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| Here's a look at today's VC briefing. - AI semiconductor startup funding remains subdued despite heightened interest in AI
- VC funding for D2C consumer products and e-commerce startups plunges
- Norrsken22 raises $205M fund to back tech startups in Africa
We have also rounded up the top late-stage funding rounds this week. Thank you. Karan
p/karan-chafekar | |
| 1 | | AI-focused semiconductor chips startups raised $810M in VC funding in Q3 from 26 deals, per Pitchbook. The hype around generative AI has not translated into higher investment for AI chip startups, which remains a long way off from the quarterly peaks seen in early 2021. More: - Investors are optimistic about the potential for smaller startups to design custom semiconductor chips that can run specific AI models using less energy, thereby saving costs.
- Lux Capital's partner Grace Isford said, "The big gorilla in the room is Nvidia. You could see growth by non-Nvidia players for specific specialized use cases."
- However, startups are still a long way from challenging the market leader, Nvidia.
- Notable startups that raised mega funding rounds include Enflame Technology's $237M (2B yuan) Series D led by Tencent and Golden Partners Capital, D-Matrix's $110M Series B led by Temasek, Tenstorrent's $100M fundraiser, and Kneron's $97M Series B extension round led by Hyundai and Samsung Catalyst Fund.
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| 2 | | VCs deployed $1.5B late-stage and beyond global startups this week between Oct. 28 and Nov. 3, per Crunchbase data. Insurtech startups raked in 18% of the funding this week. Biotech, AI, and fintech startups nabbed 17%, 15%, and 14% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Small business-focused insurtech startup Next Insurance raised $265M from a strategic investment from Allstate and Allianz.
- MapLight Therapeutics, a biopharma company making novel therapeutics to treat neurological and psychiatric disorders, closed its Series C funding round at $225M. The funding was provided by Novo Holdings, 5AM Ventures, Cowen Healthcare Investments, and other investors.
- Riot Ventures and the U.S. Innovative Technology Fund led a $200M Series F funding round into defense and aerospace startup Shield AI, valuing the firm at $2.7B. Existing investors Disruptive and Snowpoint Ventures participated in the round, joined by new investor Ark Investment.
- Saudi Arabian buy-now-pay-later fintech startup Tabby more than doubled its valuation to $1.5B at its latest $200M Series D funding round led by Wellington Management. The round – which comes ahead of its planned IPO listing – saw participation from Bluepool Capital, STV, Mubadala Investment Capital, PayPal Ventures, and Arbor Ventures.
- Industrial electric motors manufacturer Infinitum raised $185M in Series E funding led by Just Climate. Galvanize Climate Solutions, NGP, Alliance Resource Partners, Rockwell Automation, Chevron Technology Ventures, and other investors participated in the funding round.
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| 3 | | U.S.-based D2C consumer products and e-commerce startups have raised just $133M so far this year, per Crunchbase. The funding is a fraction of the $1B raised in 2022 and represents a 97% decline from the $5B secured in 2023. More: - Funding surged in 2021 as e-commerce aggregators sought to acquire smaller brands and increase their brand presence on online retail platforms such as Amazon.
- But now, VCs are less inclined to invest in aggregators as consumer preferences towards online shopping have changed, and VC-backed startups in the space have failed to make it in the public markets.
- Stocks of footwear brand Allbirds and fashion subscription platform Rent the Runway are both trading below the $1 per share mark.
- Heavily funded startups have had to resort to selling their stock through offline channels to exhaust their product stocks.
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| 4 | | Norrsken22 secured capital commitments worth $205M toward its debut fund. The fund aims to back tech startups in Africa working in the fintech, edtech, and meditech sectors. Norrsken22 will focus primarily on startups in South Africa, Nigeria, Ghana, Kenya, and Egypt. More: - 59% of the fund's capital came from more than 30 unicorn founders, including Skype's co-founder Niklas Zennström, iZettle's co-founder Jacob de Geer, Delivery Hero's co-founder Niklas Östberg, and Flutterwave's CEO Olugbenga Agboola.
- Institutional limited partners that joined the fund include Standard Bank Group, Norfund, British International Investment, the International Finance Corporation, and the U.S. International Development Finance Corporation.
- The firm has already made five investments to date, including challenger bank Tyme Bank, B2B commerce retail platform Sabi, identity verification solution Smile Identity, auto financing platform Autochek, and fintech app Shara.
- Norrsken22 will reserve 50% of the fund's capital for pre-seed to Series A investments, with the remaining half set aside for follow-on rounds.
- The fund is writing checks worth $10M on average but is willing to go as high as $16M.
Zoom out: - Per Briter Bridges, African startups raised $2.5B in VC funding in the first half of the year.
- In 2022, African startups raked in between $5B and $6B in VC funding.
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| 5 | | Ex/ante, a new VC firm led by Zoe Weinberg, secured $33M capital for its fund, exceeding its initial target of $25M. The fund will focus on "agentic tech" related to human agency and digital rights. Ex/ante will invest between $500,000 and $1M in pre-seed and seed-stage startups. More: - The firm has spun out from former Google CEO Eric Schmidt's philanthropic venture arm, Schmidt Futures.
- Cendana Capital, Marc Andreessen, a16z partner Chris Dixon, the Ford Foundation, Union Square Ventures, Protocol Labs, and the Klarman Family Foundation have backed the new fund.
- Ex/ante has already backed nine startups with the capital raised so far, including deep-fake detection startup Reality Defender, consumer identity company Lockr, and self-custody business Webacy.
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| 6 | | Today's Funding: Biotech - Small molecule medicines biotech startup Terremoto Biosciences closed its Series B funding round at $175M. The investment came from EcoR1 Capital, Novo Holdings, Cormorant Capital, OrbiMed, and Third Rock Ventures.
- Swiss biotech startup Memo Therapeutics closed its Series C funding round at $27.67M. Puroes Bioventures led the round, with participation from Swisscanto, Vesalius Biocapital, and Adjuvant Capital.
- Spatial multi-omics developer Stellaromics bagged $25M in Series A capital from Plaisance Capital Management and other investors.
Cybersecurity - Xage Security secured $20M in Series B2 funding from Piva Capital, March Capital, SCF Partners, Overture Climate Fund, Valor Equity Partners, Chevron Technology Ventures, and others.
Insurtech - Insurance technology firm Wefox raised $55M in fresh funding through convertible debt from Deutsche Bank and UniCredit. The firm was able to maintain its previous valuation of $4.5B as it didn't raise equity funding.
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- Global corporate investors invested $15.2B in the energy storage segment in the first nine months of this year, down 31% YoY from the $22B invested in the same period last year, per Mercom Capital.
- Early-stage VC firm Cervin Ventures appointed Taylor Oliver as the firm's principal. Oliver will focus on investing in enterprise applications, specifically in the areas of commerce, fintech, and supply chain.
- Danielle Ardon Baratz and Atad Peled joined Israeli VC firm Red Dot Capital as the firm's newest partners.
- Sai Venture Capital Pvt. launched Pakistan's first local currency-denominated fund in seven years, per Bloomberg. The firm is looking to raise the equivalent of $10M from local investors and has already secured commitments for 40% of the target.
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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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