| |
| Hey Insiders, Today's newsletter covers: - Dip in revenue multiples of VC-backed startups
- 67% YoY dip in Israeli startup VC funding
- D1 Capital's 3.8% gains this year
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | Newly listed VC-backed companies are fetching a valuation of 8x revenue multiple, per Pitchbook. The revenue multiple has fallen to a third of the peak value of 24x in 2021. Companies gearing up for their IPOs in the coming weeks are targeting a modest valuation, considering the prevailing market conditions. More: - Instacart is targeting a valuation of $9.3B at its upcoming IPO listing, 76% less than its peak market value of $39B from 2021.
- Instacart's valuation has dropped despite its estimates of fetching $3B in annualized revenue in 2023.
- Interestingly, a comparison with DoorDash's current price-to-sales multiple of 4x suggests that Instacart could have aimed for a valuation as high as $12B.
- Per Pitchbook analyst Kyle Stanford, the company may have lowered its valuation on purpose, as "an aggressive pricing range would have created additional risk in the event of a below-range pricing, adding poor sentiment on the company as it moves into the public market."
Q: In the current market, is going for a conservative valuation figure the optimal strategy for companies eyeing IPO listings? Join the conversation here. |     | |
| 2 | | Israeli startups secured less than $900M in VC funding in Q2 this year, representing a 67% YoY drop over Q2 2022's tally of $2.7B, per Crunchbase. 
What the numbers say: So far in the ongoing quarter, Israeli startups have raised only $800M, suggesting that the VC slump may continue in Q3. In H1 2023, only four startups could raise mega funding rounds of over $100M. This year's largest funding rounds are eToro's $250M fundraiser in March and AI21 Labs' $155M Series C round. What happened: The drop can be attributed to a significant 87% decline in VC funding for the cybersecurity sector in Israel. Israeli cybersecurity startups nabbed $69M in funding in Q2, down 87% from $514M raised by startups in the same period last year. VC funding dip is further intensified in the region due to the political upheaval, prompting investors to curb their deployment. | | | |
| A message from our sponsor, Sidebar . |  | | Ready to take your career to the next level? Make your transition successful by leveraging a Personal Board of Directors. A trusted peer group, with battle-tested perspective, and proven playbooks, to have real, tactical discussions with to propel you forward. With Sidebar, senior leaders are matched with a small group of highly vetted, private, and supportive peers to lean on for unbiased opinions, diverse perspectives, and raw feedback. - “Providing and receiving support from others who play a similar role to you is one of the best ways to grow your capabilities and succeed.” - Vice President, Roku
- “You’re the average of the people you keep closest; Sidebar helps you raise that bar.” - Global Director, Reddit
- “Tap into a new level of coaching support, professional development, and peer-driven accountability.” - Senior Director, Credit Karma
Why spend a decade finding your people – join the growing waitlist of over 5,000 top senior leaders, and apply to become a founding member today. Join the Waitlist | |
|
| 3 | | Dan Sundheim's crossover fund D1 Capital Partners has posted 3.8% gains so far this year, sources informed Bloomberg. The grim returns are primarily due to the markdowns on venture capital and private equity bets. The overall returns have eaten into D1's stock book gains of 14%. More: - D1's investors can choose their exposure to VC and PE bets, typically ranging from 35% to 50%.
- The firm has invested nearly 60% of its ~$20B of assets in VC and PE, with its portfolio consisting of 167 startups.
- Notable startups backed by D1 include Lineage Logistics, Space Exploration Technologies, and Collectors Universe.
- The markdowns are primarily in the tech and real estate sectors, both of which have been severely impacted due to the rising interest rates.
Zoom out: - Crossover funds endured substantial losses in 2022, ranging from 18% to as much as 56%.
- Many have fared much better this year, with Tiger Global, Coatue, Lone Pine Capital, and Viking Global posting gains of 20%, 16%, 12%, and 11%, respectively.
- Only Third Point has lost 1.6%.
| | | |
| 4 | | Global climate-focused investment firm Galvanize Climate Solutions secured over $1B in capital commitments from institutional investors at the final close of its Innovation + Expansion Fund. The firm intends to invest in early- to growth-stage startups working on decarbonization. More: - The fund has already backed 11 startups with the new fund, including Alcemy, Arable, Lydian, Plotlogic, Pulsora, Regrow, The Routing Company, VEIR, Watershed, Worldly, and Zhero.
