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| Hey Insiders, Here are the latest stories: - VC funding dip starts impacting seed-stage investments
- Colorado VC funding dips below the $1B mark for the first time in two years
- Atlassian acquires Loom at a 36% discount over its most recent valuation
We have also rounded up the top late-stage funding rounds of this week. If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | Seed stage funding, which initially showed resilience to the VC funding dip, is now starting to get impacted by the slowdown, per the WSJ. Number of seed funding deals dropped to 820 in the third quarter, marking the lowest quarterly total since 2013. This marks a significant shift from the previous two quarters, where funding deals consistently exceeded the 1,200 mark. More: - Seed-stage startups, which typically have little to no revenue and raised less than $5M, were shielded from the VC funding dip as investors were optimistic about their return potential after the next five or six years.
- However, as the VC funding dip has prolonged, investors are becoming more cautious with their capital deployment.
- VCs observed portfolio startups struggling to secure subsequent funding rounds, leading to a reevaluation of capital deployment strategies.
- Some VC firms are now worried about their own future, as they are finding it difficult to raise new funds from limited partners.
Zoom out: - VCs completed 2,716 deals for U.S.-based startups in the third quarter, 31% less YoY.
Q: Do you think the VC funding slump for seed-stage startups will continue to worsen? Join the conversation here. |     | |
| 2 | | VCs deployed $333.6M in late-stage and beyond global startups this week between Oct. 7 and Oct. 13, per Crunchbase data. Biotech startups raked in 30% of the funding this week. Transportation, fashion, and big data startups nabbed 25%, 22%, and 15% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Agomab Therapeutics, a biotech startup developing novel treatments to resolve fibrosis, repair tissue structure, and restore organ function, closed its Series C funding round at $100M. Fidelity Management & Research Company led the round with participation from EQT Life Sciences, Canaan, Dawn Biopharma, KKR, and others.
- Semiconductor modules and electric drive solutions platform Leadrive Technology raised $82.3M (RMB 600M) in Series D funding led by Legend Capital.
- D2C eyewear brand Pair Eyewear secured $75M in fresh funding to pursue international expansion. The Series C round was led by Prysm Capital and supported by existing investors New Enterprise Associates and Javelin Venture Partners.
- Chinese AI-powered big data solutions startup DataCanvas bagged $41M in Series D funding from investors, including China Electronics Smart Fund and People Capital.
- Logistics and supply chain solutions provider Shiprocket extended its Series E funding round by an additional $11M from McKinsey's investment arm AFOS. The firm managed to retain the same $1.23B valuation from the previous round.
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| 3 | | Startups in Colorado raised $855.42M in VC funding in Q3 2023, dropping to the lowest quarterly value since Q3 2021. VC funding dipped below the $1B mark for the first time in two years. More: - 74 VC deals were completed in the recent quarter, lower than Q2 2023's tally of 105 and Q3 2022's tally of 114.
- Colorado-based startups had raised $1.2B in VC funding in the previous quarter.
- Pitchbook analyst Kyle Stanford said, "For the year-to-date, just $42.7B has been raised, setting 2023 on pace to reach the lowest full-year total since 2017."
- The recent quarter saw only one mega deal of more than $100M when Sierra Space raised a $290M Series B round at $5.3B.
- Other notable funding rounds that closed in the recent quarter include Marsbox E-commerce's $75M Series A, Iontra's $46.9M, and Nexo Therapeutics' $60M Series A funding rounds.
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| 4 | | B2B productivity software maker Atlassian acquired video message software startup Loom for $975M. The transaction price represents a 36% discount over Loom's most recent valuation of $1.53B from May 2021, when it raised a $130M Series C round led by Andreessen Horowitz. More: - Despite the lower transaction price, investors that backed the firm in the early stages are set to receive heavy payouts on their initial investments, particularly Loom's seed stage lead investors General Catalyst and Point Nine Capital.
- The same goes for Kleiner Perkins, which led Loom's $10.7M Series A round in 2018, and Sequoia and Coatue Management, which backed Loom's $30M Series B round.
- The firm had raised $238.2M in venture funding, which includes a $40M venture debt facility from SVB.
Zoom out: - Other notable acquisitions involving software startups announced this year include Databricks' acquisition of MosiacML for $1.3B and Thomson Reuters' purchase of Casetext for $650M.
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| 5 | | VCs invested $16.4B in European startups in Q3 2023, up 28% QoQ and 2% YoY per Crunchbase. The surge was due to a rise in late-stage funding rounds. Meanwhile, seed and early-stage funding rounds have dropped. More: - The U.K. bagged a majority share of the funding, followed by Sweden, France, and Germany.
- 11% of the total funding, or $1.8B, was invested in AI startups in the region in Q3 2023.
- Notable AI startups to raise funding in the recent quarter include Conigital, Helsing, Poolside, Tractable, and Neura Robotics.
- Late-stage funding doubled since the preceding quarter, with sustainable energy sector startups raising the largest rounds.
- Early-stage funding reached the lowest level since Q3 2022, closing the recent quarter at $4.5B.
- Seed-stage funding amounted to $1.4B in Q3, down 30% YoY compared to $2.1B invested in the same period a year ago.
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| 6 | | Today's Funding: Biotech - Israeli biotech firm Mana.bio raked in $19.5M in seed funding co-led by Andreessen Horowitz Bio+ Health, Base4 Capital, NFX, LionBird, and Technion Institute of Technology.
Climate tech - Scope3, a startup that helps marketers analyze and reduce emissions from digital ads, secured $20M funding led by GV. The firm was valued at $100M at the Series B funding round.
Consumer electronics - High-performance micro-LED maker Mojo Vision closed its Series A funding round at $43.5M. New Enterprise Associates and Khosla Ventures led the round, with participation from Vanedge Capital, Dolby Family Ventures, Liberty Global Ventures, and others.
- British smart home energy technology company myenergi bagged £30M ($36.8M) in fresh funding from Energy Impact Partners.
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- Image bank website Freepik acquired the social media platform EyeEm for an undisclosed amount.
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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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