VNTR Newsletter June 23, 2024 – News, Events, VC Reads
Venture Capital, Web3, and Private Equity – News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Newsletter is delivered to 90k+ investors and subscribers weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
Scroll down for VNTR Community News, Upcoming Events, and VC News/Reads.
VNTR COMMUNITY NEWS
Spotlight
VNTR Island Summer Trip: Join us in Palma De Mallorca for a 3-day / 3-night VNTR Summer trip in partnership with Perfect.live our global concierge. The three-day program blends business and leisure to enjoy summer vacation with VNTR Club and Community members. We will enjoy bonding activities: sailing, cultural tour, golf, workshops, spa, dinners, and parties. Secure your spot on VNTR (number of spots is limited). You are welcome to bring your spouse or life partner.
New VNTR Corporate Member: VNTR welcomes Paypolitan as a new Corporate Member. Paypolitan offers a user-friendly app that seamlessly integrates your existing bank accounts and digital wallets, allowing you to view your entire financial landscape in one place. With Paypolitan, you can make instant payments using both traditional fiat currency and cryptocurrency within the same app. Additionally, Paypolitan provides instant peer-to-peer loans and staking options, enabling you to maximize your crypto holdings.
Paypolitan's white-label integrations can transform any app into a financial product or allow startups to seamlessly connect with over 2,000 banks and 190 wallets through their APIs. Contact Nils Tharandt Ortiz, founder and CEO, to learn more.
Join us on July 1st at the VNTR Expert Session about Open Banking with Nils.VNTR Podcast: In this week's episode, we speak to Kelly Perdew, co-founder and Managing General Partner at Moonshots Capital, who invested in 116 startups, 13 Unicorns, 27 exits, and 28 Veteran led companies. Watch the episode and subscribe on:
VNTR Chapter Leaders Summit: We are excited to announce our first VNTR Chapter Leaders Summit on November 11 in Cascais, Portugal, as a side event to the VNTR Summit on November 13. VNTR Chapter Leaders and Venture Partners will come together for a day of engaging discussions and planning for the expansion of the VNTR Community in 2025. We are actively recruiting Chapter Directors (or Co-Directors) in key tech hubs, including Los Angeles, Brussels, Jakarta, Manila, Cape Town, Mexico City, Rio de Janeiro, Seoul, and more. If you know any suitable candidates, please introduce them to Olya, our Head of Chapters Growth.
Ideal candidates: Serial entrepreneurs who have recently exited and are looking to venture into VC while growing their personal co-investors community.
Coming 3 weeks:
Koh Samui: June 26 VNTR Investors Padel Experience in Koh Samui.
New York: June 26 VNTR Investors Cocktail during Bloomberg Invest Summit. The cocktail is co-hosted with Filedgr, N8 Capital, and Soriano Group.
Cluj-Napoca: June 27 VNTR Investors Roundtable during Techsylvania. Thank you to our partners, ABC Incubator.
Online: June 27 VNTR Expert Session with Club Member Gaurav Dubey, Founder and CEO at TDeFi - Token Launch = Public Listings! Prepared for an Epic Token launch
Online: July 1 VNTR Expert Session with Club Member Nils Tharandt Ortiz, CEO at Paypolitan - The Evolution of Open Banking: Past, Present, and Future with Paypolitan
Brussels: July 09 VNTR Investors Roundtable during Ethereum Community Conference. Thank you to our partners, Bitget and Internet Computer.
Thank you to our Partners:
Bitget is a leading global crypto exchange and Web3 Company serving over 25 million users in more than 100 countries. Committed to helping users trade smarter, Bitget offers a pioneering copy trading feature and other trading solutions, and inspires individuals to embrace crypto through collaborations with credible partners like legendary footballer Lionel Messi and official eSports events organizer PGL.
Internet Computer is a general-purpose blockchain that hosts canister smart contracts. It is designed to provide a World Computer that can replace traditional IT and host a new generation of Web 3.0 services and applications that run solely from the blockchain, without the need for traditional IT. It can also play the role of Web 3.0 orchestrator, by interacting with other blockchains.
