There is a growing expectation that M&A activity will pick up next year, with many venture-backed startups faced with the prospect of either running out of cash or being acquired for a fraction of their last valuation, per Pitchbook. Startups may drive M&A activity as private equity firms and publicly traded companies take advantage of the macroeconomic situation. More: - During 2021, 323 U.S. venture-backed startups were acquired by other U.S. venture-backed startups, representing a total deal value of $6.3B.
- By mid-Nov 2022, there were over 213 M&A deals involving venture-backed startups, representing a total deal value of ~$700M.
- The most notable deals this year were Plaid's acquisition of Cognito for $250M and AlphaSense's acquisition of Sentieo for $185M.
- Gorillas, a startup that offers quick grocery delivery, is in talks to buy rival Getir for $1B, or one-third of its $3B peak valuation.
- Oak HC/FT co-founder Andrew Adams advises portfolio startups, "If there is product-market fit, but you can't scale it, then it's good to find a home for it."
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Binance launched the Industry Recovery Initiative (IRI) to rescue crypto startups struggling in the wake of the FTX fallout. Binance has made an initial $1B commitment split across three tokens: Bitcoin, Binance USD, and Binance Coin. Notable crypto venture backers Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have backed the fund with a $50M initial commitment. More: - The majority of the funding will be provided via cryptocurrency. Still, the firm is also open to financing via fiat, equity, convertible instruments, debt financing, and credit lines depending on individual situations.
- The firm may increase its commitment to $2B if required.
- Alpha Impact’s CEO Hayden Hughes believes, “There’s too much uncertainty in the market for the recovery fund itself to be the catalyst that turns everything around.”
- The application period for IRI will run for six months, and Binance has already received 150 applications.
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Pitchbook's recent report indicates that 337 startups, a quarter of global unicorns, are on the verge of losing their unicorn valuation status due to the global economic downturn. Many such firms were brimmed with cash from last year and have been able to avoid down rounds so far, which has protected them from lowering their valuations. However, Pitchbook believes that such startups risk having their valuations trimmed and possibly losing their unicorn status when they eventually raise financing in such a tough market. More: - In 2021, the top 10% of American startups could expect to reach a unicorn valuation of over $1B by year-end.
- 2021 saw a record-setting 584 unicorns established throughout the year. The number has been lower this year, with only 300 new unicorns minted.
- There are more than 1,200 unicorns, with a cumulative valuation of $4.2T.
- As exit opportunities remain limited and venture funding retreats continue, Pitchbook expects more extensive markdowns in valuations to occur next year.
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Japanese venture capital firm JAFCO Group Co Ltd. announced it would buy back $310M (42B yen) of shares through a tender offer. Activist investor Yoshiaki Murakami and a group of shareholders in JAFCO were the driving forces behind the move and pressured the firm to announce buybacks. It is reported that the group will liquidate its entire stake, totalling 19.53%. More: - To pay for the buybacks, JAFCO is liquidating its entire 3.9% stake in Nomura Research Institute, a subsidiary of Japanese bank Nomura Holdings.
- Nomura was a significant investor in JAFCO after its founding in 1973.
- The activist investor group mentioned increasing their stake to 51%, which caused other investors to curtail their contribution to JAFCO’s funds.
- The group had demanded that JAFCO fund 50B yen of buybacks from its NRI share sale proceeds.
- Reuters’ estimates show that the firm had 52B yen worth of NRI shareholdings on Thursday.
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Singaporean crypto trading platform Matrixport Technologies expects to raise $100M in fresh funding at a $1.5B valuation. The firm has reportedly received commitments of up to $50M from investors. The firm is looking for additional investors to provide the remaining funding. More: - Information about lead investors and participants in the funding round is currently unknown.
- Billionaire Wu Jihan founded Matrixport after spinning off the firm from his crypto mining company Bitmain in 2019.
- Matrixport provides crypto trading to institutional and retail clients.
- The firm cemented its unicorn status, crossing the $1B valuation mark during its $100M Series C round in Aug. 2021.
- C Ventures, DST Global, and K3 Ventures were the lead investors in the round.
- Notable previous backers of the firm include Tiger Global, IDG Capital, and Dragonfly Capital.
- The firm claims it facilitates over $5B in trades each month.
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Nigerian ride-hailing startup Metro Africa Xpress Inc. is in talks with investors to raise $100M in fresh funding. The fundraising is expected to continue until the end of 2023. Metro Africa, also known as Max, intends to use the proceeds to expand operations and deploy electric vehicles in its fleet. More: - Metro Africa currently operates in Nigeria and Ghana.
- It intends to expand into ten nations, including Cameroon, Uganda, and Egypt.
- Electric vehicles account for 5% of the firm's fleet, which includes 9,000 sedans and three-wheeler rickshaws.
- Max aims to make 70% of its fleet electric by 2026.
- Crunchbase data shows that the firm has raised $64.4M in total funding, including a $31M Series B round led by Global Ventures and Lightrock in Dec. 2021.
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I'm Kiani from Inside.com, and this week, we asked our venture capital community, "What are the most important elements to include in a successful pitch deck?" and received many great responses. ⭐️ Here are some notable responses we received: - Brett Kahl (p/brettkahl), Founder of LynxSystems, writes, “The Founder needs to really show they understand the solution to the problem they are solving but making it simply understandable to their audience.”
- Dan Greenberg (p/dan805415) adds to make sure to include answers to the following questions:
- What problem are you solving and how much is it worth to someone to have it solved?
- Why are you the team to solve it first/better?
- How will you manage to breakeven, even if breakeven (and/or any funding round) is delayed 6-12 months?
- Why is your solution better, faster, cheaper?
- A couple of members Margie Traxler (p/margie), Founder and CEO of Grain Free Mama’s, and Mark Montalban (p/markmonta), Founder and CEO of MindfulText, mentioned that your pitch deck is a document that keeps changing. Margie writes, “That said, there are some parts that are super important every time. (1) Attention grabbing story or statement, (2) the market size and earning potential, and (3) how your investor is going to make money.”
Do you have an element to include in a successful pitch deck? Let us know! We hope you had a safe and happy Thanksgiving yesterday! Join the conversations at Inside.com and we may shout out your name and business or contact you for more. ⭐️
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- Globally, consumer industry startups were able to rake in $432.3M in venture funding in Oct. 2022, down 30.5% compared to the previous month.
- Representatives of the Indian Venture and Alternate Capital Association (IVCA) urged India's finance minister Nirmala Sitharaman to introduce measures in the 2023-24 budget announcement to allow perpetual capital funds to operate nationwide.
- Web3 game development platform Midnight emerged from stealth with a $7.5M seed funding led by Shima Capital.
- Existing investors Medtech Convergence Fund, Action Potential Venture Capital, OrbiMed Advisors, and SV Health Investors provided $14M venture funding to Alpheus Medical, a biotech firm developing a treatment for brain tumours.
- Seven women-led startups, namely Edarkstore, Uils, Beeok, Mamotest, Cirkula, ClicRural, and Aictive, joined venture firm Impacta VC's Fundraising Strategy Program.
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 |  | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | | | Editor | Liam Gill is a founder, lawyer and investor.
He previously founded Fumarii Technologies, which became a top 20 ranked cloud computing service (Yahoo Finance! 2019) valued at over $30M. He holds an LLB Laws (UK), MSc Management and Master of Laws and currently practices law in Vancouver, Canada.
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