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| Hey Insiders, Today's newsletter covers: - Instacart's amended IPO valuation range
- Crossover investors eyeing pre-IPO secondaries
- Prosus CEO's resignation
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | Grocery delivery startup Instacart amended its SEC filing on Friday, increasing the target price range of its shares for its upcoming IPO debut to $28 to $30. The firm's shares were earlier priced at $26 to $28 per piece. More: - The new share prices give Instarcart a fully diluted valuation of nearly $10B, up from its previous valuation target of $7.7B.
- Despite increasing the valuation, the firm's expected valuation at the IPO listing is still significantly lower than its peak figure of $39B.
- Instacart has raised $2B in venture funding to date.
Zoom out: - Instacart's price revision comes after Arm's successful IPO debut last week.
- Arm raised $5B from its debut at a valuation of $54.5B.
- Arm's share prices surged by 25% on the first trading day.
Q: Do you think Instacart has accurately priced its shares for the upcoming IPO debut, or could it have sought a higher valuation? Join the conversation here. |     | |
| 2 | | Crossover funds, such as hedge and growth funds, are slowly returning to VC investments through secondaries, per Pitchbook. 
What the numbers say: Crossover funds have drastically reduced their VC dealmaking since the downturn started in 2022. So far this year, crossover funds have participated in less than 700 VC deals, a significant decline from over 2,500 deals in 2021. Relevance: Crossover investor T. Rowe Price led a $500M funding round into data analytics and AI firm Databricks at a $43B valuation last week, its first VC deal since Q1. Databricks raised the round despite doubling its cash burn, as it expects to grow at 50% over the next three years. Why it matters: An increase in crossover fund's participation in VC deals can likely point towards better IPO prospects. Buying stakes through secondary transactions means that crossover investors can scoop up stakes in promising startups that they might have missed out on earlier. Data from secondary marketplaces Caplight and Zanbato shows that Databrick's shares have been trading at $61 to $67 per share, which represents a more than 6% discount over its previous share value of $73 from its 2021 Series H round, which valued the firm at $38B. | | | |
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| 3 | | Bob van Dijk resigned from the CEO roles at consumer internet group Naspers and its Dutch e-commerce investment subsidiary Prosus with immediate effect. The firms promoted Group Chief Investment Officer Ervin Tu to the interim CEO role as they search for a permanent replacement. Per insiders, Tu — a former manager at SoftBank's Vision Fund — will likely retain the role permanently. The reason behind van Dijk's departure is undisclosed, but Prosus asserted that the decision was reached after a "mutual agreement." More: - Van Dijk spent nearly a decade at the helm and oversaw Prosus's 2019 public listing.
- The firm's stock fared well during the downturn but faced challenges in 2022, forcing it to divest its stake in many businesses.
- Last month, the firm sold PayU's global business operations to Raypd for $610M.
- Prosus owns a 26% stake in Chinese tech giant Tencent, which is worth $100B.
- Other notable firms in its portfolio include StackOverflow, Delivery Hero, Trip.com, Udemy, PayU, Byju's, Swiggy, and Meesho.
- The firm is now gearing up several portfolio startups for an IPO listing.
- Naspers owns 43% of Prosus and has a 72% voting interest.
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| 4 | | SoftBank is reportedly looking to invest "tens of billions in AI," including a potential investment in OpenAI, sources informed the Financial Times. The news comes a week after SoftBank-owned British chip design firm Arm successfully raised $5B through its IPO listing at a valuation of $54.5B More: - With Arm's IPO, SoftBank now has $65B on its balance sheet to pursue new investment opportunities.
- SoftBank is also looking to ink a business partnership with OpenAI.
- The firm is also keen on investing in other AI startups and reportedly made a preliminary approach to buy British chipmaker Graphcore.
- Graphcore denied it had received any offer from SoftBank.
Zoom out: - SoftBank informed investors that it will resume its investment activities and switch back to "offense mode" after facing heavy losses over the previous six quarters.
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| 5 | | Unfold Ventures launched with a $300M fund on Monday, backed by Fidelity Investments' parent company, FMR LLC. The new VC fund intends to back spices, vegan vitamins, and skincare startups. More: - The firm has already backed four startups to date: skincare brand Live Tinted, spice and seasonings startup Kinder's, vegan vitamin startup MaryRuth Organics, and immune-support product maker Beekeeper's Naturals.
- Scott Norton, Shamez Kanji, and Suzanne Agnello are the three partners of Unfold.
- Norton co-founded a condiment startup that Unilever acquired for $140M in 2017.
- Norton said, "It's exactly in moments like now — when there's a pullback — where there are compelling, timeless companies to find."
Zoom out: - FMR's owners include Fidelity CEO Abigail Johnson, who has a net worth of $34.8B.
- FMR has also backed other venture funds, including F-PrimeCapital's funds.
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| 6 | | Today's Funding: AI - ICONIQ Growth led a $100M Series B funding round into Writer, a full-stack generative AI platform for enterprises. WndrCo, Balderton Capital, Insight Partners, and Aspect Ventures participated in the funding round.
Agriculture technology - Sustainable agriculture solutions firm Indigo Ag raised $250M in fresh funding. Flagship Pioneering led the funding round with additional backing from the State of Michigan Retirement System and Lingotto Investment Management.
Biotech - Generic respiratory medication manufacturer Nephron Pharmaceuticals bagged $350M in fresh funding led by BlackRock Capital Investment Advisors, PNC Bank, and National Association.
- Canton Biologics closed its Series C funding round at 300M yuan (~$41M). Guangdong Technology Financial Group, Taipu Life Science Investment, and Chnin Financial participated in the SDIC Venture Capital-led funding round.
Cybersecurity - Industrial cybersecurity startup Dragos extended its Series D funding round with an additional $74M. The firm maintained its $1.7B post-money valuation from earlier. WestCap led the funding round.
Enterprise - Project and issue tracking system developer Linear bagged $35M in Series B funding led by Accel, with participation from Sequoia Capital, 01Advisors, and others.
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- Global Frontier Technology Ventures secured $140M in capital commitments from investors towards its Fund I, which aims to invest in startups working on AI and other frontier technologies.
- Anthony Scaramucci's SkyBridge Capital and Atlas Merchant Capital are reportedly the lead bidders for Silicon Valley Bank's VC division SVB Capital. Sources informed Bloomberg that SVB Capital could be sold off for $250M to $500M.
- Chinese fintech company Ant Group Co. is planning to divest its stake in A&T Capital's crypto-focused $100M fund.
- Orios Venture Partners' managing partners, Anup Jain and Rajeev Suri, are leaving the VC firm.
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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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