Upcoming VNTR Events:
July 17 VNTR Breakfast Mexico City (Mexico Chapter gathering)
July 23 VNTR Speed Networking (Online Community event)
July 25 VNTR Investors Roundtable Kuala Lumpur (Tech in Asia Conference)
July 30-Aug 2 VNTR Island Summer Retreat Mallorca (Club experience)
Aug 8 VNTR Investors Roundtable Auckland (New Zealand Chapter gathering)
Aug 13 VNTR Investors Roundtable Toronto (Blockchain Futurist Conference)
Sep 4 VNTR Investors Roundtable Seoul (Korea Blockchain Week)
More events available on the VNTR Platform
Reach out to Lukas to sponsor VNTR events or join VNTR Corporate Membership.
Follow us on Social media: Instagram, LinkedIn, Facebook, Flickr, and X.
UPCOMING VC EVENTS
June 24-26 Fund Forum, Monaco
June 25-26 Bloomberg Invest Summit, New York, USA
June 26-27 Techsylvania, Cluj, Romania
June 26-27 FinTech Summit Africa, Johannesburg, South Africa
June 26-28 Mobile World Congress, Shanghai, China
June 28-30 Investment Ecosystem Conference Vol.3, Tbilisi, Georgia
July 25-27 Bitcoin2024, Nashville, USA
Aug 21-23 VCILAT, Santa Cruz De La Sierra, Bolivia
Aug 22-24 Coinfest, Bali, Indonesia
Aug 28-29 WebX, Tokyo, Japan
Sep 11-12 TechBBQ, Copenhagen, Denmark
Sep 18-19 Token2049, Singapore
Sep 25-27 South Summit, Seoul, Korea
Sep 29 - Oct 1 Bitz & Pretzels, Munich, Germany
Oct 7-13 San Francisco Tech Week, USA
Oct 14-18 GITEX Global, Dubai, UAE (Complimentary investor passes)
Oct 14-20 Los Angeles Tech Week, USA
Oct 15-17 Meridian by Stellar, London, UK
Oct 21-27 Mexico Tech Week, Mexico City, Mexico
Oct 22-23 Blockchain Life, Dubai, UAE (10% Discount using VNTR)
Oct 28-29 SWITCH, Singapore
Oct 28-Nov 1 Hong Kong FinTech Week, Hong Kong
If you would like to submit VC-related events, please respond to this email or Telegram @byuric
Check out VNTR Capital upcoming events
VC Reads and News
View curated VC news and articles on the VNTR Platform
The Midas List - The World's Best Venture Capital Investors In 2024
Meteoric rise for AI startup valuations and a smattering of IPOs, old and new, signal the beginning of a changing of the guard atop the Midas List, Forbes’ ranking of the world’s top venture capitalists.
Produced in partnership with TrueBridge Capital Partners, the 23rd annual Midas List sees the return of investor Alfred Lin to its top spot. The Sequoia partner retakes No. 1 after two years with a portfolio bookended by a 2020 IPO in its last year of eligibility — Airbnb — and one of 2024’s few newer offerings — Reddit. Lin also gets a boost from ChatGPT maker OpenAI, where he played a role in returning CEO Sam Altman to power after a brief coup attempt in 2023.
Seven Companies Joined The Unicorn Board In May, With xAI Alone Adding $24B In Value
A total of seven companies joined The Crunchbase Unicorn Board in May, down from 10 new unicorns in April and eight in May 2023. AI companies counted three new unicorns. Web3 was the second leading sector with two, and five of the seven new unicorns are U.S.-based. The largest new entrant was xAI, which raised $6 billion and officially joined The Crunchbase Unicorn Board in May 2024. The company was valued at $24 billion. So far this year, around 50 new unicorns have joined the board, adding close to $100 billion in value.
SITUATIONAL AWARENESS: The Decade Ahead
You can see the future first in San Francisco.
Over the past year, the talk of the town has shifted from $10 billion compute clusters to $100 billion clusters to trillion-dollar clusters. Every six months another zero is added to the boardroom plans. Behind the scenes, there’s a fierce scramble to secure every power contract still available for the rest of the decade, every voltage transformer that can possibly be procured. American big business is gearing up to pour trillions of dollars into a long-unseen mobilization of American industrial might. By the end of the decade, American electricity production will have grown tens of percent; from the shale fields of Pennsylvania to the solar farms of Nevada, hundreds of millions of GPUs will hum.
