VNTR Newsletter Oct 13, 2024 – Venture Capital News, Events, VC Reads
Venture Capital, Web3, and Private Equity – News, Events, and VC Reads
Hello friends,
Happy Sunday!
VNTR Newsletter is delivered to 100k+ investors and subscribers weekly to share the latest news, events, and articles from the global VC and startup ecosystem.
Scroll down to discover VNTR Community News, Upcoming Events, and the latest VC News and Reads.
VNTR COMMUNITY NEWS
Spotlight
GITEX Global / Expand North Star: In the coming week, we are hosting four events in Dubai to connect the VC community and enable new opportunities. Investors can apply to investor programming to get complimentary investor passes.
Oct 14 Investor Pitch Day: "Innovate for Tomorrow Challenge 2024" organized by Dubai Holding, In5, and VNTR as a media partner.
Oct 15 VNTR Investor Roundtable Dubai GITEX/Expand North Star edition. Sponsorship spots are available.
Oct 16 VNTR LP Roundtable with CV VC and ADIV funds (capital allocators, family offices, and active limited partners only)
VNTR Global Investor Summit on Nov 13 in Lisbon: In just four weeks, we’ll be hosting our most anticipated global gathering of the year, bringing together over 200 investors in Lisbon. VNTR Summit will feature keynotes, panel discussions, and roundtables, focusing on pivotal themes such as ClimateTech, Impact Investing, AI, Blockchain, Women in VC, and Investments in Portugal. Attendees can participate in GP/LP and CVC roundtables, engage in pre-scheduled one-on-one meetings, and leverage our curated matchmaking services to maximize connections. Don’t miss out on the premier investor event of the year. Secure your complimentary General Pass or purchase a VIP Pass. We are recruiting speakers and panelists to join our programming. Apply as a speaker here.
Sponsor VNTR Summit: Sponsorship opportunities are available for companies looking to provide value to investors, high-net-worth individuals, and their portfolio companies. Don’t miss this chance to enhance your brand’s visibility and connect with key decision-makers. To explore sponsorship options, apply today or contact Elise directly for more details.
VNTR Podcast: Tune in on YouTube, Spotify, and Apple. Stay updated with our latest episodes, and subscribe on your preferred platform to never miss insightful discussions.
Coming 4 Weeks:
Los Angeles: Oct 16 VNTR Investor Breakfast during Los Angeles Tech Week
Austin: Oct 19 VNTR Investor Luncheon during F1 Grand Prix Austin. Join us at Carbon House.
Mexico City: Oct 22 VNTR Investor Roundtable during Mexico City Tech Week
Toronto: Oct 23 VNTR Investor Breakfast
Hong Kong: Oct 30 VNTR Investor Roundtable during Hong Kong FinTech Week.
Istanbul: Oct 31 VNTR Investor Roundtable during Istanbul Tech Week
Miami: Nov 1 VNTR Investor Roundtable during Fort Lauderdale International Boat Show
Vienna: Nov 5 VNTR Investor Roundtable during Invest Austria
Singapore: Nov 7 VNTR Investor Roundtable during Singapore Fintech Festival
Thank you to our Partners:
Quantum EVM is a quantum-safe blockchain that implements post-quantum cryptography and solves existing security flaws in Ethereum. With a team of leading experts and dedicated scientists, Quantum EVM is working towards establishing a complete ecosystem that offers speed, scalability, and security for a sustainable future in the face of advancing quantum computing capabilities.
Camino Network is the Layer 1 blockchain built specifically for the travel industry. Operated by a consortium of industry leaders, Camino transforms the distribution landscape and solves connectivity challenges in the multi-trillion-dollar travel sector.
Upcoming VNTR Events:
Dec 6 VNTR Investor Roundtable Abu Dhabi (Abu Dhabi F1 Grand Prix)
Jan 22 VENTURE Investor Roundtable Davos (World Economic Forum)
More events available on the VNTR Platform
Contact Elise to sponsor VNTR events or join the VNTR Corporate Partnership.
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UPCOMING VC EVENTS
Oct 12-17 UAE Web3 Fest, Dubai, UAE
Oct 13-16 Expand North Star, Dubai, UAE (25% discount using VNTRENS25, Complimentary investor passes)
Oct 14-18 GITEX Global, Dubai, UAE (25% discount using VNTRENS25, Complimentary investor passes)
Oct 14-20 Los Angeles Tech Week, USA
Oct 15-17 Meridian by Stellar, London, UK
Oct 20-21 The Carbon House @F1, Austin, USA
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
Nov 3-4 Global Entrepreneurs Summit and Expo, Dubai, UAE (complimentary for VNTR members)
Nov 7 The Venture Revolution, San Francisco, USA (50% discount using VNTR50)
Nov 11-12 WOW Summit Bangkok, Thailand
Nov 11-14 Web Summit, Lisbon, Portugal
Nov 20-21 Slush, Helsinki, Finland
Dec 4-7 CC Forum, Paris, France
Dec 9-12 Abu Dhabi Finance Week, UAE
Dec 10-11 World AI Summit, Doha, Qatar
If you would like to submit VC-related events, please get in touch with Yuri or Telegram @byuric
VC Reads and News
View curated VC news and articles on the VNTR Platform
The Week’s 10 Biggest Funding Rounds: Form Energy Powers Up With $405M
What a week for big rounds — as nine of them hit $100 million or more. While there were no multibillion-dollar rounds like last week, there was still a lot of money invested into everything from renewable energy to a soccer entertainment company.
