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| Hey Insiders, Today's newsletter covers: - 💊 Strong fundraising environment for AI-powered drug discovery startups
- 💹 Instacart officially files for IPO
- 💰 Capital shortage may force startups to sell or shut down
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | Early-stage biotech startups leveraging generative AI solutions to discover new drugs are able to raise substantial funding despite the venture funding dip. AI-powered life sciences and biotech startups are currently working on using generative AI to create simple molecules for pill-based medicines by incorporating the laws of physics into their language-learning models. Biotech startups hope to expand drug discovery to include injections and intravenously administered drugs in the future. More: - There is a lack of solid training data to develop robust training models, per Menlo Ventures' partner Greg Yap.
- "These models are being trained on every piece of public scientific data that describes molecular interaction, but some of the data is not very clean," Yap said.
Zoom out: - Menlo Ventures recently co-led a $200M Series B funding round into Burlingame, California-based AI-powered drug discovery startup Genesis Therapeutics, along with Andreessen Horowitz.
- Genesis Therapeutics' funding round is nearly 10 times more than the $20M median VC funding deal sizes for U.S.-based life sciences and biotech startups.
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| 2 | | Grocery delivery startup Instacart officially filed for an IPO on Friday. The firm plans to list on the Nasdaq under the ticker name CART. 
What the numbers say: The firm lowered its internal valuation multiple times recently, bringing it down to $13B. The recent markdown brings its valuation to a third of its peak valuation of $39B at its funding round in 2021. Relevance: Instacart might nab a higher valuation than its most recent internal valuation, as the company claims to be profitable for the last five consecutive quarters. In H1 2023, the company has already generated $1.48B in revenue, up 31% YoY. What happened: Instacart's filing comes amidst an IPO drought lasting nearly two years. Several organizations are braving the uncertain listing market. British chip design firm Arm is eyeing a $70B valuation at its upcoming IPO. Marketing automation platform Klaviyo also filed for IPO last Friday. VCs have invested $900B into nearly 1,500 unicorn startups to date, many of which are waiting for the IPO window to open, per Crunchbase. Q: Do you think the three upcoming listings of Instacart, Arm, and Klaviyo could spark an IPO market resurgence? Join the conversation here. | | | |
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| 3 | | More than 50,000 venture-backed startups in the U.S. are at risk of "high capital shortage," per Pitchbook and Business Insider. The average time between funding rounds has widened to 1.5 years. As a result, several startups will be looking to raise additional capital by this year's end. Startups unable to raise fresh funding may end up looking at sale options or shutting down the business altogether, per Business Insider. More: - Lending startup Captain, NFT startup Recur, and edtech Web3 firm 101 are some recent startups that had to shut down operations after failing to secure fresh funding.
- Per Pitchbook analyst Kyle Stanford, "The U.S. VC market is now operating through five consecutive quarters of less capital making it to the market than is estimated to be demanded."
- Stanford adds that the capital supply deficit is primarily due to the retrenchment of crossover funds and nontraditional investors such as Tiger Global and Coatue.
- Crossover and nontraditional investors participated in less than 200 deals worth $15B in 2023, a sharp contraction over the peak quarterly values of 550 deals worth $50B participated in 2021.
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| 4 | | Data analytics platform Databricks is in talks with investors to raise fresh funding at a valuation of $43B. Negotiations for the round are still in the preliminary stages. Should the funding round materialize, the firm's valuation could surpass its last known peak figure of $38B from a funding round in 2021. More: - CEO Ali Ghodsi told Bloomberg News last week that the firm was well-capitalized but could consider raising additional capital to pursue strategic goals.
- Databricks has raised $3.5B in total funding from investors to date, $1.6B of which came in through a Counterpoint Global-led Series H funding round in August 2021.
- Earlier this June, the San Francisco-based startup acquired generative AI startup MosiacML for $1.3B.
- The firm is reportedly in talks with T. Rowe Price for the new funding round.
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| 5 | | Geek Ventures secured $23M in capital commitments from limited partners toward its debut fund. The fund aims to back pre-seed and seed-stage startups established by immigrant founders. The firm aims to back 60 startups, with individual check sizes ranging from $50,000 to $1M. More: - Geek Ventures' founder, Ihar Mahaniok, started fundraising in October 2021.
- The fund was oversubscribed and crossed the initial target of $15M.
- Limited partners that backed the new fund include Applovin's founder and CEO Adam Foroughi, PandaDoc founders Mikita Mikado and Sergey Barysiuk, and Decile Capital Premier Fund I.
- So far, the firm has backed 35 startups, including Filmustage, NewHomesMate, ShapesXR, FoodReady, and Spice AI.
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| 6 | | Today's Funding: Consumer products - German LED startup BeeOLED secured €13.3M ($14.4M) in Series A funding co-led by eCAPITAL and Innovation Industries. KBC Focus Fund, M Ventures, HTGF, TGFS, and JBN-Invest participated in the funding round.
Energy - Denver-based energy-as-a-service startup Redaptive raised $125M in fresh funding from Deutsche Bank's U.S. Private Credit & Infrastructure division.
Fintech - Canadian fintech platform for immigrants LemFi received $33M in Series A funding. Left Lane Capital led the funding round with additional support from Y-Combinator, Zrosk, Global Founders Capital, and Olive Tree.
Pet health and wellness - Pet insurance and pet wellness startup Companion Protect nabbed $27M in Series A funding led by Avanta Ventures, Liberty Mutual Insurance, and Old Republic International Corporation.
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| 7 | | Quick Hits: - Secure your home with Frontpoint's top-rated systems. Don't miss our exclusive Labor Day sale — protect what matters most!*
- Tri Ri Asset Management secured $142M in capital commitments towards its TRAM Venture Fund.
- Freight mobility startup Einride hired Corinne Aaron, the former marketing lead at Tesla, as its chief marketing officer.
- Finnish VC firm Greencode Ventures held the first close of its new fund at €40M ($43.2M). The fund aims to back European startups that are accelerating the green transition. The firm expects to nab between €60M ($64.8M) to €100M ($108.7M) before the fund's final close.
- Lei Tie joined CoVenture Management as a managing director.
- Toptal's world-class talent lets you future-proof your business with their experts in blockchain, AI, and software development.*
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Term of the Day Core Consumer Price Index (CPI): Core CPI measures the change in price of all items — less food and energy — for urban consumers. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE VENTURE CAPITAL LEADERBOARD (30 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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