 Global M&A activity for VC-backed startups The M&A activity for venture capital-backed startups was initially expected to increase due to the venture funding pullback and economic uncertainty. However, the trend seems to have reversed, contrary to initial expectations. M&A activity has dropped compared to last year. More: - So far this year, 1,600 VC-backed startups were involved in M&A deals.
- 3,000 startups were involved in global M&A deals in the entire last year.
- This year, 745 VC-backed startups in the U.S. were either merged or acquired, down from 1,700 in the last year.
- It was initially anticipated that venture capital firms would gravitate toward M&A deals as a way to liquidate their investments when portfolio startups run out of runway.
- However, many firms raised enough cash last year to extend their cash reserves and have also taken stricter measures to conserve cash.
- Despite this, some major M&A deals have occurred this year, namely Aptiv’s acquisition of Wind River for $4.3B, Sony’s acquisition of Bungie for $3.6B, and GSK’s acquisition of Affinivax for $3.3B.
- Mike Ghaffary, General partner at Canvas Ventures, expects M&A activity to pick up in Q1 next year, with some distressed deals.
| |
 Median valuation values of tech startups CB Insights released their Tech Valuations Q2’22 Report yesterday. In Q2 2022, valuations of tech startups declined compared to Q2 2021 but were still higher than in 2020. Seed and Series D stage tech startups were an exception, with their valuations increasing by 8% and 12%, respectively, over the first quarter. More: - Series A, Series B, and Series C were the startups that were hit the hardest, with their respective valuations dropping by 14%, 16%, and 10% in Q2.
- Average deal sizes and valuations across various stages for global tech startups in Q2 were as follows:
- Seed stage: Avg. deal size $3.5M, Avg. valuation $63.1M.
- Series A: Avg. deal size $16.5M, Avg. valuation $195.3M.
- Series B: Avg. deal size $137.4M, Avg. valuation $331.3M.
- Series C: Avg. deal size $70.0M, Avg. valuation $902.1M.
- Series D: Avg. deal size $113.5M, Avg. valuation $2.14B.
- Series E+: Avg. deal size $120.6M, Avg. valuation $3.11B.
- In Q2, late-stage deal volume saw a 17% QoQ drop, with projections pointing to a 29% YoY drop by the end of 2022.
- A growing number of Series C, D, and E+ deals in the U.S. are coming with increased downside protections, with 41.4% of deals in Q2 including priority payouts covenants.
| |
Crypto-focused venture capital firm Electric Capital has roped in former Securities and Exchange Commission Chairman Jay Clayton. In his role as an advisor, Clayton will guide portfolio companies on navigating the dynamic crypto regulations landscape. More: - In addition, former Federal Reserve Board of Governors member Kevin Warsh and Meta vice-president and head of research Pratiti Raychoudhury have also joined as advisors.
- Warsh will join Clayton in advising portfolio companies, while Raychoudhury will help startups enhance the user experience on their respective platforms.
- Clayton is also an advisor to Fireblocks Inc. and One River Asset Management.
- Electric Capital raised a $1B crypto-focused fund earlier this year.
- Crypto platforms backed by the firm include NFT marketplace Magic Eden, blockchain developer Mysten Labs, and crypto exchange platform Kraken.
Zoom out: - An increasing number of ex-regulators have joined crypto firms in recent times.
- Andreessen Horowitz's crypto team appointed Brian Quintenz, a former commissioner with the Commodity Futures Trading Commission, as an advisory partner.
- Bitfury's CEO Brian Brooks was formerly the Acting Comptroller of the Currency.
- Digital asset firm Securitize Inc. employed ex-SEC director Brett Redfearn as a senior strategic advisor.
| |
 U.S. Edtech funding Edtech funding spiked last year, with U.S. startups raking in $5.9B in capital from 345 deals, per Crunchbase data. However, funding has fallen sharply this year, with the year-end total expected to be lower than half of 2021’s levels. So far this year, U.S. edtech startups have closed 156 deals totaling $1.7B. More: - Globally, 488 edtech deals have been completed so far this year, helping startups in the sector secure $5.43B in financing.
- Last year, global startups received $15.85B from 1,063 deals.
- Since upskilling, online learning, and D2C platforms are still in demand, investors believe the drop in funding is due to inflated valuations rather than waning investor interest.
- The edtech sector still witnessed some mega funding rounds this year, including GoStudent’s $300M Series D, Paper’s $270M Series D, Guild Education’s $265M Series F, and UpGrad’s $225M financing.
- With new AI-enabled learning tools, enterprise learning models, and the integration of AR/VR, Owl Capital, which raised $1B in capital for edtech-focused funds, feels that the sector is on the rise.
| |
New York-based mental health care startup Alma raised $130M in fresh funding. The Series D financing brings the firm's total funding secured to date to over $220M. Thoma Bravo led the financing, joined by Cigna Ventures in participation. Incoming funds will enable the firm to expand its network of therapists and scale its operations. More: - Alma provides a unified insurance, billing, scheduling, and knowledge platform for mental health care providers with private practices.
- Over 8,000 mental-health professionals use the platform.
- Bloomberg's sources estimate Alma's valuation at $800M at the recent funding.
- Insight Partners led the firm's $50M Series C and $28M Series B funding round in Aug. 2021 and Feb. 2021, respectively.
- The Series C lead investor participated in the current funding along with other existing investors, namely, Optum Ventures, Tusk Venture Partners, Primary Venture Partners, and Sound Ventures.
| |
South Korean foodtech startup Tridge received $37.2M (50M won) in Series D funding. The firm provides a marketplace for global food and agricultural product. DSAsset led the recent financing, which values the firm at $2.7B. The firm will use the proceeds from the financing to accelerate global expansion. More: - The new funding brings the total financing secured by the firm so far to $117.7M.
- In July 2021, Tridge raised $60M in Series C funding led by Forest Partners, at a postmoney valuation of $500M.
- Currently, Tridge generates monthly revenue of between $15M and $23M, which helped increase the firm's valuation by 5.4 times.
- Its platform has 15,000 products from suppliers across 150 countries.
- The company claims its platform has 447,786 users.
- Notable global retail clients include Costco, Kellogg's, Walmart, Nestle, and Lotte Mart, amongst others.
| |
Quick Hits: *This is sponsored content.
| |
Upcoming Events: - August 30 - An overview of simulation and cloud tools in embedded software (Register Here) *
- August 31 - AMA with Sophia Amoruso (CEO at Business Class) (Register Here)
- September 07 - AMA with Andrew Gazdecki (Founder of MicroAcquire) (Register Here)
- September 09 - AMA with Jay Ryan (U.S. Federal Government Program Manager at Security Compass) (Register Here)
- September 14 - AMA with Brian Dean (Founder of Backlinko) (Register Here)
- September 21 - AMA with Kristen Ruby (Founder of Ruby Media Group) (Register Here)
- September 28 - Free Access to the Semantic Layer Summit with 30+ Enterprise Data Leaders (Register Here) *
- September 28 - AMA with Leigh-Ann Buchanan (Founder of aīre ventures) (Register Here)
- October 12 - AMA with Bill Glenn (Executive Chairman at Crenshaw Associates) (Register Here)
- October 25 - Meet Our Fund 4, an Inside.com Summit (Register Here)
*This is a sponsored listing.
| |
 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | | | 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 and 1972 Fords. | |
Comments
Post a Comment