Two proposed bills to limit the outflow of American capital are currently being reconciled by House and Senate negotiators. The first bill, which was passed by the House earlier this year, allows scrutiny of investments made by U.S.-based companies in "countries of concern", a category which includes China. It includes a provision to block outbound funding in certain cases. Legislators released a revised draft last week, with a narrowed focus on screening deals across critical industries. More: - Critical industries include semiconductor manufacturing, mineral mining and export, pharmaceuticals, large capacity battery manufacturing, artificial intelligence, and quantum computing.
- The bill has faced criticism over the broadness of the proposed mandates and the lack of any provisions for non-domiciled foreign entities including joint venture businesses in China.
- U.S.-based venture capital firms participated in deals worth $36.5B in China last year, considerably higher than the $25.1B worth of deals contributed in 2020.
- The majority of U.S. venture firm investment was concentrated in AI and biosciences startups.
- In 2021, U.S. venture firms participated in 115 deals worth $9.8B and 74 deals worth $6.5B in the Chinese AI and biotech sectors respectively.
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 Greenoaks Capital Partners, Index Ventures, and Coatue Management have each reduced their investments into late-stage startups by at least 30%, per Pitchbook venture data analyzed by The Information. The report notes that due to losses in their public portfolios, crossover firms—investment companies that began as private equity or hedge funds—such as Tiger, Coatue, and Index have reduced their venture capital investments the most. More: - The following is a roundup of the firm’s investments across Series C and above late-stage deal startups:
- Tiger participated in 50 deals this year, which decreased its funding count by 17% and brought its total funding to $5.7B, less than half of what it was during the same time last year.
- Tiger has matched its investment count for early-stage startups.
- Greenoaks participated in five deals this year, down from 13 in the same period a year ago.
- Coatue funding round participation reduced from 28 deals last year to 18.
- Sequoia Capital matched its tally with the same period last year by participation in 25 late-stage funding deals.
- It co-led The Boring Company’s $675M Series C fundraise in May and later led $100M Series C in Glean, an enterprise search engine platform.
- After raising a new $4B fund earlier this week, Accel, whose deal count fell to 24, is anticipated to take part in new deals and to offer portfolio companies follow-on funding.
- The most active investment firm right now in the U.S. investing across all stages is Andreessen Horowitz, which took part in 62 funding rounds totaling $6.1B in the first quarter followed by 46 funding rounds worth $2.5B in the following quarter.
- Notable late-stage deals participated in include Ultima Genomics’ $600M and SpotOn’s $300M Series F.
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 US Biotech & Pharma sector venture funding The biotech and pharmaceutical sector, which continued to receive backing from investors throughout the pandemic and the recent venture capital pullback, is now showing signs of slowing down. The industry secured $28.2B and $30B in funding in 2020 and 2021 respectively. Despite a strong funding trend that was visible in Q1 of this year, venture funding did decline in Q2 with the current period recording $5.2B in funding across 193 deals. More: - Late-stage companies have seen a greater funding pullback compared to early-stage startups, in line with the general trend in venture funding across all industries.
- Pitchbook’s report emphasizes that a weak macroeconomic environment is an underlying cause for the decline in funding, despite the industry's high demand for new medicines.
- Greg Yap, a partner at Menlo Ventures, expects the M&A activity in the industry to pick up, with the market now primed for large biotech and pharmaceutical companies looking to acquire innovative drug research startups at a lower valuation.
- He predicts that there will be an increase in partnerships where several larger companies pay for clinical trials and other forms of research in smaller firms, in exchange for a fraction of the drug's value.
- Pharmaceutical company Eli Lilly recently provided $20M in upfront capital to Genesis Therapeutics, with an additional $670M on offer for other trials.
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NASDAQ-listed personal finance products recommendation platform NerdWallet entered a definitive agreement to acquire On the Barrelhead for $120M. The transaction, expected to close in the third quarter, consists of $70M in cash with the remaining $50M to be provided as NerdWallet’s Class A common stock. Colorado-based On the Barrelhead provides credit-driven product recommendations to consumers and SMBs. More: - Post-closing, On the Barrelhead, will be fully integrated into NerdWallet, with the acquisition expected to strengthen NerdWallet's product offerings.
- NerdWallet has earmarked a separate $30M pool as a compensatory bonus to retain On the Barrelhead’s management.
- On the Barrelhead has grown 90% YoY and generated $38M in annual revenue at the end of last year, with $5M in net income.
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Online shopping rewards platform ShopBack secured $80M in financing, bringing its total funds raised to date to over $230M. The Series F funding round was led by Asia Partners with backing from January Capital. The firm intends to use the proceeds from the current funding to accelerate product development, further increase its presence in the Asia Pacific region, and bolster its public-market readiness. More: - The Temasek-backed company is used by over 35 million customers across 10 nations including Singapore, Malaysia, Thailand, Australia, and South Korea.
- Annual transactions topped $3.5B.
- Other notable existing backers include Rakuten Capital, EV Growth, Cornerstone Ventures, and 33 Capital.
- The Singaporean firm acquired Hoolah to provide BNPL payment options to customers.
- Additionally, it introduced its ShopBack Pay payment service in Australia and Singapore.
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Triptyq Capital, a venture capital firm located in Montreal, Canada, has announced the launch of its first fund to support companies providing technology solutions for the creative economy. The fund, which has an initial size of $40M, has secured backing from several notable limited partners including Investissement Québec, Groupe Lune Rouge, National Bank of Canada, Behaviour Interactive, KO Capital Croissance, and PHI, amongst others. More: - The fund aims to bridge the venture funding gap in Quebec’s digital creative industry.
- Triptyq aims to invest in startups working on developing and scaling applied technological solutions for the creative industry.
- The Canadian firm expects to invest in around 20 seed stage startups.
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- Israeli venture capital firm Greenfield Partners closed a new $350M fund bringing its assets under management to over $500M. The new Fund II will invest in 15 Series B- and C- stage startups across fintech and consumer/ internet domain.
- Presto Ventures, a British venture capital firm, raised a $36.8M (€30M) fund to back 40 B2B seed and pre-seed stage startups across Central and Eastern Europe.
- Chinese bio-manufacturing firm Mojia Biotech closed its Series B funding round with $80M in financing. LYZZ Capital, Sento Investment, Bits x Bites, and Asia Green Fund participated in the Temasek-led funding round.
- Automated product security platform Jit raised $38.5M in seed funding led by boldstart ventures. The funding saw participation from Insight Partners, Tiger Global, and TeachAviv.
- British battery energy storage company Connected Energy raised $18.4M (£15M) in financing. Volvo Energy, Caterpillar Venture Capital, the Hinduja Group, Mercuria, Engie New Ventures, Macquarie, and the Low Carbon Innovation Fund contributed to the fundraise.
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 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | | | Editor | Gregory Bridgman is a writer and researcher with an academic background in politics and the philosophy of science and technology. He holds a BA from the University of Cape Town, an MS from University College London, and is currently completing a PhD at the University of Cambridge. He is interested in climate issues, technological changes, and the implications of the fourth industrial revolution. | |
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