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| Hey Insiders, Today we are taking a look at the $3.2B VC funding deployed into Middle Eastern startups, SoftBank Group's recent earnings report, and VC funding for edtech startups. If you find this newsletter helpful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
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VCs invested $3.2B into Middle Eastern startups in the first half of this year, per Pitchbook. At the current pace, funding is unlikely to match last year's tally of $14.5B. Due to the recent downturn, funding will likely drop to pre-pandemic levels. More: - Q2 2023 had the lowest quarterly deal volume since Q3 2018.
- 580 VC deals have been completed so far this year.
- The dip is surprising given the region's rapid urbanization and growth of sovereign wealth funds.
- Israel continues to rake in the region's majority share of VC funding, accounting for 65.6% of the overall capital deployed.
- Bahrain and Qatar have seen an uptick in VC activity, already crossing 2022's full-year deal count.
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What the numbers say: Japanese technology investor SoftBank reported $1B in investment gains on its flagship Vision Funds during the April-June quarter of 2023. Vision Fund turned a profit for the first time in six quarters. The gains helped narrow SoftBank Group's quarterly net loss to $3.3B (477.6B yen). The firm had posted a $32B loss on its Vision Fund in the fiscal year ending March 31, 2023. Why it matters: The company deployed $1.8B in capital in the recent quarter, more than three times the average $500M invested over the past three quarters. The firm has invested $166.2B from its Vision Fund 1, Vision Fund 2, and LatAm fund to date. The fair value of its portfolio is $140.3B. Per Vision Fund's CEO Navneet Govil, the firm has $8B available from Vision Fund 2 to make new investments. Where to see the impact: SoftBank is shifting to "offense mode" to capitalize on the AI sector boom. SoftBank's portfolio chip startup Arm is also gearing up for an IPO listing later this year, eyeing a valuation between $60B to $75B. | | | |
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| 3 | | Global edtech startups raked in $1.8B in VC funding so far this year, per a report published by HolonIQ. The data firm predicts that VC funding for the sector by this year's end will reach $3.5B, making 2023's annual total the lowest since 2016. According to investors, the decline in VC financing for the edtech industry is unlikely to reverse anytime soon. More: - One of the primary reasons for the decline is the retrenchment of generalist investors in the sector.
- Generalist investors are turning away from standalone edtech, instead concentrating on enterprise-focused edtech offerings and workplace gamification startups, per MBA Fund's investment partner Iynna Halilou.
- Investors are still optimistic about funding for edtech startups utilizing AI in unique ways.
- Indian edtech unicorn Byju's nabbed a $250M funding round recently, making it the sole edtech to raise a mega round of over $100M since 2022.
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| 4 | | Valor Capital Group hired former SoftBank Group executive Paulo Passoni as its managing partner. Passoni is tasked with leading Valor's growth equity business. In addition, he will support existing portfolio companies with their business expansion initiatives. More: - Passoni oversaw SoftBank's $8B Latin American funds as a managing investment partner.
- Before SoftBank, Passoni was a managing director at Third Point Management.
- His career includes stints at Eton Park Capital Management and Morgan Stanley.
- According to an earlier report, Passoni was set to join former SoftBank executives Marcelo Claure and Shu Nyatta's new VC firm Bicycle Capital, which recently raised a $440M debut fund.
- Valor also promoted Carlos Costa to the partner role, where he will be responsible for venture and fintech investments.
Zoom out: - Valor primarily backs technology startups across the U.S. and Latin America.
- Notable portfolio companies include Bitso, Coinbase Global, Loft, Sami, and StoneCo.
- It has $1.5B in assets under management.
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| 5 | | Indian e-commerce startup Xpressbees is seeking a $100M investment from Canadian pension investor Ontario Teachers' Pension Plan Board. Per sources, the transaction would value Xpressbees at $1.4B. Xpressbees intends to use the proceeds to fuel business expansion and back strategic acquisitions. More: - The Indian startup offers international third-party logistics and shipment services to B2B and B2C clients.
- Earlier this April, the firm raised $40M in funding from the Malaysian sovereign wealth fund Khazanah Nasional Bhd.
- Xpressbees has raised $642.M in total funding since its founding in 2015, per Crunchbase.
- Notable backers include Blackstone Group, TPG Growth, Norwest Venture Partners, and Alibaba Group.
Zoom out: - Ontario Teachers has invested more than $3B in India to date, including a $225M bet on National Highways Infra Trust.
- The firm has strategically selected the nation to reach its $300B investment target by 2030.
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| 6 | | Today's Funding: Biotech - Elon Musk's brain-computing interface startup Neuralink Corp. secured $280M Series D funding led by Peter Thiel's VC firm Founders Fund, the startup announced in a social media post.
Data - Customer data platform startup Simon Data raised a $54M Series D funding round. Macquarie Capital led the funding, joined by Polaris, .406, and F-Prime.
Energy - Industrial electrolyzer technology developer Verdagy closed its Series B funding round co-led by Temasek and Shell Ventures at $73M.
Enterprise - Industrial IoT and enterprise asset management software maker Traction bagged $45M in Series B capital led by General Catalyst.
- Enterprise autonomous security solutions startup Horizon3.ai raised $40M in Series C funding bringing its total funding raised to date to $78.5M. Craft Ventures led the round with participation from Signal Fire.
Food and beverage - Dutch lab-grown meat startup Meatable raised $35M in funding led by Agronomics. Invest-NL, BlueYard, DSM Venturing, Bridford, and others participated in the funding round.
Transportation - Luxury travel airline Beond raised a $17M seed round from undisclosed investors.
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| 7 | | Quick Hits: - Wiz partnered with Wiley to create the AWS Security Foundations Guide For Dummies. This free 46-page guide includes techniques for securing AWS resources.*
- Style Capital sold a majority stake in Australian fashion startup Zimmermann to Advent International. The transaction values the startup at $1B. Style Capital has retained a minority stake in the startup.
- VCs invested $2.1B in African startups in the first half of this year, down 40% compared to last year's tally of $3.5B across the same period.
- Svatantra Microfin acquired Navi Group's microfinancing division Chaitanya India for $178.5M.
- Israeli VC firm Symbol secured $50M in capital commitments towards its debut fund.
- Japanese mobile entertainment company Mixi launched its corporate venture capital division and committed $50M in funding to back communication and entertainment startups in emerging countries.
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Term of the Day Product-led growth (PLG): Product-led growth (PLG) is a marketing and sales strategy that focuses on using the product itself as the primary driver of growth. Question of the Week Do you think the 9-to-5 workday still relevant in today's modern workplace? 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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