More startups are exiting at a loss than at any point since 2009
The closed IPO window has forced venture investors to take whatever liquidity they can get.
The share of exits in which VCs made back less than their initial investment is at the highest level since at least the global financial crisis of 2007-09.
Since 2022, 70% of VC-backed exits were valued at less than the capital investors put in. That figure was 58% for the period between 2009 and 2014, according to PitchBook’s Q3 2024 Quantitative Perspectives report.
The startup world is weird right now
If you're looking to sum up that weirdness, I think the chart below does a decent job.
Take that first column named Priced Seed. It shows that median valuations for seed-stage startups are 37% 𝗵𝗶𝗴𝗵𝗲𝗿 than they were in the first half of 2021. Yet there are 38% fewer rounds actually getting signed.
This gap persists in Series A and Series B, and then vanishes in the later stages where valuations and volume have declined in lockstep since the boom times ended.
What Funding Slump? Active Venture Investors Picked Up The Pace In Q3
Global startup funding may have slowed in the third quarter, but that slowdown apparently didn’t apply to the most active venture investors, most of whom actually upped their dealmaking pace.
This is particularly true for the three most-active post-seed investors — Y Combinator, Andreessen Horowitz and General Catalyst — which all significantly increased dealmaking in Q3. Overall, out of the 14 most-active investors at this stage, charted below, only two did fewer deals year over year, Crunchbase data shows.
10 things to know about the Series A funding environment in 2024
1. It's not all AI startups!
2. It is a lot of AI startups, though. ~25% of total invested capital is going to AI startups currently.
3. Total investment in Series A primary rounds is down about 8% over the same period last year. Hoping for a good Q4 to pop that back up.
Let's have a look at Top 20 Investors (in number of deals) in African Startups in 2024
From January to September 2024
* 410 unique deals
* 432 unique investors
* 735 different tickets
* 1.7 deals per investor on average
* $1.79B raised in 9 months
Market Map: VCs bet on data infrastructure to keep fueling AI
Data is fueling the AI machine—but amid unprecedented expansion, its engine shows signs of strain.
That’s why investors are pumping money into data infrastructure startups. These companies design tools and frameworks to collect, manage, process, store and analyze massive amounts of data. They are a core part of the foundation for the large language models on which generative AI is built.
The Quiet Liquidity Crisis in SaaS
So Thomasz Tunguz put together a great chart summarizing one of my top worries over the past 24+ months in SaaS. He summarized the M&A (acquisitions) of The Top 10 Software Acquirers. And what you can see is there is really almost no liquidity for startups and scale-ups in SaaS and Cloud at the moment. It was great times for SaaS liquidity in late 2020 through the end of 2021. Epic times.
Cybersecurity Funding Plummets 51% In Q3
After a robust comeback in the second quarter of this year, funding to cybersecurity startups tumbled 51% in Q3 as investors pulled back.
Venture dollars to cyber startups fell to only $2.1 billion in Q3 — a steep drop from the $4.3 billion raised by such startups in the previous quarter
Up to $100B could be wiped off Europe’s unicorn market value
Nearly €100 billion could be wiped off Europe’s unicorn market value as stalling growth puts valuations under pressure.
The number of VC-backed companies worth over €1 billion in Europe stood at 139 as of Aug. 20, according to a PitchBook analyst note about the continent’s unicorn herd. Their aggregate value now sits at €447 billion (about $488.9 billion) from just €65.1 billion five years ago.
However, 54% of Europe’s unicorn market was last valued in 2021 and 2022, before the most recent VC downturn. With many of the area’s most valuable companies yet to raise new rounds, doubts have been cast over how much the region’s unicorn herd is actually worth.
Asia Venture Funding Hits 10-Year Low In Q3
Venture funding in Asia continues to sink — hitting its lowest total in nearly a decade last quarter.
Total venture dollars to Asia-based startups fell to $13.2 billion — its smallest total since it hit $13 billion in Q1 2015 — according to Crunchbase data.
The number also represents a 13% decline from Q2 and a massive 44% drop from last year when that total hit $23.8 billion.
PE had some good news in the third quarter, with exits increasing by nearly a third. The bad news? It’s still not enough to dismantle the inventory glut.
The value of US PE exits climbed in Q3 to reach an impressive $107.1 billion—the highest quarterly reading since Q1 2022, according to PitchBook’s latest US PE Breakdown. The exit count in Q3 rose 29% from the previous quarter to 394, exceeding pre-pandemic volumes for the first time in two years.
