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| Hey Insiders, Today we are taking a look at ADQ's minority stake acquisition in Sagard, the U.S. VC funding slump, and Notion Capital's latest €300M fund. Scroll down for some quick hits, and then let us know what other content you'd like to see in future issues. Karan
p/karan-chafekar | |
| 1 | | Abu Dhabi's state investment firm ADQ and Bank of Montreal are reportedly planning to acquire minority stakes in Canadian VC and PE firm Sagard, per Reuters. Additionally, existing shareholder Great-West Lifeco will increase its stake in the firm. The trio has also made long-term capital commitments to strengthen Sagard's fundraising potential and help launch new products. More: - Sagard has over 125 companies in its portfolio and $14.5B worth of assets under management (AUM).
- Sagard's CEO and Chairman, Paul Desmarais III, said, "Strategic partner capital enables us to attract high-quality investment teams, launch new investment strategies, and fundraise more rapidly. In addition, this will expand our global network, making us even stronger business partners for our portfolio companies."
- The transaction is set to conclude in the third quarter of this year, subject to regulatory approvals.
- After the transaction is completed, Power Corporation of Canada will remain the controlling shareholder of Sagard.
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What the numbers say: VCs deployed $39.8B into U.S. startups in Q2 2023, down 48% YoY from last year's tally of $76.6B. The highest drop in funding was seen in angel and seed rounds, which initially showed resilience to the dip. Angel and seed funding rounds nearly halved from the year before. Relevance: Larger startups saw 196 funding rounds, consistent with the 210 rounds closed in the same period a year ago. Most startups opted for extension rounds, which helped them keep the exact valuations and terms from the preceding round. Where to see the impact: U.S. startups generated $5.5B in exit value in Q2 2023, accounting for nearly a tenth of the global exits worth $51.5B that closed in the quarter. Exit values for U.S. startups remained low due to the shuttered IPO market. Asian startups generated most of the exit values. VCs themselves are facing the effects of the tight fundraising environment, as U.S.-based VCs have raised just $33.3B worth of funds so far this year. At this rate, fundraising will likely fall short of 2017's totals by this year's end. | | | |
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| 3 | | Notion Capital closed its fifth fund, Notion Capital V SCSp, at the hard cap of €300M ($326M). The fund will back early-stage business software and fintech startups across Europe. Notion expects to back 20 investments in Series A and beyond startups. More: - The Euro-denominated fund has already backed Bound, DataOps, M3ter, and Resistant AI after the fund's first close last year.
- New limited partners Cortes Capital, KfW Capital, Shelby County Tennessee Retirement System, and TNO Pension Funds backed the fund along with existing backers British Patient Capital, Novo Holdings, RSJ, and others.
- Notion promoted Itxaso del Palacio to general partner and Stephanie Opdam and Kamil Mieczakowski to partner roles.
- The firm expects to start raising its third opportunities fund in 2024.
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| 4 | | Insight Partners secured $118M in capital commitments towards its second 20/20 Vision Fund. The fund will invest in VC funds launched by underrepresented fund managers. More: - Insight Partners' employees had pledged $15M to the first 20/20 Vision Fund launched in 2020.
- The first fund backed 14 VC funds established by women, Black, Latinx, and LGBTQ managers.
- The second Vision Fund has already deployed capital into funds launched by Act One Ventures, F7 Ventures, Ansa Capital Management, Hannah Grey Ventures, Wischoff Ventures, and others.
- Limited partners that backed the latest fund include the Massachusetts Pension Reserves Investment Management Board, the Pennsylvania Public School Employees' Retirement System, the Teachers' Retirement System of the State of Illinois, and the New York State Common Retirement Fund.
Zoom out: - Female-led VC funds nabbed only 2.6% of the total $170.8B worth of funds raised by U.S. VC firms last year.
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| 5 | | Sienna VC held the first close of its latest fund at $100M, against a target of $250M. The fund will exclusively invest in Israeli early-stage technology startups. Individual ticket sizes will range between $5M and $15M. More: - The fund will primarily invest in AI, cybersecurity, fintech, digital health, food tech, and agritech sectors.
- Belgian holding company Groupe Bruxelles Lambert (GBL) is the primary investor in the fund.
- Thomas Visan and Mikaël Pereira have also contributed capital to the fund.
- The fund has already backed three startups: Hourly.io, DouxMatok, and SupPlant.
- Sienna VC's founder Amiel Azoulai said, "We believe that the best way to access leading technology companies is not only through Silicon Valley or the United States in general, where American funds dominate, but also through Israel, which is the second-largest technological hub in the world."
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| 6 | | Today's Funding: Biotech - German biopharmaceutical startup TolerogenixX GmbH closed its Series A funding round at €12M ($13M). DB Speciality GmbH joined existing backers Kalodion Fond I, CventureS, Nisus, and others in the current round.
Fintech - New York-based on-demand pay solutions fintech startup Claire nabbed $175M in fresh funding, including a $25M equity round led by Thrive Capital. Upfront Ventures and Kairos participated in the funding round.
Insurtech - Embedded insurance orchestration platform Qover raised $30M in Series C funding from Anthemis, Alven, Kreos Capital, and Zurich Global Ventures.
Robotics - Japanese robotics startup Telexistence Inc. secured $170M in Series B funding from SoftBank, Globis Capital Partners, and a fund set up by Hon Hai Precision Industry and CTBC Financial Holding.
Supply chain - CADDi, a Japanese startup that operates a B2B marketplace for the manufacturing industry, raked in $89M in Series C funding from Globis Capital Partners, DCM Ventures, JAFCO, Mitsubishi UFJ Capital, and others.
Wellness - German smart workout equipment maker EGYM raised €207M ($225M) in Series F funding led by Jared Kushner's investment firm Affinity Partners. The funding will be provided in two tranches, with €107M ($116M) to be transferred immediately and the remaining €100M ($109M) on hold until later. The first tranche gave the firm a post-money valuation of €600M ($652M).
- Ten Thousand, a New York-based men's activewear clothing manufacturer, raised $21.5M in Series A funding led by Provenance, with additional support from Fernbrook and Alfa.
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- Good Capital announced a new $50M second fund, with an additional greenshoe option of $25M. The firm aims to back AI startups with the new fund.
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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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