The last few years provided a good opportunity for venture firms and private investors to cash out their investments buoyed by the uptick in IPOs. Of the several venture-backed firms that were listed on the public market since 2020, 140 have seen their market capitalizations fall below the amount of venture funding raised throughout the years. While the S&P 500 dropped by 24%, the slide has been far worse for venture-backed companies. VC-backed IPOs witnessed a 57.7% decline this year, per Pitchbook’s index. More: - Co-working spaces company WeWork's current market capitalization is $3.7B, almost a third of its $9B valuation on its IPO debut in October last year.
- The company had secured $9.9B in venture funding since its establishment.
- As per Crunchbase's figures, the firm has raised $21.9B in total funding when considering all of its post-IPO equity, debt funding, and venture capital rounds over the years.
- The firm’s current valuation is in stark contrast to its peak valuation of $47B in 2019.
- Other notable companies to lose significant valuation include Faraday Future and Bird Rides, currently bearing a market capitalization of $710M and $150M respectively.
- Faraday has raised $3B in venture funding, while Bird Rides has raised $1B.
- The knock-on effects of the reduced valuations are being felt by new early-stage startups–looking to raise seed and Series A investments– and established companies who were expected to launch an IPO offering soon.
- Earlier this month, Chinese company ByteDance saw its valuation plunge by $100B. It currently hovers around the $300B mark.
- The company has reportedly shelved its plans to go public for the time being.
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In the first half of 2022, global e-commerce venture capital funding topped $20B, down 42% from the same period last year. The e-commerce industry garnered $78B in venture capital in 2021, with Amazon aggregator Thrasio recording the highest fundraise of the year at $1B. E-commerce companies are now experimenting with brick-and-mortar and omnichannel businesses, as customers start returning to in-store shopping. More: - In the first quarter of 2022, online transactions accounted for 14.3% of total retail sales in the U.S, according to a report released by the Census Bureau.
- As nations worldwide have rolled back all pandemic-related restrictions, the customers have gone back to shopping in-stores as their online channel dependency fades away.
- In-store visits to retail outlets Target and Costco in May were 13.5% and 4.1% higher respectively than in the same period in 2019.
- E-commerce and online payment facilitators who thrived in 2020 and 2021 are witnessing their valuations drop.
- Klarna is in talks to raise money at a 70% lower valuation than its previous round.
- The company’s current valuation is estimated to be $15B, down significantly from its $46B peak in June last year.
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While venture funding across all sectors continues to drop, investment in the climate tech sector is expected to remain strong. Last year, the sector amassed $53.7B in funding, driven by huge investment in electric scooters and alternative protein startups. Few industry insiders, however, are apprehensive about the sector's prospects for this year, citing the sharp decline in cleantech funding that occurred after the 2008 recession. ESG equity funds also witnessed an investor pullback in May earlier this year. More: - However, the times are different now, with investors optimistic about the sector's prospects in light of rising fuel prices.
- Co-founder of Voyager Ventures, which unveiled a $100M climate tech-focused fund in April this year, says her firm continues to invest in the sector despite the downturn.
- Investor Peter Gajdoš of Fifth Wall venture capital firm informed Bloomberg that although some limited partners have reduced their funding, many if not most still continue to allocate funds to climate tech ventures.
- He is confident that funding will remain strong, noting that “The oceans are warming up. The forests are burning. These problems are still there, and someone needs to solve them, which creates opportunities.”
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Blockchain gaming technology company Immutable announced a $500M inaugural venture fund to back web3 and NFT startups. Several of Immutable’s venture partners provided capital for the new fund while Immutable itself poured funds from its cash reserves and grants. The company intends to partner with other prominent sector investors, namely Animoca Brands, Arrington Capital, Double Peak, King River Capital, and GameStop, to seek out future investment opportunities. More: - Immutable’s venture arm has invested in several firms to date, including StarkWare, Stardust, PlanetQuest, and Topology. However, the company thinks it's the right time to invest in web3 gaming and expects many mid-market gaming developers to pivot into the web3 sector over the next two years.
- The Australian company recently secured $200M from a Temasek-led Series C funding round bringing its total funds secured to date to $279.8M.
- It received a $2.5B valuation at the funding round which closed in March this year.
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Online grocery delivery startup Rohlik raised $231M (€220M) in Series D funding led by Sofina. The Czech Republic-based startup claims its current financing valuation was higher than the $1.2B (€1B) valuation it received during its preceding Series C fundraise, which catapulted the firm's valuation into unicorn territory. Rohlik will use the new funding to accelerate product development, incorporate automation into its fulfillment centers, increase adoption of electric mobility, and fuel expansion into existing markets. More: - Existing investor Index Ventures and Rohlik founder Tomáš Čupr backed the funding which brings the total raised by the firm to $611.2M, as per Crunchbase's figures.
- Index led the ~$119M (€100M) Series C funding round in July 2021.
- Rohlik’s annual revenues have steadily climbed from $315M (€300M) in 2020 to $525M (€500M) in 2021, with its markets in Hungary and Czech Republic proving to be profitable.
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Lightning AI, an AI/ML development and infrastructure lifecycle platform, closed its Series B with $40M in funding. Coatue led the financing and was joined by Index Ventures, Bain, First Minute Capital, and Mantis VC. The company intends to use the proceeds to further develop its platform, advance AI research, expand its team, and support its user community. More: - To date, the New York-based firm has raised $58.6M in total funding, with its last fundraise coming in the form of an Index Ventures-led $18.6M Series A financing in Oct. 2020.
- Lightning AI, formerly known as Grid.ai, was started by William Falcon and Luis Capelo in 2019.
- The company is known for developing the PyTorch Lightning framework, a high level interface for Facebook’s deep learning framework PyTorch.
- Since publishing the tool as open-source software, the framework has had over 20 million downloads and is leveraged by an estimated 10,000 companies.
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- Cryptocurrency lending platform Celsius is unlikely to get a funding lifeline from WestCap and Caisse de dépôt, who led its previous $750M Series B funding round at a $3B valuation. The firm, which is having trouble meeting its obligations to lenders, paused all transactions on its platform last week and is reportedly evaluating its restructuring options.
- LGT Capital Partners closed its inaugural impact fund with $550M in capital commitments. The Crown Impact fund, which will invest across climate action, inclusive growth, and healthcare sectors, received considerable interest and closed above its initial target of $350M.
- Indian esports fantasy platform FanClash raised $40M in Series B funding led by Alpha Wave Global, joined by Sequoia Capital India, Info Edge, and Polygon.
- Footballer Paul Pogba participated in fintech platform Wahed Inc’s latest $50M Series B fundraising. Saudi Aramco Entrepreneurship Center’s venture arm Wa’ed Ventures led the funding round.
- New investor MultiPlan Corporation led a $28M Series C funding round into Abacus Insights, a Boston-based healthcare intelligence data platform. Other funding round participants include Blue Venture Fund, CRV, .406 Ventures, and Echo Health Ventures.
- Santa Barbara, Calif.-based clean energy company C-Zero raised $34M in funding led by SK Gas with participation from Engie New Ventures, Trafigura, Breakthrough Energy Ventures, Eni Next, Mitsubishi Heavy Industries, and AP Ventures.
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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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