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| Hey Insiders, Today we are taking a look at the 26% drop in value for Union Square's funds, why sub $100M IPOs are outperforming larger listings in India, and A16z Games' $75M commitment to Speedrun accelerator. I hope you enjoy today's edition! Karan
p/karan-chafekar | |
| 1 | | The value of UTIMCO's investments in Union Square Ventures' funds experienced a 26% drop, declining from $201M at the end of February to $149M at the end of May. The markdowns impacted seven of Union Square's funds, with the 2012 vintage fund recording a 34% drop in value. More: - While the markdowns might raise concerns, they do not reflect the fund's overall performance.
- The 2012 fund has already yielded a $592M return on a $25M initial investment, giving it an IRR of 53%.
- UTIMCO has invested nearly $129M across Union Square's seven funds, which have already netted $1.2B in returns, representing a 59% cumulative IRR.
- UTIMCO manages $65B endowments of the University of Texas and Texas A&M systems.
Zoom out: - UTIMCO's holdings in GGV Capital were worth $296M at the end of May, dropping slightly from the earlier reported value of $305M.
- Y Combinator's two funds from 2021 and 2022 retained the same value as before, while the value of UTIMCO's holdings in Sequoia Capital's funds increased slightly from $199M to $206M.
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What the numbers say: 92 Indian companies offering less than $100M in stock sales held their IPO listings so far this year, per data compiled by Bloomberg. Surprisingly, the sub $100M IPOs are outperforming their larger counterparts, even amid rising interest rates. The SME IPO index surged 26% this year, outperforming the Nifty 50's 9% gain. What happened: Investors are undeterred by the poor trading liquidity and less stringent disclosure rules associated with sub $100M listings. Some of the sub $100M IPOs were oversubscribed by more than 100 times the shares on offer. The IPO offerings of drone maker IdeaForge Technology and Utkarsh Small Finance Bank were oversubscribed by 106 and 102 times, respectively. Relevance: Investors have turned to smaller IPOs after the lackluster performance of some of the large IPOs that were initially expected to perform well. The stock prices of Life Insurance Corporation of India and Delhivery have tumbled 33% and 18%, respectively, over their listing prices from 2022. Investors are drawn to sub $100M IPOs due to the untapped potential and the expectations of massive gains they offer. | | | |
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| 3 | | Andreessen Horowitz's gaming investment division, A16z Games, announced the second cohort of its Speedrun accelerator. A16z Gaming committed $75M to back pre-seed startups in the gaming and technology sectors. More: - 32 startups participated in Speedrun's first cohort in March, 80% of which have already secured follow-on funding after the demo day in June.
- The first program was four weeks long. However, the new program will run for 10 weeks, starting in January and ending at the Game Developers Conference (GDC) in March.
- Each startup participating in the accelerator will receive an initial $500,000 investment.
- Founders and executives from top gaming companies, including Zynga, Sega, Bungie, Nintendo, Epic Games, and Telltale Games, as well as entrepreneurs from YC, Human Interest, Glu, Knock Knock, and JCSoft, will mentor the startups participating in the program.
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| 4 | | Aviation startup Volato plans to go public via a SPAC merger with Proof Acquisition Corp I, a blank check firm formed by PROOF.vc. The transaction will give Volato a valuation of $261M. The deal is expected to be completed by the end of 2023, and Volato will list on the NYSE bearing the ticker name SOAR. More: - Current shareholders of Volato will receive a 63.5% stake in the new entity.
- Volato held the initial close of its Series A preferred equity funding round at $10M with backing from PROOF.vc in Jul. 2023.
- Additionally, the firm converted $38M worth of previously raised outstanding convertible notes into Series A preferred equity.
- Volato provides fractional jet ownership of its fleet, which consists of HondaJet and Gulfstream G280.
- The firm reported nearly $100M in revenue in the 2022 fiscal year.
Zoom out: - PROOF.vc raised $276M from sponsors at the IPO listing in 2021.
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| 5 | | Tuesday Capital secured $31M in capital commitments from investors towards its fifth seed-stage fund. The firm intends to write checks between $250,000 and $500,000. More: - The 12-year-old firm was initially known as CrunchFund.
- Co-founder Patrick Gallagher found the fundraising climate to be much more challenging now than two years ago, when the firm closed a similar-sized fund of $30M.
- The firm has previously backed Uber, Digital Ocean, Gitlab, Opendoor, and Airbnb.
- The most notable startups currently in its portfolio include Zipline, Solugen, and Human Interest, last valued at $4.2B, $2B, and $1B, respectively.
Zoom out: - Tuesday Capital relocated from San Francisco, Calif. to Austin, Texas, during the pandemic, joining the likes of other VCs who have made the transition, namely Founders Fund, Mithril Capital, 8VC, and Breyer Capital.
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| 6 | | Today's Funding: Biotech - Irvine, Calif.-based biotech startup CG Oncology closed its crossover financing round at $105M. Foresite Capital and TCGX co-led the funding.
Cybersecurity - Threat intelligence startup Cyble received a $24M Series B capital injection co-led by Blackbird Ventures and King River Capital.
Edtech - Enterprise learning management system startup Intellum bagged a $25M minority growth investment from Guidepost Growth Equity.
Fintech - Micro Connect Investments Ltd., an SME investment platform co-founded by former Hong Kong stock exchange boss Charles Li, nabbed $458M in Series C funding at a $1.7B valuation.
Industrial - Hybar, which plans to build an environmentally-friendly steel recycling facility in Arkansas, raised $700M in equity and debt funding. TPG Rise Climate and Global Principal Partners led the equity tranche.
Manufacturing - Chemify, a molecular discovery and chemical manufacturing technology platform, raised $43M in Series A funding led by Triatomic Capital.
Telecommunications - Airalo, an eSIM marketplace startup, closed its e& Capital-led Series B round at $60M. Antler Elevate, T.Capital, Rakuten Capital, Peak XV Partners, and others backed the funding round.
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- Specialty materials and life sciences-focused investment firm SK Capital Partners closed its SKCP Catalyst Fund II at $800M.
- VC firm Fifty Years launched the Manifest Grant program that aims to give $25,000 to $100,000 to academic researchers to help them build products to tackle climate change.
- Primary VC hired Emily Man as its first fintech-focused partner. Man was formerly the vice president at Redpoint Ventures.
- Farouk Khailann joined Erez Capital as its venture partner. Khailann is the CEO of Premium Africa Holdings and the managing partner of Akon Lighting.
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