The deployment of venture capital in Europe in 2022 followed the trend of the global pullback, but the decline was milder at 25% as opposed to 36% and 39% declines in North America and Asia, respectively. Investors believe that the European markets lag behind the U.S., resulting in a softer decline and that the true impact of the pullback may only become fully apparent in Q1 2023. More: - European startups raked in $90B in funding in 2022, down from its peak of $119B in 2021.
- Late-stage funding — which had grown threefold in 2021 — saw the biggest decline in 2022, down 45% YoY in Q4.
- Funding in Q4 2022 dipped 46% YoY, with the pullback impacting early-stage startups the most, which saw investment halved to $5B compared to the previous year.
- Investors are expected to scale back their investments in Europe, especially in late-stage startups, in 2023.
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In the final quarter of 2022, venture funding for Asian startups fell 58% YoY, resulting in a 39% decrease in annual funding compared to the previous year. The total funding deployed for the year was $108B, a decrease from the record-setting sum of $177.2B in 2021. More: - In Q4 2022, Asian startups raked in $21.7B in funding, less than half of the $51.7B secured in the same quarter a year ago.
- Despite being less than a year ago, funding in Q4 was up slightly compared to $21.4B raised in Q3 2022.
- The largest funding drop was seen in the growth stage and late-stage deals, with Q4 2022 ending at $10.4B, down 68% YoY from $32.4B in Q4 2021.
- In contrast, angel and seed round funding increased by 24%, ending the year with $7.6B.
- Venture funding in India declined by a third, while funding for China came in below 2020’s totals.
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Indian mobile payments startup PhonePe has raised $350M so far in a new round at a $12B pre-money valuation, with the firm expecting to raise another $650M before closing the round. PhonePe’s valuation has more than doubled over its last $5.5B valuation from late 2020. The incoming funds will help accelerate the firm’s growth, with the firm entering new business verticals like insurance, wealth management, and lending. In addition, the firm will invest in building infrastructure like data centers. More: - The first tranche is led by General Atlantic, with existing backer Walmart expected to participate in the current round.
- PhonePe’s annual revenue figures are slightly below $450M.
- The firm has a 40% market share in the Unified Payments Interface (UPI) mobile payments sector in the nation and has over 400 million registered users.
- Indian e-commerce giant Flipkart sold its stake in PhonePe last month.
Zoom out: - Publicly listed rival Paytm is targeting $1B in annual revenue this fiscal year and has a market cap of $4.2B.
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Facebook co-founder Eduardo Saverin's venture capital firm B Capital has received $2.1B worth of commitments from limited partners towards their latest fund. The firm aims to invest in global growth-stage companies across healthcare, fintech, software, and other sectors. More: - Saverin co-founded B Capital along with Raj Ganguly in 2015.
- The firm will continue writing individual checks ranging from $10M to $100M as before, although they are investing at "much better valuations than before," according to Ganguly.
- Ganguly expects M&A transactions for corporates to increase in 2023.
- Last November, B Capital's portfolio company aiMotive was acquired by automaker Stellantis NV.
- B Capital has partnered with Boston Consulting Group to advise startups on liquidity events.
Zoom out: - B Capital's assets under management now total $6.3B.
- Notable portfolio companies include Indian edutech startup Byju's and machine learning startup DataRobot.
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Peter Thiel's venture capital firm Founder Fund made $1.8B by liquidating the vast majority of its cryptocurrency portfolio in March 2022, just before the crypto markets started to nosedive in May, according to Financial Times. The San Francisco-based firm has no significant exposure to cryptocurrency now, per sources close to the matter. More: - The liquidation of Founders Fund's cryptocurrency bets, not reported previously, was surprising given that Peter Thiel was bullish about Bitcoin prices, expecting them to increase 100 times, in April 2022.
- Founders Fund has been investing in Bitcoin since early 2014, with Bitcoin accounting for two-thirds of its overall investments in cryptocurrency.
- Including the liquidation of the crypto bets, Founders Fund was able to return $13B to investors at the end of last year by exiting eight more investments, like Airbnb and Palantir.
Zoom out: - Market sentiment towards cryptocurrency has soured since the fallout of crypto firms like FTX, Three Arrows Capital, Terraform Labs, and Celsius Voyager.
- Institutional investors like Andreessen Horowitz and Paradigm raised crypto startup and token investing funds worth $4.5B and $2.5B, respectively, but have slowed their pace of investing due to the existing market conditions.
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Venture capital firm Lightspeed has hired Moritz Baier-Lentz to lead the investments under its newly formed gaming division. With Baier-Lentz on board, the firm will invest out of its $7B early- and late-stage funds into gaming studios, platforms, interactive and immersive technologies, extended reality, and Web3 startups. More: - Baier-Lentz joins from BITKRAFT Ventures, where he was instrumental in making the firm the most active gaming sector-focused venture capital firm.
- He previously served as a vice president at Goldman Sachs and advised on Dell’s $67B acquisition of EMC and IBM’s $34B acquisition of Red Hat.
- Lightspeed has over $18B worth of assets under management.
- The firm has made more than 500 investments to date across the U.S., Europe, and Asia.
- To date, the firm has made 30 investments in the gaming sector totaling over $300M.
- Late in the first quarter of 2023, Lightspeed aims to launch its gaming-specific website, Lightspeed Gaming.
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Quick Hits: - Giving dry a try this January? Do it for less. Experience great-tasting non-alcoholic beer without the hangover! Enjoy $10 off your first purchase.*
- Pitchbook data shows that U.S. startups led by all-women teams secured $4.5B in funding in 2022, only 1.9% of the overall venture capital allocated. In the year before, all-women team startups received 2.4% of the overall funding.
- Courtside Ventures has received investor commitments worth $100M for its latest fund aimed at backing sports startups and related categories like media, fitness, and technology.
- Steven Barlett, popularly known as one of the investors on the British TV show Dragons' Den, announced a $100M fund, dubbed The Flight Story Fund, to back European startups. The firm will back startups across blockchain, biotech, health, commerce, technology, and space sectors, with individual tickets ranging from $1M to $10M.
- German real estate sustainability-focused venture firm PropTech1 Ventures has raised €44M ($44.5M) so far for its new fund against a target of €100M ($107.9M).
- Swiss space debris removal startup ClearSpace secured €26.7M ($28.8M) in fresh funding from its OTB Ventures-led Series A funding round.
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- January 25 - Amanda Natividad speaks on zero-click content, how to measure it, and other trends to keep tabs on in 2023. (Register Here) *
- January 26 - Growth Experimentation Workshop: From Strategy to Process by GrowthHackers.com (Register Here)
- January 29 - Inside Interview with Lacework - 4 Common Attack Paths in Cloud Security (Register Here)
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- January 31 - AMA with Gun.io - Building and managing software development teams w/ Deividi Silva (Watch On Demand)
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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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