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| Hey Insiders, Today's newsletter covers: - 🚀 The surge in renewable energy investments
- 🔐 Cybersecurity M&A poised to increase by year-end
- 💰 Aurum Partners' $50M debut VC fund
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | The global renewable energy sector witnessed an influx of $358B in capital in the first half of the year, per a new report from BloombergNEF. China raked in half of the funding due to a number of factors, including economies of scale for modules, the growing rooftop photovoltaic (PV) market, and new energy megabase projects. Meanwhile, the U.S. secured the second-highest share of the investments, nabbing $25.5B of the total investments, of which $3.3B was venture capital and private equity funding. More: - Funding in U.S. solar sector surged by 75% compared to the first half of last year.
- This surge can be chiefly attributed to the implementation of the Inflation Reduction Act.
- Investments were largely focused on solar power, exceeding capital deployed into the wind and onshore projects.
- The majority of the investment in China was also around solar power.
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| 2 | | Only 34 VC-backed cybersecurity startups were acquired in the first seven months of this year, a third of the 123 M&A transactions completed in the same period in 2021. 
What the numbers say: The M&A transactions have more than halved over the 82 deals completed in the first seven months of last year. At the current pace, the transactions will likely be the lowest since 2017 by this year's end. What happened: The slump in M&A transactions is "not surprising," said Thomvest Ventures' Umesh Padval, considering the macroeconomic headwinds and geopolitical tensions. However, Padval expects transactions to pick up pace near the end of this year as "it takes about 15 to 18 months" for the excess money to "dry out of the system." With startups running low on cash reserves, founders will be more likely to accept lower valuations now. Relevance: Thales Group's acquisition of application security firm Imperva for $3.6B is the largest M&A transaction in the sector so far this year. The second largest deal was Hewlett Packard Enterprise's acquisition of cloud security startup Axis Security for $500M. Q: Do you think M&As in the cybersecurity sector will increase by this year's end? Let us know here. | | | |
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| 3 | | Aurum Partners, the family office VC firm of NFL team San Francisco 49ers' CEO Jed York, is looking to raise a $50M debut fund, per regulatory filings seen by Pitchbook. Fundraising is yet to commence. This will be the firm's first fund to get funding from external limited partners. More: - Aurum Partners has been operating since 2014 and has backed startups such as shoemaker Allbirds, fertility startup Carrot, and software maker Squire to date.
- The firm has remained industry-agnostic, writing individual checks between $250,000 and $500,000.
- 49ers chief investment officer Brano Perkovich is Aurum's co-managing partner alongside York.
- The firm has generated a 4.5x return on its investments since 2014.
- York's family fortune is estimated to be worth $5B by Forbes.
Zoom out: - Per a report by Silicon Valley Bank, family offices' investment in the venture capital asset class dropped by 55% between 2021 and 2022.
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| 4 | | Telus Ventures' partner Rohit Nuwal advises Indian startups to go public early as it helps founders maintain ownership and protect them from structured terms involved in funding rounds. Nuwal added that public markets offer more rational valuation figures than private markets. More: - He suggests that going public early is better than chasing higher valuations, as founders may have to accept structured term sheets in order to maintain their valuations in the private markets.
- Structured terms may impact future financings as they often come with guaranteed IPO returns, ratchets, dividends, M&A vetoes, and other investor-friendly terms for new investors.
Zoom out: - Industry experts expect the IPO market window to open for startups in the next 12 to 24 months, given the recent bull run in Indian public equity markets.
- This should offer hope to Indian startups, which have seen a 70% drop in VC funding in the first half of the year, per Tracxn.
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| 5 | | The assets under management of Indonesian VC firms increased by 14% YoY to $1.8B (27.35T rupiah) by the end of June 2023, per the Association of Indonesian Venture Capital and Startups (Amvesindo). AUM increased by 5.4% YTD. Amvesindo's chairman Eddi Danusaputro expressed the need to tweak the regulations to improve the VC funding for the region. More: - Danusaputro's recommendations include making a different set of regulations for VC firms compared to other financing companies, as they have different business models.
- He stressed the need to strengthen joint investment contract regulations and create an efficient licensing process.
- The AUM for Indonesian VC firms was 23.99T rupiah (~$1.56B) at the end of Jun. 2022 and 25.94T rupiah (~$1.6B) at the end of December 2022.
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| 6 | | Today's Funding: AI - Chinese AI research and development company DP Technology bagged $100M in fresh funding from United Media FOFs, MSA Capital, Loyal Valley Capital, Evergreen Scitech Delta, and other investors.
Biotech - Genesis Therapeutics, a startup leveraging AI to create breakthrough medicines, closed its Series B funding round at $200M. Andreessen Horowitz's Bio + Health division led the funding round along with additional participation from Fidelity Management & Research, BlackRock, NVentures, T. Rowe Price Associates, Rock Springs Capital, Radical Ventures, and Menlo Ventures.
- Longevity and preventative healthcare company Viome Life Sciences raised $86.5M in fresh funding. The Series C funding was provided by Khosla Ventures, Bold Capital, WRG Ventures, and others.
- Healthcare robotics startup Mendaera nabbed $24M in Series A funding led by Lux Capital.
Foodtech - World Fund and CPT Capital co-led a $43.5M (€40M) funding round into plant-based protein products maker ENOUGH.
Marketplace - B2B marketplace startup Ghost raised $30M in Series B funding led by Cathay Innovation, with participation from Union Square Ventures, Equal Ventures, and Eniac Ventures.
SpaceTech - Space tech startup Axiom Space secured $350M in Series C funding led by Aljazira Capital and Boryung Co.
Semiconductor - Chinese advanced integrated circuit (IC) packaging and testing ECHINT raised $136.9M (1B yuan) in Series B funding co-led by Matrix Partners China and Brilliant Fund.
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| 7 | | Quick Hits: - Toptal's world-class talent lets you future-proof your business with their experts in blockchain, AI, and software development.*
- Ocado-backed robotic chef startup Karakuri was sold for £350,000 (~$445,700). The startup had raised £13M ($16.5M) from investors.
- Indian early-stage VC firm Veda VC held the first close of its fund at $18M, against a target of $30M. The firm intends to invest between $250,000 and $1.25M in consumer internet, SaaS, fintech, and deeptech startups.
- The South Korean Ministry of SMEs and Startups selected seven fund management companies, including DCM, Greyhound Capital, and Headline Asia, to manage a new $970M fund to support the overseas expansion of startups.
- Futureverse earmarked $50M to its venture fund and studio Born Ready.
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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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