While many may applaud these developments as a hopeful sign of recovery for the PE market, PitchBook analysts caution that it’s too soon to pop the champagne—especially when the high inventory of unrealized assets continues to loom over the industry.
How To Speed Up An M&A Deal
In the mergers and acquisitions arena, speed is crucial. An M&A transaction that moves too slowly often dies on the vine.
If a deal drags on beyond six months, it becomes more likely to fall apart with each passing day. In the delicate balancing act of an M&A deal, swift execution is essential to maintain momentum through close.
But it’s equally important not to rush through the process and skip due diligence, which can lead to stalls, torpedoed confidence and, ultimately, an empty bargaining table.
Here are just a few ways buyers and sellers can speed up an M&A deal so everything moves efficiently and all parties are left satisfied.
Why Luxembourg startups are attracting investor interest
For a small country, Luxembourg's startup ecosystem delivers big results. At present, there are 525 companies and 246 VC investors in the Western European country. In 2023 alone, €151m was raised by its startups and scaleups through funding rounds — and this is all the more impressive when you consider Luxembourg’s population is just shy of 700k.
Superagency
At the center of many technological debates lies a fundamental question about human agency—our ability to make independent choices, act upon them, and exert influence over our lives. The rise of artificial intelligence is challenging the very concept of human agency, forcing us to ask whether we can continue to direct our own destinies or if, by relying on intelligent systems, we risk yielding control over the decisions that define our lives.
LatAm Startup Funding Sees A Modest Uptick
Funding to Latin American startups appears to have stabilized in recent quarters. However, investment remains far, far below the record highs reached a few years ago.
That was the broad finding from a Crunchbase overview of funding to South America and Central American companies in the third quarter. Funding was flat to up across stages, with a few big rounds in the mix.
In total, we tallied $884 million in known seed through growth-stage investments to the region. That’s a gain of about 14% from the prior quarter and year-ago levels. However, it’s still less than a quarter of what companies secured during the peak quarter in early 2022.
Venture capital investors wary of dealmaking despite stock market momentum, report says
Venture capital investors in the United States remained cautious about dealmaking amid economic uncertainty, according to a PitchBook-NVCA report released on Thursday, underscoring challenges in the industry despite a rally in public markets.
About $37.5 billion of deals were clinched in the third quarter ended Sept. 30, nearly 32% lower than the preceding quarter, the report said.
Limited liquidity has driven investors to negotiate tougher terms for startups, leading many to postpone funding until conditions improve.
Backing Repeat Founders: Trading On Volatility In Venture Capital
Nearly half — 49% — of unicorn startup founders have previously started at least one company, according to Endeavor. In Europe, it’s even higher at 65%, Mosaic Ventures estimates.
On the surface, these figures seem to validate a common assumption in venture capital: Prior entrepreneurial experience leads to better outcomes.
However, the disparity between these numbers points to something more complex.
European VC Funding Drops To Lowest Quarter In 4 Years, Despite Uptick For German Startups
Venture funding to European startups reached $10 billion in Q3 2024 — the lowest quarter since the third quarter of 2020, Crunchbase data shows.
Startup funding to the continent fell dramatically: 36% quarter over quarter and 39% year over year. And of the three largest countries for startup funding in Europe, Germany was the only one to show a quarter-over-quarter and year-over-year increase.
While Europe’s Q3 funding decline is significant, it’s worth noting that venture investment since the start of the current VC downturn has fluctuated — between $12 billion at its lowest prior to this quarter, and close to $17 billion at its highest. Funding could well pick up again in the fourth quarter.
Global investment in mental health? Now is the time
Poor mental health is an issue that affects nearly everyone at some point in their lives, yet people across all contexts and geographies still struggle to find and access the support they need. Today, on World Mental Health Day, we want to share news about a new Coalition dedicated to catalyzing the investment required to address mental health globally.
The McKinsey Health Institute (MHI) has joined the African Venture Philanthropy Alliance (AVPA), Clinton Global Initiative, Kokoro, and Wellcome to form the Coalition for Mental Health Investment (CMHI) with the bold vision that within a generation, investment in mental health will match the scale of global need.
Mental health challenges comprise about 15 percent of the total disease burden yet receive only 1 to 2 percent of global health financing, contributing to an estimated $200 billion annual financing gap, as per the recent report from United for Global Mental Health. This crisis is most acute in low- and middle-income countries where 80 percent of the world’s populations live–and where care is often nonexistent.
Global venture capital funding rounds dip in Q3 2024
Global venture capital funding rounds decreased in both deal value and volume in the third quarter.
Deal value from July to September amounted to $61.32 billion, down 7.8% from $66.54 billion during the same period in 2023, according to S&P Global Market Intelligence data.
The number of announced transactions during the quarter also fell to 3,341 from 4,025 in the year-ago period.