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| Hey Insiders, Today we are taking a look at Bank of America's commitments to minority and women funds, Molten's markdown of portfolio startups, and why vertical startups are declaring bankruptcy. We have also rounded up the top funding rounds of this week.
Scroll down for some quick hits, then let us know what other content you'd like to see in future issues. Karan
p/karan-chafekar | |
| 1 | | Bank of America's commitments to equity investments in minority- and women-led funds have surpassed $500M. The bank's commitment is more than double its initial pledge of $200M. More: - Since the program's launch in 2020, BofA has backed more than 150 funds, which in turn made equity investments in over 1,000 companies.
- 60% of the fund managers that received backing were women.
- 65% of the fund managers backed were Black, 20% were Hispanic and Latino, and the remaining 15% were Asians.
- Tram Nguyen, global head of strategic and sustainable investments at BofA, said, "We work across our company to address critical needs in our communities, including the lack of access to capital that diverse business owners face as they start or grow their businesses."
Zoom out: - So far in 2023, startups led by Black or Asians have nabbed 0.9% of the share of the total venture capital deployed.
- While overall VC funding declined by 36%, Black-led startups faced a much steeper decline of 45%.
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| 2 | | 
VCs deployed $684M in Series B and beyond North American startups this week between June 12 to June 16, per Crunchbase data. AI startups raked in 16% of the funding this week. Climate tech, healthcare, and biotech startups nabbed 13%, 11%, and 8% of the financing, respectively. Here are the top 10 largest rounds announced this week: - Weather intelligence startup Tomorrow.io raised $87M in Series E funding led by Activate Capital, with participation from existing investors SquarePeg Capital, Canaan, ClearVision, JetBlue Ventures, and Pitango.
- AI-powered data analysis solutions provider Primer Technologies held the first close of its Series D round at $69M. Addition led the fundraiser with backing from the U.S. Innovative Technology Fund (USIT).
- Behavioral health outcomes-focused startup Octave secured $52M in Series C funding led by Cigna Ventures, Novo Holdings, and Avidity Partners.
- Solar wafer manufacturer CubicPV received $35M in fresh funding led by SCG Cleanergy, with participation from Hunt Energy Enterprises and Breakthrough Energy Ventures. The funding is part of a $103M equity financing, with the remaining sum due subject to meeting project milestones.
- Cloud cost management startup CloudZero announced a $32M Series B, bringing the total raised to $52M. The round was led by Innovius Capital and Threshold Ventures, with participation from G20 Ventures, Underscore VC, and Matrix Partners.
- Financial, legal agreements, and brokerage services provider FIA Tech $25.4M in funding from BNP Paribas, Bank of America, Barclays, Citi, Goldman Sachs, JP Morgan, and Wells Fargo.
- Chicago-based on-demand finance and accounting startup Paro raised $25M in Series C funding led by Top Tier Capital Partners. Existing backers Madrona Venture Group, Revolution Ventures, and Sierra Ventures backed the funding round.
- Income and employment verification platform Truework received $24M in equity funding through a strategic partnership with consumer credit reporting firm TransUnion.
- AI-driven risk intelligence startup Blackbird.AI nabbed $20M in Series B funding led by Ten Eleven Ventures.
- AI-chip startup SiMa.ai raised $13M in additional funding from VentureTech Alliance.
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| 3 | | British VC firm Molten Ventures has written down its stake in digital finance startups Ledger and Revolut by 22% and 40%, respectively. Per the firm's annual report, its stake in crypto wallet firm Ledger was worth £71.8M ($91.5M) at the end of Mar. 2023, down from a peak value of £91.9M ($116.4M). Additionally, Molten reduced the fair value of its stake in Revolut to £54.5M ($69M). More: - Considering all the write-downs in Molten's portfolio, the cumulative value of its entire portfolio is now £1.4B ($1.77B), down 16% YoY.
- Molten marked down its portfolio fair value considering the recent string of crypto company failures, declining digital asset prices, and regulatory crackdowns.
- Ledger defended the markdowns, saying that its prices per share have been largely stable between 2022 and 2023.
- The French firm held the first close of its fresh funding round at €100M ($109M) in March 2023, giving it a valuation of €1.3B ($1.4B).
