| Hey Insiders, Today we are taking a look at the private fundraising slump in the Asia Pacific region, how drone delivery startups are defying the VC funding dip, and Energize Ventures' $300M fund. I hope you enjoy today's edition! Karan
p/karan-chafekar | |
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Asia Pacific-based private capital investment firms raised funds worth $34.6B in the first half of this year, per Preqin data reviewed by Bloomberg. The funding haul for H1 represents 22% of last year's annual tally, indicating a significant decline in fundraising activity. At the current rate, fundraising will likely hit a 10-year low at the end of this year. More: - The drop in private capital fundraising can be attributed to several factors, including aggressive monetary tightening, heightened borrowing costs, and rising concerns of global recession.
- The downturn has been aggravated by a retrenchment in China-focused funds.
- China-focused funds raised $115.9B worth of aggregate capital in Q2, down from the previous quarter's total of $141.9B.
- Private equity fundraising was highest in Japan, ending the second consecutive quarter at the top spot.
- PE fundraising doubled in the Asia Pacific region from $2.7B in Q1 to $5.6B in Q2, buoyed by an uptick in exit values from $5.6B to $8B across the same period.
- However, VC fundraising continued to decline in line with the global trend, ending the second quarter at $4.5B.
- This was largely down to a 54% QoQ drop in China-focused VC funds, which ended the second quarter with $2.7B.
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What the numbers say: Global drone delivery startups secured $1.51B in VC funding so far this year, per Crunchbase. The funding has nearly matched last year's annual figure of $1.6B, indicating that drone startups have defied the global VC funding dip. Globally VC funding dipped by 51% QoQ in Q2. At the current rate, funding could also exceed the record high of $2.2B set in 2021. Relevance: San Francisco, Calif.-based drone delivery startup Zipline nabbed $330M in Series F funding earlier this February, making it the largest round for the sector so far this year. Competitor Skydio took the second spot, nabbing $230M in Series E funding the same month. German electric unmanned aircraft startup Wingcopter raised $44M from European Investment Bank in May. Where to see the impact: The implications of these investments are significant as the industry enters an inflection point, where several larger players, such as Amazon, Walmart, and Google, are also looking at drone delivery programs. As drone technology continues to advance rapidly, there is a growing potential for drone delivery to expand beyond its current niche status and begin servicing residential areas soon. | | | |
| 3 | | VC firm Energize Ventures secured $300M in capital commitments towards its new growth equity fund. The firm also rebranded to Energize Capital to reflect that its strategy now includes making growth-stage investments. The firm typically backs climate software startups. More: - Despite a decline in the broader climate tech sector, Energize Capital's managing partner John Tough remains optimistic about the sector's potential.
- He said, "The opportunity for climate software has skyrocketed beyond expectations."
- The new fund brings the firm's assets under management to $1.2B.
- Last week, Energize led a $100M funding round into Lithuanian solar SaaS startup PVcase, along with Elephant VC and Highland Europe.
- Earlier this February, Energize and Coatue Management co-led a $200M investment into solar software startup Aurora Solar at a $4B valuation.
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| 4 | | Indian VC firm Together Fund launched a $150M fund to back early-stage SaaS and AI startups in India. The fund size is nearly twice as big as Together's first fund, which closed at $85M in 2021. More: - To date, the firm has backed 20 startups, including three investments made in the past three months.
- Eka Software Solutions co-founder Manav Garg, Freshworks' CEO Girish Mathrubootham, Matrix Partners executive Shubham Gupta, and Accel executive Avinash Raghava founded Together Fund.
- Individual checks into seed and Series A startups will range between $1M and $5M.
Zoom out: - Garg said, "AI adoption could create $7T in global economic growth over the next 10 years, as Goldman Sachs says, and native AI startups will fuel enterprise adoption of AI."
- He added that India –which currently has 3,500 SaaS startups generating $7B in revenue– is ideally positioned to seize the AI opportunity.
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| 5 | | Foundry Technologies, a startup providing servers to clients to run AI models, is in talks with investors to raise fresh funding through a Series A round at a $350M valuation, sources told The Information. The valuation expected at the upcoming round is seven times higher than its previous valuation. More: - Foundry was valued at $50M when it raised a seed round late last year.
- Sequoia Capital and Lightspeed Venture Partners are reportedly co-leading the new funding round.
Zoom out: - The AI sector is seeing a rush of investments from prominent investors, such as Lightspeed and Sequoia, causing valuations to balloon, similar to the trend seen in the fintech and crypto sectors between 2020 and 2021.
- Lightspeed is leading EvenUp's new funding round at a $500M valuation, nearly 43% higher than its $350M valuation just three months ago.
- If successful, the funding will mark Sequoia's 15th AI startup investment this year.
- "Valuations are stratospheric," cautioned Venky Ganesan, a partner at Menlo Ventures, which has backed over half a dozen AI startups in the first half of this year.
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| 6 | | Today's Funding: Cybersecurity - Protect AI, a startup that guards AI and ML applications against security vulnerabilities, data breaches, and emerging threats, closed its Series A round with $35M in funding. Evolution Equity Partners led the funding round with participation from Salesforce Ventures, Acrew Capital, Boldstart Ventures, and others.
Energy - British battery energy storage systems maker Field bagged £200M ($258M) in fresh funding from Dutch infrastructure fund DIF Capital Partners.
- EV charging platform ev.energy raised $33M in Series B funding led by National Grid Partners, with participation from InMotion Ventures, Aviva Ventures, WEX Venture Capital, Energy Impact Ventures, and others.
Fintech - Fintech startup Croissant raked in $24M in seed funding from Portage and KKR's co-founders George Roberts and Henry Kravis.
Healthcare - AI-powered neurovascular, cardiac, and vascular diseases diagnostics and treatment platform RapidAI secured $75M in Series C funding led by Vista Equity Partners.
Robotics - San Francisco, Calif.-based robotics startup Collaborative Robotics raised a $30M Series A funding led by Sequoia Capital.
Software - GlossGenius, a SaaS business management platform for the wellness and beauty industry, raised a $28M Series C round at a $510M valuation. The round was led by L Catterton with participation from Bessemer Venture Partners and Imaginary Ventures.
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| 7 | | Quick Hits: - Don't miss your chance to invest in Virtuix, one of the fastest-growing startups in the booming gaming market. Invest by 8/10.*
- Medicxi raised $400M in capital for its fourth fund to back European life sciences startups.
- Vehicle fleet management company Wex Inc. will invest $100M into EV sector startups until the end of 2025 through its newly launched VC division called Wex Venture Capital.
- Food and beverage company Agthia Group PJSC launched its corporate venture capital arm, Agthia Ventures, in partnership with its parent company ADQ. The firms have earmarked $54M (AED 200M) for investments.
- Early-stage accelerator 9Unicorns announced an event called ProStar, which aims to give portfolio growth-stage startups a platform to raise additional funds from Indian VC and PE firms.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Eduardo Garcia | |
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