the door to private equity funds for the first time, allowing institutional investors to own up to a 20% stake in a single franchise. Three months later, a newly-formed private investment firm struck up a deal with the NBA's Golden State Warriors: a 5% ownership stake at a $5.5 billion valuation. Later that year, Arctos Sports Partners, a firm that acquires minority stakes in professional sports franchises, more than doubled its Golden State bet, upping its ownership in the Steph Curry-anchored team to 13%. The firm, which was founded in late 2019, has acquired minority stakes in other professional sports franchises, including the Sacramento Kings and the San Francisco Giants. As private investment firms become further entrenched in the ownership structures of professional sports franchises, time will tell if these sports-focused funds generate outsized returns for LPs.
Cryptoverse: Venture capital still haunted by crypto chaos
For venture capitalists, the scars of bitcoin's disastrous 2022 run deep. While breezy bitcoin has bounced back, leaping by about 55% this year, investments in crypto startups have dropped for the fifth straight quarter. VC crypto bets totaled just under $2.3 billion in April-July this year, the lowest quarterly level for over three years, according to data firm PitchBook. In the first half of 2023, investments were down by almost three-quarters from a year ago to $5 billion. "The lofty exuberant valuation days are gone," said Tal Elyashiv, founder and managing partner of SPiCE VC, adding that valuations place on crypto companies had fallen closer in line with their actual performance.
China’s Early-Stage Funding Softens
Venture funding in Asia dropped 44% in the second quarter of 2023, but surprisingly, the decline was not directly related to a pullback by investors in Chinese startups, as might be expected. With political tensions between China and the U.S. at a high and now an official ban on certain U.S. tech investments in the nation, the dots seemed easy to connect. Nevertheless, China’s Q2 numbers saw a slight bump, both quarter to quarter and year to year. Instead, it was India, South Korea and other nations in the region that led the decline in Asia’s numbers. Still, a deeper dive into Crunchbase data shows a softening in China’s early-stage funding that was somewhat covered up by a surge in large growth rounds last quarter. While late large rounds count toward a region’s total funding, the decline in early-stage funding could set off alarms about the full health of the VC market in China.
AI and the New Digital Cold War
We are entering a new world order, one marked by increased nationalism and greater geopolitical competition. While countries are not going to undo all of the global economic systems that took shape under American unipolarity for the past three decades, certain critical sectors will become decoupled in a process we have previously referred to as “re-globalization.”
Most significantly, the technology ecosystem will be split largely into two spheres dictated by the world’s two economic powerhouses, the United States and China. Other states will need to decide which sphere they want to be part of, putting pressure on the United States and China to outpace the other and establish their technological dominance. Unfolding before us is a heightened form of economic competition we understand as the “Digital Cold War.”
U.S. Updates Accounting Rules for Cryptocurrencies
Changes have been made to U.S. standard financial statements that require public and private companies to keep accounting records that measure the fair value of digital assets on the balance sheet from 2025.
According to the new rules, companies that store a significant portion of their assets in BTC, ETH, or other cryptocurrencies will have to estimate their value based on the current exchange rate of digital assets, taking into account the recovery from price declines. This approach will introduce volatility to some companies’ revenues but will greatly improve accounting.
Crypto funding in August wasn’t as good as the numbers may lead you to believe
Crypto and blockchain startups haven’t been having a good time raising funds for quite a while now, given the overall slowdown in funding, a stronger focus on due diligence, and concerns over the macroeconomic environment and regulations in the U.S.
At first glance, August seemed to bring some relief to startups in the space, with venture capitalists investing $819 million across 91 companies, per fresh data from PitchBook. That was about 51% more than the $542.8 million that companies in the space raised in July.
However, August only looks good because of the huge $400 million round raised by “Shariah-compliant” digital asset exchange Haqqex, and the $100 million round raised by crypto custodian BitGo. Without these two rounds, we’d actually have seen a dip in investment last month compared to July.