Zoom out: - Per Pitchbook, VC capital deployment into crypto startups fell 80% from $12.3B in Q1 2022 to $2.4B in Q1 2023.
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| 4 | | Last week AeroFarms filed for bankruptcy, adding to the growing list of vertical farming startups that are collapsing due to a lack of funding, tight profit margins, and rising sums owed to creditors. AeroFarms joins the likes of lettuce grower Kalera and high-tech greenhouses builder AppHarvest that filed for court protection in April and May this year, respectively. More: - Vonnie Estes, a VP at International Fresh Produce Association, said that venture capitalists invested heavily in the sector hoping for multifold returns "without really understanding that this is actually just farming."
- With funding retreating, vertical farming operators are turning toward less capital-intensive options such as utilizing solar energy instead of LED lighting.
- The Neward, N.J.-based vertical farming pioneer AeroFarms was valued at $1.2B at its peak when it was considering an IPO debut through a SPAC merger.
Zoom out: - VCs deployed $1B into vertical farming startups last year, a figure that has slumped to just $100M so far this year, per Citigroup's AgTech investment banking head Adam Bergman.
- However, investors from the Middle East are showing interest in the sector, which could offer vertical farming startups a potential lifeline.
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| 5 | | Forty-six percent of VCs surveyed by Preqin in Q1 2023 were looking to invest in the Asia-Pacific (APAC) region, up from 32% from the same time last year. Preqin's Alternatives in APAC 2023 report suggests that the APAC region has overtaken North America as the most active region for VC. More: - APAC region's funds with vintages between 2011 and 2020 had a median internal rate of return (IRR) of 24.6%, slightly above North America's 22.5% IRR.
- In September last year, APAC's VC assets under management totaled $1.21T, surpassing North America's tally of $1.04T.
- The recent interest in APAC is driven by investment opportunities across China, India, and Southeast Asia.
- China raked in 52% of the deals within the APAC region between 2018 and 2023.
- Despite the rise in deal values, the figure still pales in comparison to Europe and North America.
- Seed rounds averaged $2.3M in the APAC region between 2020 and 2022, much lower than Europe's $3.8M and North America's $5.0M.
- The gap was also seen in late-stage rounds, with average deal sizes in APAC, Europe, and North America coming in at $53.9M, $84.2M, and $72.6M, respectively.
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| 6 | | Today's Funding: Climate Tech - Carbon-neutral metal maker Magrathea nabbed $10M seed funding led by VoLo Earth and Capricorn Investment Group.
Defense - Sequoia Capital led a $5.7M seed funding into Austin, Texas-based defense startup Mach Industries, making it the VC firm's first investment in the sector.
Fintech - Brazilian capital markets infrastructure fintech Kanastra closed its seed funding round at $13M. Valor Capital and Quona Capital co-led the funding round with additional backing from QED Investors, Collaborative, Endeavor, Latitud, and others.
Healthcare - Behavioral health outcomes-focused startup Octave secured $52M in Series C funding led by Cigna Ventures, Novo Holdings, and Avidity Partners.
Machine learning - Israeli startup Deepchecks, which tests ML models from development through production, raised $14M in seed funding led by Alpha Wave Ventures with participation from Hetz Ventures and Grove Ventures.
Transportation - Indian fleet management startup Everest Fleet raised $20M in fresh funding led by Uber.*
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- Customers Bancorp's subsidiary, Customers Bank, acquired FDIC's venture banking loan portfolio worth $631M at approximately 85% of book value.
- Digital ID verification, document collection, and eSignature solutions provider Lightico acquired customer experience solutions company Vizolution for an undisclosed sum.
- Italian Illimity Bank secured two guarantees worth €50M ($54.3M) from the European Investment Fund. The bank aims to back Italian SMEs, particularly in the sustainability, innovation, and digital transformation sectors.
- Big Idea Ventures held the first close of its New Protein Fund II at $10M against a target of $75M. Existing LPs AAK and Bühler co-anchored the fund.
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Term of the Day Data-driven attribution: Data-driven attribution is an attribution model used in marketing to measure the impact of touchpoints throughout the customer journey. Question of the Week How do you feel about the phrase "The customer is always right"? Join the conversation |
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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