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| Here's a look at today's VC briefing. - KPMG's Conor Moore expects IPO window to open up next year
- Black founders were able to secure only 0.13% of VC funding in Q3
- 77% of startups in Peak XV's latest Surge accelerator cohort were AI, deep tech startups
Thank you. Karan
p/karan-chafekar | |
| 1 | | The rebound in IPO market listings will likely stagnate as investors reassess their risk appetite for new listings due to the war in the Middle East, surging interest rates, consecutive losses posted by the S&P 500, and volatile market conditions. KPMG's head of Private Enterprise practice, Conor Moore, said, "From talking to clients and others in the ecosystem, there could be a window that opens up in mid-to-late-March and onwards." More: - The U.S. government is potentially looking at shutting down new IPO listings starting mid-November, which could further complicate matters.
- Between 2018 and 2019, the U.S. government stopped approving new listings for 35 days, making it the longest shutdown period in modern U.S. history.
- A few companies, such as Waystar Holding Corp., Hamilton Insurance Group Ltd., and Mach Natural Resources LP, are forging ahead with their IPO listings despite the current volatile market conditions.
- Meanwhile, others are considering raising private fundraising rounds or opting for convertible debt options.
Zoom out: - U.S. companies have raised just $47.6B in funding from initial public offerings so far this year.
- The amount raised so far is less than the sum raised by U.S. companies in the last two months of 2021, per Bloomberg.
Q: Do you think the IPO window for new companies will close this year due to worsening global economic conditions? Join the conversation here. |     | |
| 2 | | Black founders raised $39.7M in VC funding in Q3 2023, representing just 0.13% of the overall capital deployed. 
What the numbers say: Funding allocated for Black founders dropped 81.3% compared to the previous quarter. In Q2, Black founders raked in $212M out of the overall $29B capital deployed. In the first quarter of this year, VCs invested $352M into Black-led startups out of the $45B deployed overall. What happened: Black founders had previously raked in 1.2% of the total funding in Q3 2022, ending the quarter with nearly $1B out of the $81.7B invested in all startups. While capital allocation has declined for all founders due to the VC funding dip, the situation is far worse for Black founders, who are now receiving a smaller percentage allocation than before. Per TechCrunch, several firms have failed to deliver on their diversity, equity, and inclusion promises made after 2020. Where to see the impact: While California's new diversity disclosure law passed earlier this month aims to rectify the diversity deficit in the VC industry, "it'll be quite some time before it's implemented and even longer before we get any answers," per Crunchbase senior data editor Gené Teare. | | | |
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| 3 | | AI and deep tech startups made up a majority of Peak XV's latest accelerator cohort. 10 of the 13 startups in the new accelerator cohort were AI or deep tech startups, accounting for 77% of the total cohort size. More: - Less than 10 startups in the new cohort were based in India, underscoring Peak XV's ambition to cater to global startups after its recent split with Sequoia Capital.
- Startups participating in the latest cohort of Peak XV's Surge accelerator program include open source data infrastructure firm Dozer, vacation home management platform Elivaas, precision engineering components maker Ethereal Machines, quantum computing startup Horizon Quantum Computing, semiconductor startups InCore and Mindgrove Technologies, and employee engagement platform Mercu.
- Peak XV provides nearly $3M investment to each startup in its cohort as seed capital.
Zoom out: - Surge has emerged as one of the most influential early-stage accelerator programs in India and Southeast Asia, having backed over 140 startups since its founding five years ago.
- Startups emerging from the Surge accelerator have collectively raised $2B in follow-on funding.
- Peak XV manages nearly $9B in capital across its 13 funds.
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| 4 | | Unicorn trucking startup Convoy is shutting down after failing to find a buyer. The firm was reportedly searching for an acquirer for four months. The firm let go of the remaining employees last Thursday. More: - CEO and founder Dan Lewis blamed the "massive freight recession and a contraction in the capital markets" as the primary reasons for failing to find a buyer.
- Convoy had already slashed its employee count by a third from its peak of 1,500 to about 500 people.
- Convoy had raised over $800M in equity funding to date and was valued at $3.8B last year, making it one of the highest-valued startups in the logistics sector behind Flexport.
- Allen & Co., Jeff Bezos, Reid Hoffman, and Marc Benioff invested in the startup in 2015 when it was valued at less than $60M.
- Bill Gates backed the startup in a later round.
- Convoy was also backed by Alphabet's VC division Capital G and Al Gore's Generation Investment Management.
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| 5 | | Asset management firm P10 roped in Goldman Sachs veteran Luke Sarsfield as its CEO, per the Wall Street Journal. With Sarsfield at the helm, the firm will expand further into new geographies and increase its investment offerings. More: - Co-founders and current co-CEOs Robert Alpert and Clark Webb will remain on the company's board of directors.
- Sarsfield left Goldman Sachs earlier this year after the company reorganized and merged the asset management division with its wealth management division.
- Since leaving Goldman Sachs, Sarsfield took up the role of partner and co-CIO of Sixth Street Capital.
Zoom out: - P10 manages $22B in assets for investors.
- The firm facilitates VC, PE, and other alternative investments for investors, including wealthy families.
- P10's four divisions include RCP Advisors, Bonaccord Capital Partners, and TrueBridge Capital Partners.
- The firm, which went public in 2021, has a market capitalization of $1.1B.
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| 6 | | Today's Funding: AI - Whatsapp-based AI chatbot maker Luzia secured $10M in Series A funding led by Khosla Ventures. A* Capital, Abstract Ventures, FJ Labs, Globo Venture, and others supported the funding round.
Fintech - Digital personal finance platform Creditly Corp., otherwise known as Credit Genie, bagged $10M in fresh capital. Khosla Ventures led the current funding round with participation from Tippet Ventures.
Gaming - Indie game development studio Noodle Cat Games bagged $12M in fresh funding led by Hiro Capital. Makers Fund, Krafton, and Sony Innovation Fund participated in the funding round.
- Swiss digital avatar generation software maker Copresence raised $6M in seed funding. Names of the backers were not disclosed.
Transportation - Online automotive parts retailer FCP Euro raised $25M in Series A funding led by an undisclosed investor. The firm will use the proceeds to expand across new regions.
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- Springcoast Capital Partners secured more than $500M in capital commitments towards its two investment vehicles, sources informed WSJ. The firm is looking to make equity investments ranging from $25M to $75M in companies with more than $30M in annual recurring revenue.
- PE firm KKR acquired a minority stake in VC and medical-investment funds manager Catalio Capital Management in a bid to increase its investments in the life sciences sector. Financial terms of the transaction were not disclosed.
- Funding and grants for climate tech startups slumped by 40% in the last 12 months, per a new PwC report seen by Business Recorder.
- Global payments and finance platform Airwallex is set to acquire Mexican payment service startup MexPago for an undisclosed sum.
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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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