Pitchbook’s Q3 Venture Monitor data shows that 67% of the funding in the U.S. is raked in by three states, namely California, New York, and Massachusetts. Funding remains concentrated across a few states, which is why some firms are launching funds that will invest specifically in underfunded states. AZ-VC launched a $100M fund today to back Arizona-based startups. Background: - So far this year, Californian startups have raised $90B in funding, more than three times the funding raised by New York-based startups.
- Meanwhile, Texas, Washington, Virginia, and Arizona have raised $7.7B, $6.3B, $2.2B, and $1.0B, respectively, so far this year.
- Statewise funding data can be found here.
- In the last decade, 75% of the funding was nabbed by California, New York, and Massachusetts.
Share your thoughts: - Which states in the U.S. have the most untapped potential for venture funding?
- Due to the rise of remote startups, will funding be less concentrated in the three major states?
- Will funding move away from the three states, given the rise in venture funding for fields such as climate tech, agri tech, and energy?
- Will new venture firms crop up with funds focused on underfunded states?
Click here to post your responses.
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European venture funding declined 43% in Q3 2022 compared to the same quarter in 2021 due to economic turmoil in the U.K., France, and Germany. The U.K. suffered the largest slump in Europe, with funding down 60% QoQ. Sifted’s data show that the U.K. received $3.7B in funding in the quarter, followed by $2.6B each for Germany and Sweden and $2.5B for France. More: - Germany’s startup ecosystem saw a 33% quarterly drop in venture funding.
- VC funding in France fell to its lowest level in 15 months.
- Meanwhile, other European regions such as Italy, Sweden, Spain, and Ireland raised more funding than in the same quarter a year ago.
- Italy received a record-setting $840M in venture funding in the quarter, topping the cumulative figure for the entire of 2020.
- Fintech and healthtech startups in Europe continued to rake in the most funding in Q3, with 257 and 250 deals averaging $21M and $17M, respectively.
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Avataar Venture Partners announced its second fund, with the firm targeting a $350M close. The fund will invest in SaaS and B2B technology startups in growth stages. More: - The firm is looking to invest $10M to $50M in Indian startups with annual recurring revenue of more than $10M.
- Avataar will help the firm scale to over $100M ARR.
- The firm claims that three of its portfolio companies have already reached the $100M ARR target.
- The firm debuted with a $300M Fund I in 2019 and later raised a $100M follow-on fund.
- Notable firms in its portfolio include Amagi, ElasticRun, RateGain, and Capillary.
Zoom out: - The Indian SaaS market is forecasted to take between 7% and 10% of the global SaaS market share by 2025, according to an EY-CII report.
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Stability AI, the organization behind AI-powered digital art platform Stable Diffusion, raised $101M in funding. Coatue Management, Lightspeed Venture Partners, and O'Shaughnessy Ventures led the seed funding round. Sources told Bloomberg that the firm received a unicorn valuation of $1B at the recent funding. More: - The firm intends to use the funding to develop additional open AI models, increase computing power, and double its workforce to over 300 employees.
- Stable Diffusion is an AI-powered text-to-image generator competing with the likes of DALL-E 2.
- The firm reports that the platform has over 10 million daily users.
- Its consumer-facing product, DreamStudio, has seen over 1.5 million users.
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Phoenix, Arizona-based venture capital firm AZ-VC closed its debut fund with $110M in capital commitments. The fund was launched by Jack Selby, a former PayPal executive turned venture capitalist. The sector-agnostic fund will exclusively invest in Arizona-based startups. More: - According to Selby, Arizona has the potential to launch many technology startups due to its business-friendly policies.
- Limited partners in the new fund include many Arizona-based investors, particularly real-estate focussed investors.
- Pinnacle West Capital’s subsidiary Arizona Public Service invested $25M in the fund.
- AZ-VC will invest in 20 startups, with individual check sizes topping $5M.
- The firm has already invested $3M into Mosaic and an undisclosed amount into Uplinq.
- Selby has previously invested his own funds into SpaceX and Affirm Holdings.
- Selby will continue to be a managing director at Peter Thiel’s venture firm Thiel Capital.
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Alteria Capital received $120M in capital commitments at the first close of its latest venture debt fund. The fund is the Indian firm’s third fund to date. Founder Vinod Murali told Nikkei Asia that he expects to double the amount before the final closing of the fund. With the new fund, the firm’s assets under management now total $475M. More: - Murali and Ajay Hattangdi, both former InnoVen Capital executives, established the firm in 2017.
- The firm closed its second fund in April 2021 with $242M in capital commitments.
- For its debut fund in 2019, Alteria raised ~$116M in funding.
- Alteria Capital is one of the key venture debt providers in the region, along with InnoVen Capital, Stride Ventures, and Trifecta Capital.
Zoom out: - The move comes as venture capital for Indian startups dropped by 57% in Q3, totaling $2.8B.
- In addition to extending their cash runway, Murali anticipates more startups in the region will take out venture debt to fund capital expenditures, international expansion, and acquisitions.
- In 2021, 91 organizations in India secured $538M in venture debt, per Stride Ventures.
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Quick Hits: - You might have an amazing product and team, but you’ll struggle with your next funding round if you’re weak on this one metric.*
- Venture funding for Georgia-based startups dropped by 28% in Q3 2022.
- Orthopedic implants manufacturer Ossio closed its Series C funding round with $38.5M in financing led by MVM Partners.
- Supply chain automation robotics manufacturer Ambi Robotics received $32M in additional funding. Tiger Global led the funding along with Bow Capital.
- Cambridge, Massachusetts-based biotech company Surge Therapeutics nabbed $26M from its Camford Capital-led Series A funding round. Participants in the fundraiser include Khosla Ventures, HealthTech, 8VC, Alumni Ventures, and others.
- AXA IM Alts led a $26M Series A funding round into AI-powered digital health firm Eyenuk.
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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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