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| Here's a look at today's VC briefing. - 20 large U.K.-based VC funds pledge to invest in high-growth companies
- Sequoia marks up 15 of its funds, defying industry slump
- Supply chain tech funding dropped 70% YoY
Thank you. Karan
p/karan-chafekar | |
| 1 | | 20 of the U.K.'s largest VC funds, including SV Health Investors and Northern Gritstone, have signed an agreement to invest in high-growth companies across the nation in a bid to drive up private investment. The pledge – known as the "venture capital investment compact" -- was spearheaded by the British Private Equity and Venture Capital Association (BVCA). More: - With the new initiative, the BVCA hopes it can convince pension funds to become limited partners in VC funds.
- Earlier this July, U.K.'s largest pension fund managers, including Aviva, Scottish Widows, and Legal & General, had pledged to invest 5% of assets from default pension funds to private ventures.
- Chancellor Jeremy Hunt said, "This compact is a huge win – demonstrating that our world-renowned venture capital firms stand ready to help our pension providers allocate funding to our high-growth companies."
Q: Can government-backed programs help rejuvenate VC funding for high-growth startups during the current funding slump? Join the conversation here. |     | |
| 2 | | Sequoia has reportedly increased the valuation of 15 of its funds by an average of 9.2% in the 12-month period ending June 30, according to financial statements of limited partner University of California Regents studied by Pitchbook. 
What the numbers say: In the same duration, Sequoia also marked down the value of four of its funds by an average of 6.9%. Sequoia marked down its entire $150M investment in FTX to zero after the cryptocurrency exchange imploded last November. However, the firm was able to offset the loss due to the $7.5B realized and unrealized gains on Sequoia Capital Global Growth Fund III. Per UC Regents' recent financial statements, the fund's value was up by 5.2%, touching $8.17B in the 12 months ending June 30, and had an IRR of 21.8%. Why it matters: Sequoia's gains are a stark contrast to the current industry performance. Per Pitchbook, U.S.-based VC funds posted an IRR of -16.8% for the 12 months ending in Q1. Since the downturn started last year, more than 80% of the startups have marked down their valuations by 10% to 60%, per advisory group Houlihan Lokey. Relevance: UC Regents has also invested in VC funds launched by Khosla Ventures, Canaan, Iconiq, and GGV. Khosla Ventures' three funds lost an average of 16.6%, Canaan's fund lost 21%, Iconiq's fund was marked down by 25.6%, and GGV's seven funds lost an average of 4.2%. | | | |
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| 3 | | VC funding for global supply chain tech startups fell 70% YoY to $3B in Q2 2023, per Pitchbook. The drop was even more apparent for freight tech startups, which have only managed to raise $0.6B in VC funding in the first nine months of the year. At the current rate, the freight tech industry will raise less than a quarter of the total funding secured in 2022 by the end of this year. More: - The VC crunch has further aggravated the troubles for the freight tech industry, which is already facing unprecedented pressures, including a drop in demand, soaring fuel costs, reduced shipment volumes, and slumping spot rates.
- Flexport reported a 70% revenue drop within the first nine months of this year.
- Its peer, Convoy, shut down operations last week after failing to find a buyer and running out of cash.
- Convoy touched a peak valuation of $3.8B in 2022 and was backed by Baillie Gifford, Greylock Partners, CapitalG, and Bill Gates.
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| 4 | | Wellington Access Ventures (WAV) secured $150M in capital commitments toward its new fund. The fund will back early-stage startups led by underrepresented founders. WAV typically invests in B2B software, fintech, and consumer sectors. More: - The parent group Wellington Management — which manages more than $1.1T for pensions, endowments, and foundations — has committed $50M of its own capital to the new fund.
- The Wellington Venture Investments I fund has already backed a dozen startups, including virtual cardiac intervention program startups Movn Health and debt repayment business Clerkie.
- Individual check sizes will range between $1M to $6M.
Zoom out: - WAV's new fund comes amidst a VC funding drought for underrepresented founders.
- In Q3 2023, Black founders were able to nab only 0.13% of the total VC funding deployed in the U.S.
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| 5 | | Recently retired NBA player Andre Iguodala successfully raised a $200M VC fund along with longtime business partner Rudy Cline-Thomas. The duo had formed Mastry Ventures in 2021. Along with the fundraising news, the VC firm rebranded itself to Mosaic General Partnership. More: - Mosaic intends to back seed and early-stage startups across fintech, healthcare, enterprise software, and sports sectors.
- The duo has invested in over 50 companies to date, the most notable being Allbirds, Hims, Coinbase, and Carta.
Zoom out: - With the new fund, the Golden State Warriors player joins the likes of other NBA players transitioning into the VC industry, such as Kevin Durant, who established Thirtyfive Ventures along with agent Rich Kleiman.
- Thirtyfive Ventures has backed 61 startups since its inception in 2016.
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| 6 | | Today's Funding: AI - Chinese large language model (LLM) firm Zhipu raised more than $342M from Alibaba Group, Tencent, Xiaomi Corp., Meituan, and others.
Cybersecurity - Israeli web3 security company Blockaid bagged $33M in Series A funding led by Ribbit, Variant, Cyberstarts, Sequoia, and Greylock.
Data - AI-powered data center optimization startup MangoBoost raised a $55M Series A funding round at a valuation of $300M, per TechCrunch. IMM Investment and Shinhan Venture Investment co-led the latest round.
Enterprise software - Enterprise internet browser maker Island secured $100M in Series C funding at a valuation of $1.5B. Prysm Capital led the round with additional backing from Canapi Ventures, Insight Partners, Stripes, Sequoia, Cyberstarts, and Georgian.
Logistics - Supply chain solutions provider Inteluck closed its Series C funding round at $34M. The round was led by Navegar, with additional support from East Ventures.
PropTech - Residential real estate listings marketplace Noman Homes extended its Series A funding round with another $20M. 01 Advisors, HighSage Ventures, Abstract Ventures, Partech, and Precursor Ventures backed the Acrew Capital-led round.
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- Healthcare startup Carbon Health reportedly posted an EBITDA loss of $84M in H1 2023, per The Information. The startup was able to bring down its average loss per patient visit from $105 last year to $63 in January 2023.
- San Francisco-based Crusoe Energy Systems availed a $200M debt facility from VC firm Upper90 to purchase GPUs.
- Lightspeed Venture Partners hired Aaron Frank as their newest venture partner. Frank was the co-founder and CEO of credit card platform Final and also built the foundations for the Apple Card.
- Irish cloud service provider Ekco acquired IT startup Radius Technologies for an undisclosed sum.
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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 | |
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