What the numbers say: M&A activity in the crypto sector surged by 10% YoY in Q1 2023, with 54 transactions recorded in the quarter, per advisory firm Architect Partners. The number of M&A transactions registered in Q1 2023 reached an all-time high, crossing the previous record of 53 transactions set in Q4 2021. Per Michael Ashe, head of investment banking at Galaxy Digital, the "active pipeline of mandates [is] representing over $1B in potential transaction value." Where to see the impact: Nearly 65% of the transactions involved one crypto firm acquiring another. Firms with surplus capital are strategically acquiring cash-strapped startups to bolster their assets. Equity stakes are a common component of M&A transactions in businesses trying to conserve cash. The majority of the M&A deals involved crypto infrastructure firms. 
What's driving the change: M&A activity has risen due to the slump in VC funding for the crypto industry. VC funding for the sector plunged 80% YoY from $12.3B in Q1 2022 to $2.4B in Q1 2023. Ashe said, "Companies that would have been able to raise capital in a bull market are finding it difficult to do so now and are turning to M&A as an exit."
| |
In Q1 2023, VC invested $2.4B in U.S.-based Series C stage startups, down 74% YoY compared to $11B invested in the same time last year. Crunchbase predicts that at this pace, funding for Series C stage firms will be 60% lower at this year's end than the $28B invested in the previous year. More: - The five most active investors in the Series C stage, namely SoftBank, Andreessen Horowitz, Tiger Global Management, Insight Partners, and Sequoia Capital, collectively participated in four Series C rounds and did not lead any such rounds in Q1 2023.
- Crunchbase reckons that investors are waiting for valuations to come down even further before commencing their earlier pace of investments.
- Series C rounds will likely pick up pace as startups that secured Series B rounds in 2020 and 2021 will probably try to raise the next round of funding this year.
- Some may have to settle for lower valuations or raise financing at non-favorable terms, per Crunchbase.
| |
 A message from DOIT Level up your Google Cloud skills with the Google Cloud Cookbook. Ideal for system engineers and administrators, developers, network and database administrators, this book will enable you to: - Gain hands-on experience using practice examples and labs
- Explore topics that include BigQuery, Cloud Run, and Kubernetes
- Build and run mobile and web applications on Google Cloud
- Build a minimum viable product (MVP) app to use in production
Download your complimentary copy of the cookbook today. Get Your Copy
| |
San Francisco-based AI startup OpenAI concluded a tender offer, allowing workers to liquidate their employee profit units by selling them to investors, sources told The Information. An earlier WSJ report estimated the value of the tender offer to be nearly $300M. The company's implied valuation during the tender offer was close to $27B based on the share prices. More: - Investors will purchase profit units from employees, which guarantees them rights to future profits made by OpenAI.
- In January earlier this year, VC firms Thrive Capital and Founders Fund were reportedly in talks to buy shares through the tender offer at a $29B valuation.
- The profit-sharing structure of the units changed recently after OpenAI received a multi-billion dollar investment from Microsoft in January 2023.
- The deal gives Microsoft a right to 75% of OpenAI's profits until its principal investment is paid back, after which it will split the profits with employees and investors.
- OpenAI expects to rake in $200M in revenue in 2023 and $1B in 2024.
Zoom out: - In 2021, Sequoia Capital, Bedrock Capital, and Andreessen Horowitz acquired stakes in OpenAI through a secondary offering at an implied valuation of around $20B.
| |
Define Ventures secured $460M in capital commitments for two funds to back digital health startups. The capital will be spread between an early-stage-focused Fund III and a growth-stage-focused Opportunity Fund. The fundraising brings the firm's total assets under management to around $800M. More: - Fund III will invest in early-stage startups from seed to Series B stages, while the Opportunity fund will make follow-on investments in portfolio startups.
- Define Ventures' portfolio includes 21 startups, the most notable of which are women's health startup Tia, wellness brand Hims & Hers, virtual LGBTQ health startup Folx Health, mental health startup Concert Health, and hospital software maker Unite Us.
- Founder and managing partner Lynne Chou O'Keefe started fundraising for the current funds in Q2 2022, at the same time the venture funding retrenchment started.
