The Information has learned from sources that prominent venture capital firms Sequoia Capital and Andreessen Horowitz will invest $800M and $400M, respectively, in Elon Musk's acquisition of Twitter. In the last few months, Musk tried to back out of the deal but reversed his decision and intends to proceed at the initially proposed price of $54.20 per share. Since Musk reversed his decision, the judge has given him until Oct. 28 to complete the acquisition. The case was initially scheduled to go to trial on Oct. 17. More: - A U.S. SEC filing from early May named Saudi Prince Alwaleed bin Talal and Oracle co-founder Larry Ellison as the two largest investors in the deal, followed by the venture firms named above.
- Cryptocurrency exchange Binance is poised to invest $500M in the deal.
- In total, Musk has received equity investment commitments of up to $7B.
- According to the report, Musk will himself invest "tens of billions of dollars" in the deal.
- The remaining $13B from the total acquisition price of $44B is expected to come through a debt facility.
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Startups are raking in debt funding despite rising interest rates. In the current environment, most startups prefer debt funding to raising equity at a lower valuation. From the beginning of the year until Sept. 29, roughly 1,900 startups in the U.S. raised $22.4B in debt funding. While equity funding continues to drop, debt funding is on pace to touch 2021's levels. More: - In the entire last year, startups borrowed $30B through debt facilities.
- In recent times, startups are borrowing capital through traditional debt facilities – that have monthly or balloon repayments – rather than convertible notes or other credit arrangements.
- Lightspeed Venture Partners' Arif Janmohamed says that startups taking in debt funding may have to curtail their growth plans due to the associated repayments and other restrictive covenants.
- Startup financing firm Runway Growth Finance reports that an increasing number of late- and growth-stage venture-backed companies are leveraging debt financing to extend their cash runways as IPO prospects remain unfavorable.
- Debt funding is starting to look like a riskier option for startups, given the likelihood that the Federal Reserve will introduce further interest rate hikes.
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Market intelligence platform Tracxn’s data shows that startups in India raised $3B in Q3 2022. Funding in the recent quarter was down 80% YoY. In comparison, global funding has dropped 53% YoY. The funding drop comes despite new funds raised this year by India-focused venture firms reaching record levels. More: - Notable venture firms that have raised India-focused funds include Sequoia India, Lightspeed Venture Partners, Accel, and Elevation Capital.
- The number of funding rounds halved in Q3 compared to the same time last year.
- Individual check sizes also contracted, with late-stage venture firms raking in 70% less than Q3 last year.
- In 2021 Q3 average funding rounds for late-stage firms in India was $142M, which dropped to $42M in Q3 2022.
- Tracxn co-founder Neha Singh predicts that the venture slowdown in India will last for the next 12-18 months.
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Q3 2022 saw funding for cybersecurity startups decline for the fourth consecutive quarter. The quarter ended with $2.6B in funding, the lowest since $1.6B in Q3 2020. Despite the dip, overall funding so far this year has surpassed the total venture capital raised in 2020. More: - Startups have nabbed $13B in total funding in the year, compared to $8.9B in all of 2020.
- While individual check sizes of Series A and above rounds have decreased, average funding has increased for seed-stage investments.
- Q3 saw only seven funding rounds greater than $100M.
- Notable funding rounds during the quarter include Coalition's $250M funding round, Acronis' $250M financing, and Verkada's $205M Series D round.
- Cybersecurity investments initially showed resilience to the global venture dip.
- However, funding for the sector has dipped in recent quarters due to the geopolitical climate.
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Early-stage venture firm NextView Ventures received $200M in capital commitments toward two new funds. $135M of the capital is earmarked for an early-stage fund, with the remaining $65M for an opportunity fund. The firm expects that two of the five investments from the new fund will be into startups led by founders from minority or underrepresented backgrounds. More: - 62% of the firm's previous $100M fund was invested in startups co-founded by minorities and women.
- San Francisco-based Stephanie Palmeri, formerly a partner at All Raise and Uncork, was roped in as an equal partner in NextView Ventures.
- Palmeri is tasked with expanding investments into the Bay Area.
- The firm historically has invested 25% of its funds into California-based startups.
- The firm has invested 40% of its funds into New York-based startups.
- NextView Ventures' portfolio consists of 173 startups.
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Business accounts and online payments solutions provider Airwallex secured $100M in Series E extension funding. The firm retained the same $5.5B valuation as the initial $200M Series E fundraiser in September 2021. According to earlier reports, the firm was looking to raise between $100M to $150M and had lined up talks with investors, including Visa. More: - The current financing is the second Series E extension financing, making the round an E-2 funding round.
- The firm secured $100M in Series E extension funding in November 2021, with Lone Pine Capital leading both the initial Series E funding and the first extension round.
- New investors HostPlus and an undisclosed North American pension fund participated in the funding round along with existing backers Tencent, Salesforce Ventures, Sequoia Capital China, 1835i Ventures, Hermitage Capital, Square Peg, and Lone Pine Capital.
- The firm intends to use the fresh funds to fund global expansion and develop new products.
- In addition to China, Australia, Japan, the U.K., and the U.S., Airwallex operates in another 14 countries.
- In total, the Australian firm has garnered more than $900M in funding, of which $600M is still in the bank, according to Airwallex.
- Airwallex is aiming for an IPO in 2024.
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- Clinical-stage precision medicine biotech firm Neumora Therapeutics closed its Series B round with $112M in funding. The round saw participation from Abu Dhabi Growth Fund, ARCH Ventures Partners, F-Prime Capital, Mubadala Capital, and Polaris Partners, amongst others.
- Natixis Investment Managers’ subsidiary Mirova acquired a 25% stake in Spanish EV charging infrastructure provider Zunder after investing $97M in the firm.
- Section 32 led a $45M Series B funding round into cybersecurity firm Stairwell. Sequoia Capital, Accel, Lux Capital, and others backed the funding.
- Cybersecurity firm Endor Labs nabbed $25M in seed funding led by Lightspeed Venture Partners, Dell Technologies Capital, and Sierra Ventures.
- AI-powered revenue growth management platform Insite AI emerged from stealth with a $19M Series A led by NewRoad Capital and M12.
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 |  | 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. | |
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