The AGI race has begun. We are building machines that can think and reason. By 2025/26, these machines will outpace many college graduates. By the end of the decade, they will be smarter than you or I; we will have superintelligence, in the true sense of the word. Along the way, national security forces not seen in half a century will be unleashed, and before long, The Project will be on. If we’re lucky, we’ll be in an all-out race with the CCP; if we’re unlucky, an all-out war.
The Week’s 10 Biggest Funding Rounds: Biotech And Cybersecurity See Big Bucks
The top five raises this week came from sectors that have seen good heat recently. Biotech/healthcare and cybersecurity dominated the run of big rounds this week, with a few AI startups also seeing good-sized checks. After a few slow weeks, megadeals seem to be back, as four companies locked up nine-figure rounds.
Ilya Sutskever, OpenAI’s former chief scientist, launches new AI company
Sutskever, who was OpenAI’s longtime chief scientist, founded SSI with former Y Combinator partner Daniel Gross and ex-OpenAI engineer Daniel Levy.
At OpenAI, Sutskever was integral to the company’s efforts to improve AI safety with the rise of “superintelligent” AI systems, an area he worked on alongside Jan Leike, who co-led OpenAI’s Superalignment team. Yet both Sutskever and then Leike left the company in May after a dramatic falling out with leadership at OpenAI over how to approach AI safety. Leike now heads a team at rival AI shop Anthropic.
SEC to drop investigation into Ethereum — Consensys
The United States Securities and Exchange Commission (SEC) is dropping its investigation into whether Ether is a security. “The Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0,” Ethereum developer Consensys said in a June 19 X post. “This means that the SEC will not bring charges alleging that sales of ETH are securities transactions,” which the firm hailed as a “major win for Ethereum developers, technology providers, and industry participants.”
Mega-deals dominate AI’s horizontal platform startups
Mega-deals continue to cast a wide shadow over the AI venture landscape. Much of the money is going to companies working on horizontal platforms—those building, deploying or fine-tuning AI models. In May, xAI, the Elon Musk-led large language model creator, raised a $6 billion Series B. Mistral AI, a French LLM provider, raised $640 million this month. And Cohere, another AI model developer, is reportedly in talks to raise $450 million. The market map below explores the horizontal platforms segment of the AI and machine learning vertical. Click on the blue title to see the entire segment.
The Series A Crunch or the Seedpocalypse of 2024
2012 was the year of the Seedpocalypse. Also called the Series A Crunch, a fear gripped Startupland : raising a Series A. Two years later, this indigestible excessive bolus of fundraising rounds hit the Series B market & Series Bs became the most challenging round to raise.
Whenever there are “too many” of fundraises of one type, the next round becomes the hardest to raise.
In 2024, the Series A Crunch has returned. Software companies that have achieved the previous era’s milestone, $1m or more in ARR, face a challenging Series A market. Why is this happening again?
Just as in 2012, a surge in seed investments met a relatively stable Series A market. The supply/demand imbalance creates a funding squeeze.
China in venture capital winter, 'worst' IPO exit market in decades
Stagnant initial public offerings and geopolitical tensions have created a challenging venture capital environment in China, forcing companies and investors to look elsewhere for opportunities.
During the first six months of the year, the total value of mainland China's IPOs has plummeted 84% on the year to 32.5 billion yuan ($4.48 billion), while only 44 companies went public, down 75%. "The listing pace in the second quarter is much slower," Dick Kay, offering service leader of Deloitte's capital market services group, told reporters on Friday. "Basically, you saw no deals in March and April."
Despite the dismal showing so far, he kept his full-year forecast for China IPOs at 139 billion yuan to 166 billion yuan, as it was already halved three months earlier. Kay is "counting on" the implementation of more policy stimulus, but he also said he is "leaning towards" the lower end of the projection.
The Series A Crunch Is No Joke
A venture stage “crunch” occurs when startups at one level of financing and development struggle as a group to reach the next level of financing, and, therefore, development.
Historically, the most common crunch discussed occurs at the Series A level, when startups that have raised Seed capital have a bear of a time securing their first lettered round. Recall that Seed-stage startups tend to be very nascent, revenue modest, and sharply unprofitable. They also tend to have quick growth.
