 SoftBank CEO Masayoshi Son has reportedly ordered execs to slow down investments as its loan to value ratio climbs. The investment giant has been hit hard by the war in Ukraine and rising interest rates, both of which have driven down the global appetite for tech risk. Its stock value has fallen 40% in the last year. More: - According to Financial Times sources, the firm's writedown in the last quarter alone totaled $30B, although a recent recovery for some shares brought that figure down to $20B.
- Son has maintained a 25% debt limit "during normal times." At 22%, the firm is inching closer to its self-imposed ceiling.
- The firm is reportedly pushing to raise cash and is evaluating assets that could be liquidated.
- In March, it tapped Goldman Sachs to market a $1B stake in the South Korean e-commerce giant Coupang, which was one of its biggest wins in recent years.
- It sold the shares at $21, a 40% discount on its IPO price.
- SoftBank is finalizing loans worth $10B, which are tied to the IPO of UK chip designer Arm Holdings, while Son has taken out personal loans against a third of his own stake in the firm.
- The sell-off has been exacerbated by the situation in China, where SoftBank holds stock in the tech giants, most notably Alibaba, that have fallen on the wrong side of government regulators.
- The value of its stake in Alibaba fell from $208B in November 2020 to $69B in March.
- Many analysts expect that the firm will be able to weather the storm, as it has tended to bounce back from downturns in recent years.
- They point to its $23B in cash on hand, which could cover debt interest, bond redemptions, and a potential $6B Alibaba margin call, all while maintaining its stock buyback program and continuing investing, albeit at a reduced pace.
- What exactly a reduction entails is unclear; at any rate, it invested in 195 companies last year, making it one of the busiest firms (after Tiger Global) on the planet.
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GoTo, Indonesia’s largest tech company, raised $1.1B (15.8T rupiah) in one of the year’s largest IPOs to date. The company was valued at $28B after the offering, making it the country’s fourth-most-valuable company listed on its stock exchange, behind only PT Bank Central Asia, PT Bank Rakyat Indonesia, and PT Telkom Indonesia. More: - The debut was the third-largest in Asia this year, following LG Energy Solution and Jinko Solar Co.
- With operations spanning ride-hailing, e-commerce, and fintech services, GoTo’s offering included 46.7 billion shares.
- Of those, 40.6 billion were primary shares, valued cumulatively at $957M, a reduction from the company’s original offer of 48 billion.
- At 338 rupiah apiece, the shares were sold at the mid-upper end of their range.
- While tech companies take a battering worldwide, GoTo seems to be flourishing in Southeast Asia’s largest economy.
- It had about 2.5 million registered drivers and 14 million registered merchants as of September last year.
- Still, it reported losses of about $550M (7.5T rupiah) for the first seven months of 2021, on revenue of 2.5T rupiah.
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 Despite funding setbacks during the 2008 financial crisis, seed-stage investment continued to grow, eventually producing a new wave of innovation. Crunchbase data shows that a similar dynamic was at play during the pandemic-induced collapse. More: - Over 16,000 seed-stage companies raised funding in 2014 compared to fewer than 1,000 companies in 2006. The growth converted holdings in seed-stage companies' equity into an institutional asset during the Great Recession.
- That was at the same time that general startup funding collapsed in 2008, not recovering to its 2007 levels until 2011.
- The total funding volume for Series A-C fell between 40% and 47% in 2009 compared with a year earlier.
- The number of unique companies funded at those stages also fell between 26% and 28% during the same time frame.
- The effects of the pandemic were mixed: In 2020, Series A funding fell from $46B to $44B, while Series B saw a $2B uptick to $48B in annual funding. Series C, in fact, grew around 18% in 2020 versus 2019.
- Just a year later, funding exploded with 93% growth at the Series A stage and 132% growth for Series C funding in 2021.
- About 30,000 venture-backed startups received funding in 2021, almost 10 times more than the 3,500 in 2006.
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The SEC announced that crypto exchanges will soon have to report the tokens held on their balance sheets as liabilities. The rule change is in line with SEC Chairman Gary Gensler's previous statements calling investors' holding on exchanges unsecured loans to those companies. More: - According to the SEC, crypto exchanges function the same way as securities exchanges: They hold assets on behalf of investors.
- Publicly traded crypto firms will now have to record the digital tokens they hold in custody for customers as assets and their obligation to the customers as liabilities.
- The switch is intended to bring consistency to reporting but could have unintended consequences:
- For example, Coinbase currently holds $287B in tokens and currencies for customers. It, however, only reported $21.3B of assets and liabilities on its balance sheet.
The wider lens: - As crypto companies increasingly pile onto the investment scene, they have tended to raise capital based on their own assets.
- The rules could thus have a substantial effect on how much capital crypto companies can pump into other startups.
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 Today's Funding 💸 AI/ML - Black Crow AI (New York, N.Y.), no-code machine learning infrastructure company: $25M A led by Imaginary Ventures, participation from Left Lane, Good Friends, Interplay, Red Antler, Primary Venture Partners.
Biotech/Health - Jeenie (Washington, D.C.), platform that connects clinicians and patients to live interpreters on-demand: $9.3M A led by Transformation Capital.
Blockchain - FoggyStar (Nicosia, Cyprus), crypto casino brand: $5M from undisclosed sources.
ClimateTech - Manifest Climate (Toronto, Canada), climate intelligence SaaS+ platform: $24M A led by BDC Capital Women in Technology Venture Fund, Climate Innovation Capital, participation from OMERS Ventures, Golden Ventures, Garage Capital, et al.
- Emitwise (London, U.K.), global carbon management startup: $10M A led by Xplorer Capital, participation from Outsized Ventures, True Ventures, ArcTern Ventures.
Cybersecurity - Apono (Israeli), access management solutions to manage permissions: $5M Seed led by Meron Capital, participation from YYM, Booster Ventures, et al.
Data/Analytics - GRC (Austin, Texas), single-phase immersion cooling for data centers: $28M led by SK Lubricants.
Edtech - Electives (Boston, Mass.), marketplace that collects data for teachers: $8M A led by Accomplice, G2O Ventures, participation from Boston Seed Capital.
Fintech - Yonder (London, U.K.), credit card startup: $39.4M Seed led by Northzone, LocalGlobe, participation from Seedcamp, et al.
- Wert (Tallinn, Estonia), payment platform that introduces direct NFT purchase with credit cards: $5M Seed led by Tagus Capital, participation from Tezos Foundation, VR Ventures, Element Ventures, Digital Horizon, JDAC.
Gaming - Lucra Sports (San Francisco, Calif.), P2P sports gaming platform: $10M A led by Raptor Group, participation from SeventySix Capital, Victress Capital, et al.
Logistics - Wiz Freight (India), digital cross-border supply chain management: $36M Equity/Debt led by Tiger Global.
Proptech - Minut (Malmö, Sweden), sensor that monitors noise, occupancy, motion, and temperature in vacation rental properties: $14M B led by Almaz Capital, participation from Zenith, Kompas, Verve Ventures, Swiss Immo Lab, et al.
- Jia Finance (Washington, D.C.), online residential mortgage platform for foreign investors: $5M Seed led by TTV Capital, participation from Stanford Angels, et al.
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 |  | Inside VC's writer/curator Stephen currently lives in Berlin and is pursuing a Master's degree in philosophy. He otherwise spends his time trying his hand at recipes from India and Southeast Asia, escaping it all at the kickboxing gym, and offending aural sensibilities with his band. |  | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford. | |
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