Zoom out: - VC invested $15.6B in the digital health sector in 2021, which halved to $7B the following year, per Pitchbook.
| |
 A message from MONOGRAM The $19.4B joint replacement market may be entering a new era, and this company is hoping to lead the way. It is estimated that up to 50% of joint replacements will be robotic by 2030 and Monogram is aiming to have the first active navigated robotic arm on the market. And you can invest in the company ahead of their planned Nasdaq listing. With 100,000 failed joint replacement surgeries every year, we believe that this market has been due for a realignment. Surgeons have been forced to rely on the same technology, like hand saws and generic-sized joint implants for the last 40 years. Monogram’s surgical robots and 3D-printed joint components are hoping to up the ante when it comes to personalization and precision. They’ve already demonstrated how their surgical system works on cadavers in front of 5,000+ live viewers, they have 20 patents filed, and 17,000+ people have previously invested. Join Monogram ahead of their intended NASDAQ listing. Invest Now
| |
Canadian VC firm BDC Capital launched a $150M Sustainability Venture Fund to help the nation accelerate its transition to a net-zero economy. BDC will invest in SaaS, hardware-enabled software, and software startups that are working on sustainable cities, responsible production, climate action, and clean energy. More: - The firm intends to back Series A and B-stage startups across Canada.
- BDC's new fund will work in conjunction with the firm's existing $400M Climate Tech Fund II.
- BDC Capital is the venture investing division of the Business Development Bank of Canada.
- The parent group has committed $1.8B in sustainability initiatives, which includes $1B for its cleantech and climate tech funds.
- BDC Capital has over $6B worth of assets under management (AUM).
Zoom out: - BDC estimates that Canadian firms will need between $60B and $140B of investments every year to reach their net-zero targets by 2050.
| |
Palo Alto, California-based cybersecurity startup Safe Security secured $50M in Series B funding. Proceeds from the funding round will enable the firm to expand operations and further develop AI tools in its platform. More: - Sorenson Capital led the funding round with participation from Western Technology Investment, Telstra Ventures, and Eight Roads.
- CEO Saket Modi co-founded the firm in 2012 to identify cybersecurity vulnerabilities in organizations.
- In 2018, the firm made a pivot into developing software that analyzes the gaps in the company's existing cybersecurity infrastructure to determine the probability of an attack and its likely impact on business functions.
- To date, the firm has raised more than $100M in venture funding.
- Modi said that the firm had witnessed 200% growth for three consecutive years.
Zoom out: - The U.S. SEC proposed two recommendations last year that, if passed, would require financial institutions and publicly traded corporations to notify the regulator of any cyberattacks they experience and to have elaborate strategies in place to deal with them.
| |
Quick Hits: - Say goodbye to silos. With Miro, teams can sync, flow, and feel the connection of working side by side, even in remote and hybrid work environments.*
- Odeko, an online ordering system for restaurants and shops, secured $53M in Series D funding led by B Capital, with participation from GGV Capital, Tiger Global Management, Amex Ventures, and FJ Labs.
- Lightspeed Venture Partners led a $53M Series C round into software security startup Semgrep, formerly known as r2c. Felicis Ventures, Redpoint Ventures, and Sequoia Capital participated in the round.
- German biotech firm Ariceum Therapeutics secured €25M ($27.4M) in Series A extension funding co-led by Andera Partners and Earlybird Venture Capital.
- SaaS data collaboration and clean room platform Optable raised $20M through a Series A round from Hearst Ventures, Brightspark Ventures, Desjardins Capital, and Deloitte Ventures.
- Emma Davies will succeed Ethan Hall as the chief investment officer for the £1B ($1.24B) endowment of Guy's and St Thomas' Foundation. Davies was the former co-chief executive at healthtech and environment tech VC firm Octopus Ventures.
- Sales pros worldwide say sales ops are key to productivity. Download the new "Trends in Sales Ops" report to learn more.*
*This is sponsored content.
| |
Upcoming Events: - April 18 - Human Resources Summit'23 (Watch Now)
- April 18 - Inside Interview with TravelBank: Why Employee Happiness Is Falling More Into The Financial Sector * (Watch On Demand)
- April 26 - The world's largest gathering that brings together all sides of the cryptocurrency, blockchain and Web3 community (Register Here) *
- April 27 - Inside.com Book Club - REWORK by 37signals (Register Here)
- May 02 - Inside Startups Coffee Break (Register Here)
*This is a sponsored listing.
| |
 |  | 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. | |
| |
Surgery won’t look the same in 10 years – invest in Monogram, the robots pioneering more precise procedures. | |
Comments
Post a Comment