IPOs and more late stage funding: The state of the market, in data
2023 was tough for startups as funding dried up and valuations fell. In Europe, 20% fewer funding deals took place, while exit activity fell to the lowest level since 2013. But the signs for 2024 are looking a lot more encouraging. European tech unicorns are making positive sounds when it comes to profitability, with Klarna saying it has now hit this goal and fellow fintech Monzo also announcing its first annual profit. Funding activity has been ticking upwards too, with European startups bagging €16.3bn in Q1 — up 19.1% on 2023 levels.
AGI by 2027?
Apparently OpenAI’s internal roadmap alleged that AGI would be achieved by 2027, according to the suddenly ubiquitous Leopold Aschenbrenner (recently fired by OpenAI, previous employed by SBF), who yesterday published the math to allegedly justify it.
Encouraging signs for emerging managers
Private equity managers climbing the corporate ladder may one day find themselves at an impasse: level up at their well-established firm or strike out on their own. Stephanie Geveda chose the second track, forming Coalesce Capital after a nearly 13-year-long career at Warburg Pincus. In February, her new firm closed its first fund on $900 million—well above its initial $750 million target—with commitments from some of the largest limited partners in the country. Other emerging and first-time fund managers of that size—between $100 million and $5 billion—saw similar successes in Q1.
RIP Legacy Cloud. Long Live Vertical AI
Over the years, Bessemer Venture Partners has put copious effort into branding itself around all things cloud. The firm has a Nasdaq-traded Cloud Index and a large portfolio of prominent cloud startups. So, when Bessemer calls its latest annual State of the Cloud report “a eulogy for the legacy cloud,” it warrants attention. In its latest report, published Thursday, the firm makes the case that startups are moving out of what it describes as legacy SaaS business models and embracing a new paradigm: vertical AI. While this isn’t a death knell for the enterprise software companies that have been its bread-and-butter for years, it does mean they’ll have to evolve with the times.
LPs want infrastructure exposure, despite muted fundraising
Capital allocators are continuing to build their exposure to infrastructure funds, despite less-than-stellar fundraising figures at the start of the year. On the heels of 2023, when infrastructure funds gathered $120.9 billion in capital commitments, last quarter’s fundraising figures aren’t record-breaking, but they do signal sustained investor interest in the asset class, according to PitchBook’s Q1 2024 Global Real Assets Report. Limited partners—attracted to the asset class’s countercyclical nature and inflation-resistant returns—committed a total of $25.6 billion across 13 funds in Q1 2024.
Stablecoins to make up 10% of money in the next decade or so: Circle CEO
Stablecoins could account for 10% of “global economic money” over the next ten years or more, according to stablecoin issuer Circle CEO Jeremy Allaire. It’s arguably a bold claim, but Allaire pointed to several factors that could trigger an exponential expansion in stablecoin adoption over the next “10+ years.” “Most of the world’s largest payments companies are actively using this technology and exploring how to expand their usage as the benefits of public chains and stablecoins become apparent to everyone,”
Semiconductor Startup Funding Looks To Bounce Back After Lackluster 2023
Black Semiconductor was the latest chip startup to make headlines when it raised nearly $275 million — mainly from the German government — last week for its next-gen chip tech. It was just the latest sign of chip startups being able to raise big money as once again one of the most foundational technologies grab investors’ attention around the world, mainly thanks to AI. Global venture funding to semiconductor chips appears well on its way to bouncing back this year after a forgettable 2023. Thus far this year, VC-backed chip startups have raised nearly $5.3 billion in just 175 deals, per Crunchbase data
Europe suffers lack of founders with technical expertise
Only 26% of Europe’s unicorn founders have a technical background, potentially holding the region back from creating more tech giants. A study by VC firm Antler also found that less than half of the 20 most valuable Europe-based tech businesses have founders with experience in computer science, software development or data science compared to 100% in the US. Antler has also found that 90% of founders of failed unicorns have no technical expertise. Having a deeper understanding of the technology behind a product can offer founders an edge when launching a startup.
Right Off The Batch: 50% Of YC W24 Is Built With AI. Who Got Funded?
Every cohort of Y Combinator startups “graduates” to great fanfare when the accelerator holds its closely watched demo days. But what happens next? Using Crunchbase data, we set out to track the funding trajectories of these seed- and pre-seed companies, starting with the very AI-centric winter 2024 batch, which wrapped up its demo day in early April. We grouped companies by industry and recorded who has announced funding. We also looked at which investors are most active in backing these startups.
