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| Here's a look at today's VC briefing. - Canada cleantech funding to set new record in 2023
- Global CVC-backed funding dips 10% QoQ in Q3 despite broader funding rebound
- Funding drought threatens startup shutdowns, per Business Insider
Thank you. Karan
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| 1 | | Cleantech startups in Canada have already raised $949M in total funding so far this year, per Crunchbase. At this rate, the funding will most certainly exceed last year's record-setting totals of $987M and create a new record high. More: - Carbon capture, geothermal energy, and utility-scale solar have been the standout sub-sectors within cleantech that continue to rake in maximum VC funding.
- More than half of the funding has gone to early-stage startups at the seed to Series B levels.
- Notable funding rounds include clean geothermal energy firm Eavor's $186M Series B, carbon removal technologies firm CarbonCure Technologies' $80M, and distributed and utility-scale solar projects firm OYA Renewables' $71M funding rounds.
Zoom out: - Canada ranked fifth globally in cleantech venture and growth investment between 2021 and Q3 2023, per Cleantech Group.
- Canada only trails behind the U.S., China, U.K., and Germany in the standings.
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| 2 | | Global corporate venture capitalists invested $13.3B in Q3 2023, down 10% from the previous quarter's tally of $14.8B, per CBInsights. 
What the numbers say: The drop starkly contrasted with the broader venture funding, which showed an 11% QoQ growth in Q3 2023. Despite the dip, CVCs increased their capital allocation for the retail tech sector, investing $1.1B in Q3 2023, up 22% QoQ. Mitsubishi UFJ Capital and SMBC Venture Capital were the most active CVC investors, participating in 16 and 12 deals, respectively. Relevance: The median CVC-backed deal size dropped from $10M in 2022 to $8.8M in 2023. Late-stage witnessed the largest decline, with median CVC-backed deal sizes dropping 41% YTD from $85M in 2022 to $50M in 2023. Median early-stage CVC-backed deal sizes dropped 3% from $5.8M in 2022 to $5.6M in 2023. Two of the largest deals with CVC participation were Databricks' $504M Series I and Ascend Elements' $406M Series D rounds. Mega rounds of more than $100M bagged 41% of the total capital deployed. | | | |
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| 3 | | The average time taken by Series B startups to raise the subsequent Series C rounds has widened to 1,090 days, or nearly three years, in Q3 2023, per equity ownership platform Carta. The average time between seed to Series A rounds has also increased to 787 days. The longer average times between rounds and the prolonged VC funding dip suggest that several startups will struggle to continue operations. More: - Business Insider estimates that nearly 51,000 startups will be looking to raise funding between the end of this year and into 2024.
- The situation is grim for late-stage startups that have been particularly hit by the slump.
- Unable to raise fresh funding, some startups have already started shutting down, with Business Insider claiming that the "startup extinction season is well underway."
- $4B healthcare AI startup Olive AI announced its closing operations and selling off its core business units last week.
- A few weeks ago, digital freight startup Convoy shut down and later sold its technology to competitor Flexport.
Zoom out: - North American VC funding dipped to its lowest quarterly total since 2018 to $36.7B in Q3 2023, per Pitchbook.
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| 4 | | Peak XV received a 10x return on its investment in Mamaearth, per IPO documents reviewed by TechCrunch. The transaction gave Peak XV its fourth 10x or greater return since separating from Sequoia Capital six months ago. More: - The windfall marks Peak XV's 20th IPO in India and Southeast Asia, per TechCrunch.
- The firm also sold off its remaining stake in Indian food delivery firm Zomato last week, giving Peak XV a 10x return on the original investment.
- Other outsized returns include a 12x gain on its investment in K12 Techno Services.
Zoom out: - Peak XV has a capital pool of $2.5B and has made 400 investments to date.
- Its portfolio consists of 50 unicorn startups and 40 companies that have more than $100M in annual revenues.
- The firm has accelerated its dealmaking, inking a dozen deals since June.
- Disclosure documents published by limited partner the University of California Regents show that the firm marked up the value of four of six funds recently.
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| 5 | | Autonomous driving startups have raised less than $4.5B in VC funding so far this year, per Crunchbase. At the current pace, Crunchbase predicts that the annual funding total by the end of this year will be the lowest since 2020. Deal numbers have declined significantly, with only 139 deals completed so far this year, the lowest across the past six years. More: - Despite the fewer deals, the sector has seen a few mega deals, the most notable being self-driving commercial trucking startup Stack AV's $1B round from September.
- Didi Woya and Pony.ai also managed to raise big rounds this year.
- However, the funding dip for the sector is expected to continue as big automakers are investing in trying to develop autonomous driving technology internally rather than investing in startups.
Zoom out: - 264 autonomous driving startups secured VC funding worth $12.5B in 2021, setting the bar for the highest annual total so far.
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| 6 | | Today's Funding: AI - 01.AI, a Chinese AI large language model startup founded by Sinovation Ventures' CEO Kai-Fu Lee, entered the unicorn club less than eight months after its launch. The firm secured an undisclosed sum from Alibaba Group's cloud unit and other investors.
AgTech - German agtech startup Tupu raised $3.2M in seed funding. FoodLabs and Zubi Capital led the round, with participation from Clear Current Capital, FoodHack, IT-Farm, CoastCap, and others.
Food & beverages - Non-dairy-based mozzarella cheese maker Dreamfarm bagged €5M ($5.38M) in pre-seed funding from Giampaolo Cagnin and Francesco Mutti.
Gaming - Mobile games publisher TapNation raised €15M ($16.13M) in fresh funding from Re-Sources Capital, Paluel-Marmont Capital, and other investors.
PropTech - Real estate brokerage platform Radius Agent bagged $13M in Series B funding. AXA Venture Partners led the funding, with NFX, Cota Capital, and Sierra Ventures participating in the round.
Software - Hourly workers management platform Nowsta secured $35M in Series C funding led by VMG Partners, with Builders VC participating in the round.
- QED Investors led a $20M Series A funding round into SMB international trade platform Finkargo. Nazca, Quona, Flybridge, Maya, and ONEVC participated in the round.
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- Dubai Integrated Economic Zones Authority (DIEZ) launched a $136M VC fund called Oraseya Capital to invest in local startups between the pre-seed and Series B stages.
- Micro VC firm Artha Venture Fund partially diluted its stake in fleet management company Everest Fleet, realizing a 19x return on its investment.
- Indian edtech startup Byju's reported $429.18M in revenue from its core business divisions for the financial year ending March 2022, missing the initial projections of $1.25B by more than half.
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INSIDE VENTURE CAPITAL LEADERBOARD (30 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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