The median valuations for late-stage startups in the U.S. fell by 29% between Q1 and Q3 of this year, according to the U.S. Valuations Report published by Pitchbook. The median pre-money valuation of late-stage startups in Q3 was $71M. Median public listing valuations for exits in 2022 were $317.2M, the lowest it's been in the past three years. More: - Deal terms have become more investor-friendly due to the drop in funding and valuations, with many new deals in recent months having higher downside protections.
- Valuations of seed-stage startups and early-stage startups remained flat compared to last year at $10M and $45M, respectively.
- Valuations of seed-stage startups outside the Bay Area, New York, Los Angeles, and Boston regions increased by 33% from last year.
- Median early-stage valuations peaked at $60M in Q1 2022.
- At the end of June 2022, there was $73B in cumulative dry powder available in funds less than $250M.
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The Information’s analysis of SEC data revealed that the market capitalizations of nine publicly listed technology companies have plummeted to less than the total venture funding raised by respective firms. These firms were all chasing growth, which led to high cash burn rates. Many of the businesses in the worst-performing group are labor-intensive and may not be able to be profitable without a massive scale. More: - Due to the curtailed funding in 2022, all valuations dropped this year, especially for those firms that have not yet demonstrated profitability.
- Root, an insurance tech firm backed by Tiger Global Management and Ribbit Capital, has a market cap of over $100M, a sixth of the $674M venture funding invested into the firm before it went public in 2020.
- At its IPO, Root was able to raise an additional $1.1B in funding.
- Other recently listed firms like Rent The Runway, SmileDirectClub, Oscar Health, The RealReal, ThredUp, Compass, and Rackspace Technology have seen similar drops in their respective market caps.
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New York-based early-stage-focused venture capital firm Distributed Ventures hired Joe Flanagan as a growth partner and Alex Carvalho as an associate. Flanagan is tasked with mentoring Distributed’s portfolio companies. Carvalho will further the firm’s investments in the fintech and insurtech sectors. More: - Distributed, which spun out from NFP Ventures, invests primarily in fintech, insurtech, and digital health startups between seed to Series B stages.
- The firm recently seed funding rounds for Posterity Health and Armadillo.
- Distributed also participated in seed funding rounds of Ascend and Covertree.
- Flanagan will help portfolio companies refine their go-to-market strategies and achieve business milestones.
- He is known for establishing the insurance agency JP Flanagan Corporation, which was acquired by Hub International.
- Carvalho previously worked with an early-stage venture capital firm, assisting the firm with its tech-enabled businesses.
- He was formerly an investment banking associate at Deutsche Bank.
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Biopharmaceutical startup Zenas BioPharma raised $118M in financing from its Series B funding round. The Waltham, Massachusetts-based firm intends to use the funding to advance its autoimmune disease therapeutics pipeline and move its lead candidate into phase 3 clinical trials. The new funding was led by Enavate Sciences. More: - Participants in the fundraiser include Longitude Capital, Vivo Capital, Rock Springs Capital, and Pivotal bioVenture Partners, amongst others.
- The firm had last raised a Series A round in March 2021, where it secured an undisclosed amount.
- Late last year, the firm acquired exclusive rights to the drug obexelimab from Xencor.
- The backloaded deal is valued at $480M, subject to clinical, regulatory, and commercial milestones.
- Xencor held a 15% stake in Zenas, previously valued at $16M.
- The licensing deal allowed Xencor to maintain its 15% stake in the firm without dilution in the current financing round.
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Biotech-focused venture capital firm Catalio Capital Management secured $85M in capital commitments toward its latest fund, Credit Opportunities Fund I. The new fund will provide structured equity — including convertible debt, preferred equity, and other hybrid financings — and debt financing for biomedical technology startups in North America. More: - The company was spun out of Camden Partners in 2020 and raised over $50M for its debut fund.
- Catalio was initially planning on raising a $200M private credit fund last year but swiftly changed its strategy and downsized the fund after market conditions worsened.
- According to the firm, existing investors have contributed 80% of the new fund’s capital.
- It has already deployed half of the fund.
- Rather than invest in traditional vanilla venture debt, the firm focused on structured equity and credit investments, which usually have a higher equity participation potential.
- Catalio has over $1B in assets under management.
Zoom out: - Catalio follows in the footsteps of other asset managers like Coatue, Viking Global Partners, and JPMorgan, which have pivoted into venture debt funding in recent months.
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French marketing technology and automation firm Positive Group raised $110M in fresh financing from growth fund EMZ Partners, with participation from IDI. The firm intends to use the proceeds to back acquisitions and boost its growth. In addition to digital business marketing, the firm also develops conversational marketing solutions and sales engagement software. More: - Positive Group, previously known as Sarbacane, acquired customer data platform solution maker Marketing 1BY1.
- The acquisition is the firm’s third in the past two years.
- It acquired SMS and email marketing platforms Mailify and rapidmail.
- The firm is on track to rake in $30M in annual turnover this year.
- Positive expects annual turnover to touch $100M by 2026.
- Positive Group nabbed $45M funding in September 2020, led by IDI.
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- Venture capital investment in crypto startups dipped below the $1B mark in October, according to JPMorgan.
- French agtech e-commerce company Agriconomie raised $60.5M (€60M) in Series B funding co-led by Treïs Group, Temasek, and Aliment Capital.
- Redwood City, California-based biotech firm Juvena Therapeutics secured $41M in additional Series A funding. Mubadala Capital and Horizon Ventures co-led the fundraising.
- Chiplet interconnector manufacturer Eliyan raised $40M in Series A funding led by Intel and Micron.
- Riverstone Holdings Latin America, Alliance Resource Partners, Caterpillar Venture Capital, and Cottonwood Technology Fund provided $30M in growth capital to Infinitum.
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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. | |
Laika is a unified compliance platform that automates workflows for audits, infosec monitoring, and vendor due diligence in a single, collaborative space. | |
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