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| Hey Insiders, Today's newsletter covers: - 🇪🇺 Lower-than-expected Europe startup bankruptcies
- 📉 33% QoQ drop in Series D+ valuations
- 💰SoftBank's acquisition of the remaining 25% stake in Arm
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | 156 European VC-backed companies have filed for bankruptcy so far this year. The number of bankruptcies is lower than anticipated, indicating the remarkable resilience shown by European startups. At this pace, the annual total for this year will be lower than last year's tally. However, investors expect bankruptcies to increase as more startups exhaust their cash reserves. More: - With the slump in VC funding, several expected the number of bankruptcies to increase as startups would run out of cash runways.
- However, startups have been able to extend their cash runways by cutting back on operational costs and securing follow-on funding from existing investors.
- Since investors allocated capital to portfolio startups, they curbed their new investments.
- As a result, only 1,619 startups could secure first-time financings this year, half the 3,876 such fundings from the same time in 2022.
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| 2 | | The median valuations of Series D and above startups slumped to $600M in Q2 2023, representing a 33% QoQ drop from the previous quarter's $900M. In Q2, valuations were 60% lower than the $1.5B median values from the same period last year. 
What the numbers say: Series D and beyond startups faced the sharpest decline in median valuations. Median valuations of Series A and Series C startups fell by 14% and 9% QoQ, respectively. Meanwhile, seed and Series B startup valuations saw a slight improvement over their respective values from the previous quarter, gaining 5% and 7%, respectively. Where to see the impact: The venture funding drop has tipped the deal terms in investors' favor. Deals across all stages saw an increase in seniority or tiered liquidation structures. In the first half of the year, 60.6% of Series D and above deals had seniority or tiered liquidation structures. | | | |
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| 3 | | Reuters reported that SoftBank is in talks with investors to scoop up the remaining 25% stake in portfolio company Arm currently held by other investors participating in its $100B Vision Fund 1 (VF1). The move could deliver immediate returns to VF1's investors, including Saudi Arabia's Public Investment Fund and Abu Dhabi's Mubadala, rather than waiting for Arm's planned public listing to liquidate holdings. More: - The immediate windfall could help SoftBank regain investors' confidence, which was dented due to the Japanese tech investor's recent spate of unsuccessful bets, including WeWork and Didi Global.
- Regaining investors' confidence could help it raise additional capital from them in the future.
- SoftBank's executives are reportedly targeting a valuation between $60B and $75B for the British chip design startup's IPO listing on Nasdaq, which could happen as early as September.
Zoom out: - SoftBank's VF1 reported a $1B gain in the latest quarter, turning a profit for the first time in six quarters.
- The gains on VF1 helped narrow the overall group's net quarterly losses to $3.3B (477.6B yen).
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| 4 | | VC firm Mendoza Ventures launched a non-profit initiative called Mendoza Impact. The initiative is aimed at supporting underrepresented founders, funders, and fellows. Jen Hartnett-Bullen is leading the non-profit as its executive director. More: - Mendoza Impact will upskill underrepresented MBA students and place them in VC firms in their network.
- The program for founders is developed to help them scale companies, increase their access to capital, and provide guidance from the micro-community.
- Seed and early-stage companies that successfully complete the program will receive a $100,000 to $250,000 investment.
- Lastly, the funders program aims to give emerging fund managers from diverse backgrounds the opportunity to invest in more diverse founders.
Zoom out: - Earlier this year, Mendoza Ventures announced a $100M third fund to invest in Series A and above startups led by underrepresented founders.
- Bank of America anchored the new fund.
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| 5 | | African early-stage startup accelerator and venture studio Founders Factory Africa secured $114M in capital commitments toward a new fund to back African startups. The fund is sector agnostic and intends to address the gender imbalances in the ecosystem. More: - The firm provides non-dilutive capital of up to $250,000 to pre-seed and seed startups.
- Founders Factory is willing to make additional investments of up to $300,000.
- The fund is backed by Mastercard Foundation, Johnson & Johnson Impact Ventures, Standard Bank, the Small Foundation, and Netcare.
- Founders Factory Africa has backed 55 startups across 11 nations, most notably asset financing startup Asaak, AI-powered medical imaging technology firm Envisionit Deep AI, and food tech startup Fresh Source.
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| 6 | | Today's Funding: AI - AI startup Anthropic secured $100M in funding from South Korean telco company SK Telecom. Earlier this May, Anthropic had raised a $450M Series C round led by Spark Capital.
Biotech - Dutch clinical-stage medtech firm Xeltis raised €12.5M ($13.6M) in additional Series D2 funding from the European Innovation Council (EIC) Fund, DaVita Venture Group, EQT Life Sciences, and others.
Blockchain - Decentralized stablecoin startup Helios Protocol nabbed $10M in fresh funding from Binance Labs.
Fintech - Future Super, an Australian ESG superannuation and investments startup, raised $15M in Series C funding at a $225M valuation, per Financial Review.
Solar - Chinese photovoltaic technology solutions startup Unisun Energy Group raised an undisclosed sum through a Series C round led by Cathay Capital, with participation from existing backer Source Code Capital.
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| 7 | | Quick Hits: - The AWS Cookbook — packed with practical insights and hands-on examples — is a must-have for your cloud toolkit.*
- Play Ventures secured $78M in capital commitments toward its third gaming venture fund, per SEC filings seen by Venture Beat.
- Coca-Cola and eight of its bottling partners committed $15M each to the Greycroft Coca-Cola Sustainability Fund. The fund has secured $137.7M so far and will be managed by VC firm Greycroft Partners.
- The Bitcoin Frontier Fund announced a new accelerator program that will give $100,000 seed investments to startups focused on the Ordinals protocol.
- Biotech startup Dracen Pharmaceuticals nabbed $2.3M in debt funding.
- This AI company, backed by top VCs, is eliminating a $1T problem in hospitality. Join the revolution and learn how to invest in Jurny today!*
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Term of the Day Metaverse commerce: Metaverse commerce involves individuals using AR or VR headsets to shop for a product within a platform. 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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