- Galvanize will back a wide range of sectors, including carbon management software, battery recycling, and low-carbon concrete.
- Per the fund's co-head, Saloni Multani, individual check sizes will range from $10M to $100M.
Zoom out: - In Q2 2023, funding for the climate tech sector fell to its lowest level since Q1 2021, ending the quarter with $10.2B, per BloombergNEF analysis.
| | | |
| A message from our sponsor, Amplitude. |  | | Amplitude customers saw 217% ROI & more What's the ROI of understanding how customers use your products? See how Amplitude users achieved a 217% ROI in 3 years and recouped Amplitude costs in under 6 months. Conductued by Forrester Consulting in an August 2023 commissioned study, Amplitude's Total Economic Impact™ shows how customer journey insights drive data-driven decisions on engagement, conversion, and purchases. Testimonial: “Without Amplitude, we probably would have to spend another 20% to 25% on our analysis tooling budget.” - Chief product officer, entertainment company See why leading brands like Atlassian, Hubspot, Notion, PayPal, Capital One and Dropbox trust in Amplitude's digital analytics platform. Get your copy now 
| |
|
| 5 | | Early-stage VC firm Cervin Ventures secured $162M in fresh capital toward its new fund. The firm intends to back startups across enterprise software, data, AI, cybersecurity, DevOps, cloud, and networking domains. The firm will typically make seed and Series A investments. More: - The firm expanded its portfolio with the addition of 10 new companies, including Bolster, Causely, FireCompass, Lightlytics, OwnID, Ratio, and Vendelux.
- Cervin's entire portfolio consists of 50 startups across the U.S., Israel, and India.
- The firm counts Punchh, Replay, EdCast, and Tynker as its most successful exits.
- Cervin roped in former Hum Capital and Sapphire Ventures executive Scott Brown to lead a portfolio services team that will help accelerate growth in startups.
- The new fund brings the firm's assets under management to over $335M.
| | | |
| 6 | | Today's Funding: Battery tech - French low-carbon battery manufacturer Verkor secured €2B ($2.1B) in Series C funding to launch its gigafactory. The funding includes a €500M ($534M) loan from EIB and €650M ($694M) in subsidies given by the French government.
Biotech - Clinical-stage biotherapeutics firm Generate Biomedicines raised $273M in Series C funding from Amgen, NVentures, MAPS Capital, and Pictet Alternative Advisors.
- Orthopedic ultrasound-guided treatment firm Sonex Health closed its KCK MedTech-led Series B funding round at $40M.
Data - Data analytics and AI software developer Databricks secured over $500M in Series I funding at a valuation of $43B. T. Rowe Price, Morgan Stanley, Fidelity, and Franklin Templeton participated in the round.
Software - EquipmentShare, an equipment and digital solutions firm catering to the construction industry, bagged $150M in Series E funding.
| | | |
| 7 | | Quick Hits: - Before launching your next influencer campaign, compare the latest cost metrics to your budget. Get the benchmarks in this blog.*
- British chip design firm Arm has priced its upcoming IPO at $51 per share, giving it an implied valuation of $54.5B. The firm expects to raise nearly $5B from the transaction.
- Autonomous drone technology developer Shield AI is looking to raise $150M from investors at a $2.5B valuation.
- Coral reef conservationist Tom Quigley launched a new VC firm called Superorganism to back early-stage startups developing solutions to solve the biodiversity crisis. New York-based angel investor and conservationist Kevin Webb is the co-founder of the firm.
- Thailand's Kasikornbank launched a $100M fund to back AI, Web3, and fintech startups.
- Hyperstack: Scale AI projects with NVIDIA GPUs. Enjoy per-minute billing. Secure your H100s & A100s today!*
*This is sponsored content. | | | |
| Upcoming Events | | SEP
21 | | Join us for pitches, drinks and networking at HanaHaus in Palo Alto on September 21 at 6pm.* | | | | | | | OCT
16 | | Meet Our Fund 5, Building and Investing in AI | | | | | | * This is a sponsored event | | | |
Term of the Day Keyword stuffing: Keyword stuffing involves the inclusion of keywords into a website’s content unnaturally or repetitively to manipulate search engine algorithms. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE VENTURE CAPITAL LEADERBOARD (7 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
| |
 | Sidebar – Catalyze your career with a Personal Board of Directors. | |
|
 | Amplitude customers saw 217% ROI in The Total Economic Impact™ of Amplitude. | |
|
| |
Comments
Post a Comment