Notable venture firms, including Accel, Lightspeed Venture Partners, Sequoia Capital, and Andreessen Horowitz, are scooping up public tech stocks amidst the market slump. Some traditional venture capital firms have started registering as investment advisors in a bid to own more public stocks and cryptocurrencies. In addition to buying stocks of startups they previously backed, firms are also acquiring shares of other promising companies that were not in their portfolio earlier. More: - Sequoia was able to acquire 2.5 million shares of Amplitude and 573,500 shares of DoorDash at a 60% discount from their respective peak prices.
- The firm started buying shares as soon as the market began to dip.
- Sequoia followed a similar strategy during the 2008 crash.
- Andreessen Horowitz purchased 1 million shares of Block and 1.4 million shares of DoorDash.
- A16z purchased the shares from the $5B capital it raised for its growth fund.
- In the first quarter of 2022, Thrive Capital purchased 812,713 shares of Carvana.
- In subsequent months, the New York-based firm doubled its stake.
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The Information has learned from two sources that Coatue Management is in the process of launching a third fund to back early-stage startups. The firm is targeting $500M in capital commitments by year-end. If successful, the amount would match the capital raised for the firm's second early-stage-focused fund. More: - Coatue Management co-founder Thomas Laffont will oversee the investments from the new fund along with the chair of Coatue Ventures, Dan Rose.
- The New York-based firm has decided to focus on early-stage investments after some of its late-stage bets faced valuation cuts and the firm's hedge fund lost 18.7%.
- Meanwhile, the firm noticed that its early-stage bets have started to pay off, most notable of which are Figma, which was acquired by Adobe for $20B, and Ramp, which is nearing decacorn valuation.
- With the new fund, Coatue will primarily back artificial intelligence, machine learning, fintech, and climate tech startups.
- In 2019, the firm launched a $700M first early-stage fund.
Zoom out: - Like Coatue, other institutional venture firms, namely Tiger Global Management, Lightspeed Ventures, Bessemer Venture Partners, and Founders Fund, announced that they would start focusing more on early-stage startups.
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Venture capital investors' confidence in proptech firms reached an all-time low, according to MetaProp's Global Proptech Confidence Index. At mid-year in 2022, the investors' confidence index topped at 5.8, significantly lower than the peak index figures of 9.3 in mid-2021. Venture capital funding for startups is expected to reach $26B at the year-end. More: - In 2021, proptech startups were able to rake in $32B in funding.
- With real estate prices rising and interest rates at record lows, the industry prospered in 2021.
- However, the environment has changed significantly since last year,
- Interest rates, which were as low as 2.65% in January 2021, have soared to 6.7% on 30-year mortgages in September 2022.
- About 71% of startup founders said they expect a tough fundraising environment over the next 12 months.
- Venture firms expect the funding to return to "historical normal" this year.
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Crunchbase data show the European startup secured $16B in funding during the third quarter. The funding is down 44% YoY and 35% QoQ, in line with global venture funding trends. The quarterly funding is the lowest since Q4 2020 when funding totaled $13.4B. More: - In 2021 Q3, venture funding topped at $28B.
- In Q2 of 2022, venture funding amounted to $24B.
- Early-stage funding, which showed resilience to the funding dip throughout the first half of this year, saw the highest decline in the current quarter, plunging by 40% QoQ.
- Late-stage funding dropped by 25% QoQ.
- Seed and Series A stage funding remained level compared to 2021, while Series B onwards funding has seen the highest retrenchment.
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U.S.-based digital health startups received $2.2B venture capital in Q3 2022. Venture capital invested in startups in the last quarter was the lowest since Q4 of 2019, when firms raked in $2.1B in funding. The sector saw record levels of investment during 2020 and 2021 as demand for virtual healthcare, telemedicine, software-based therapeutics, and health technology soared during the pandemic. More: - Digital health startups have nabbed $12.6B in the first three quarters of this year.
- The sector saw investments totaling $29.2B and $14.7B in 2021 and 2020, respectively.
- Individual check sizes have shrunk this year, with average funding rounds being $27.4M this year as compared to $39.7M last year.
- Despite the dip, Northwestern Mutual Future Venture's managing partner Craig Schedler believes this year will still be a "really good year" for digital health startups.
- He added, "What you're seeing is that later-stage froth or over-exuberance, that's gone."
- The majority of the investments this year have been into digital healthcare startups developing nonclinical workflow solutions, increasing the efficiency of healthcare practices, reducing staff turnover, and treating employee burnout.
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Uniswap Labs raised $165M from a Series B funding round. Polychain Capital led the funding, with backing from A16z crypto, Paradigm, SV Angel, and Variant. The firm was valued at $1.66B at the recent funding. More: - TechCrunch reported earlier that the firm was looking to raise between $100M and $200M in funding.
- DeFi Llama’s data shows that the decentralized crypto exchange accounts for over 64% of DEX volumes.
- Uniswap’s native token has a current market cap of nearly $5B.
- At its peak last year, the token had a market cap of $22.5B.
- The firm intends to develop new products, including an NFT trading platform.
- Uniswap’s governance community, called the Uniswap Foundation, intends to invest $60M into community projects over the next few years.
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- Vidavo Ventures roped in Mastercard’s executive vice chairman Gilberto Caldart as a venture partner. Caldart is tasked with leading the firm’s climate fintech investments.
- Biotech firm Odyssey Therapeutics raised $168M in Series B funding, bringing the firm’s total funds raised to date to $386M. General Catalyst led the Series B funding round.
- New York-based fintech startup NorthOne received $67M in Series B funding from Battery Ventures, Ferst Capital Partners, Next Play Capital, Redpoint Ventures, Tencent, and others.
- Revere Partners, which exclusively invests in oral health startups, roped in Mark Zuckerberg’s father, Dr. Edward Zuckerberg, and American Dental Association’s former executive director, Dr. Kathy O’Laughlin, to lead the firm’s dental and systemic health investments. The firm intends to reach $200M in assets under management with its new funds.
- Estonian ERP software developer Katana secured $35M in Series B financing led by Northzone. Participants in the funding include Lightrock, Atomico, and 42CAP.
- Metalenz, a supplier of optics to 3D sensing product manufacturers, nabbed $30M in Series B funding led by Neotribe Ventures.
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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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