France leads the pack for generative AI funding in Europe
Like it or hate it, artificial intelligence — especially generative AI — is the technology story of 2024. OpenAI, with its rollouts of viral services like ChatGPT and billions in funding, may have gobbled up the lion’s share of attention and money so far. But according to a new report out from top VC Accel and the analysts at Dealroom, in Europe and Israel there is a wave of hopefuls emerging to make their mark. Together, Europe and Israel typically make up some 45% of all venture funding annually, yet when you translate that to the specific sphere of AI, the proportion drops to less than half of that — and generative AI even less. You can take that as a signal that Europe and Israel are lagging in the market.
Telegram Is Crypto’s Adoption Machine
Listen to any crypto podcast or convention panel, and you will hear crypto natives speak of a killer app yet to come that will onboard the rest of the world. But what if it is already here? I argue that Telegram and a handful of independent developers have made more progress in onboarding the masses to crypto than the $100 billion in venture capital that has flooded the space since 2014.
Is Europe's growth funding gap a myth?
Unless you’ve just started learning about Europe’s startup ecosystem, you’ll have heard about one of its biggest challenges: ‘the growth funding gap’. Lobbying bodies like the European Startup Network have singled out securing late-stage funding as one of the biggest problems facing startups right now. Governments also think it’s an issue — and politicians and public funders are ramping up programmes to help put more growth capital into VC funds and startups. France’s Tibi programme has pledged €7bn to attract more investment into late-stage funds; the EIF’s Tech Champions Initiative has €3.75bn to back big growth funds; and the recently-announced WIN initiative in Germany aims to direct more money into growth funding.
Despite AI hype, SaaS revenue growth is in a rut
As enterprises feel pressured to buy into the AI revolution, they’re cutting back spending on other software tools—a shift that is crimping growth at SaaS leaders and startups alike. Revenue growth at newly public US VC-backed SaaS companies fell sharply in 2022 and has remained low, according to PitchBook data. The best of these companies were growing sales at more than 73% year-over-year in Q1 2022, a rate that declined to 32% in Q1 of this year. The median growth rate for the cohort is now 19%, down from 35% in Q1 2022.
Does PE need to be ‘bag ready’ for new UK tax plans?
Some UK fund managers are considering relocation over fears that the next British government will stage a tax raid on private equity. In its statement Thursday, the opposition Labour Party made clear its intention to change how PE’s compensation, such as carried interest, is taxed. The party described it as “the only industry where performance-related pay is treated as capital gains,” adding that it intends to “close this loophole.”
Where's Europe's next digital health unicorn?
Almost exactly one year ago today, behemoth US healthtech conference HLTH, organised by the same people who put on fintech conference Money20/20, held a controversial launch party in Munich ahead of its 2024 event in Amsterdam that kicked off this week — its first on European soil. The party took place on the first night of Bits & Pretzels’s healthtech conference, also in Munich, and drew several attendees (including this reporter) from that event’s speaker dinner for its own bash. The party was packed and when I arrived a baying mob of conference goers who weren’t wearing wristbands adorned with the HLTH logo were being turned away at the door.
Metaverse And Augmented Reality Remain Unpopular With VCs
The metaverse is not getting funded.
That was the unsurprising finding from our latest data dive regarding investment in startups innovating around the metaverse, virtual reality and augmented reality.
The space, which was significantly buzzier a few years ago, has apparently lost its cachet with VCs. Dwindling investment comes on the heels of disappointing adoption for the gear and leading metaverse platforms.
Even Apple’s U.S. introduction earlier this year of the Vision Pro headset, marketed as a “spatial computing” device, didn’t produce a notable turn in sentiment. Demand for the $3,500 device is reportedly cooling, with Apple said to have cut its shipment forecast.
Crypto's Long-Tail Disruptive Trends
The first half of 2024 has started a new cycle for the crypto’s adoption. The long awaited approval of Bitcoin ETFs was a decisive factor for this new cycle, along with strong price momentum that led to bitcoin reaching a new all-time high. This not only pushed bitcoin to the doorstep of institutional adoption again, but it also positioned the market for another potential bull market cycle. These cycles have been marked not only by the introduction of new projects, from Bittensor and ZKSync, to Bonk and Dogwifhat, but also by strong price appreciation of many digital assets.