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| Here's a look at today's VC briefing. - Carbon and emissions tech funding defies VC dip, sets new quarterly record
- U.K. is the top foreign investment destination for U.S. investors
- Japanese conglomerate SBI Holdings anchors Novastar Ventures' funds with $40M commitment
We interviewed Mac Venture Capital's Marlon Nichols, where he talked about investing in diverse founders. You can read excerpts from the interview below and watch the entire interview using the link provided. Thank you. Karan
p/karan-chafekar | |
| 1 | | Carbon and emissions tech startups defied the VC funding dip by securing $7.6B in VC funding in Q3 2023, per Pitchbook. Q3's quarterly total marked a new record high, beating the previous record of $5.8B set in Q3 2021 by $1.8B. More: - Funding for decarbonization technology startups has surged thanks to the government incentives from the U.S. Inflation Reduction Act that has lowered the cost of setting up factories.
- Notable mega-rounds raised by firms in the sector include green steel maker H2 Green Steel's $1.6B funding round and battery recycler Redwood Materials' $997.2M Series D round.
- Per Pitchbook analyst John MacDonagh, the sector witnessed eight deals that were larger than $250M.
- Rising investor interest led to increased median pre-money valuations for pre-seed, seed, and late-stage carbon tech firms compared to 2022.
- Investors are particularly interested in startups focused on low-carbon mineral mining and direct air carbon capture.
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| 2 | | So far this year, U.S. investors participated in 3,418 VC deals worth $50.2B in foreign markets, per Pitchbook. 
What happened: Total foreign deal participation has dropped compared to last year, when U.S. investors participated in 7,337 deals. Investors have become more risk-averse and are focusing on existing portfolio companies rather than new foreign deals. What the numbers say: The U.K. is the top foreign investment destination for U.S. investors, who have participated in 526 deals so far this year. Major deals involving U.S. investors include Abound's £500M ($606M) round backed by GSR Ventures and dog food company Butternut Box's £280M ($341M) fundraiser, which saw participation from General Atlantic. U.S. investors participated in 176 rounds in Germany, 150 in France, 281 rounds in India, and 113 deals in China. Relevance: U.S. investors have reduced their participation in Chinese startup deals after the introduction of the Biden administration's executive order limiting American investment in certain technology sectors. | | | |
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| 3 | | We interviewed Marlon Nichols, the co-founder and managing general partner of MaC Venture Capital. Marlon talked about diversity in the VC industry, the firm's investment thesis, and backing portfolio startups through the VC funding dip. We further dove into MaC's sector-agnostic investment strategy, investing in AI, and fund management challenges. 
Here's a sneak peek into some of the highlights: Marlon spoke about how the firm's diverse team helps them invest in a diverse set of entrepreneurs. He added, "So if we truly want to invest in a diverse set of entrepreneurs, I think the firm has to first represent that. And by representing that, what you're doing is you are essentially being able to set yourself to be able to tap into those communities directly … And so that helps to create, you know, a top of the funnel that's starting out more diverse than anyone else." While evaluating potential investment opportunities, Marlon looks for "massive challenges that present an opportunity" and "a founding team that has a unique advantage, not only for the company they're building but also the space that they're building in." Marlon also analyzes the founding team's past successes to identify sustained achievements across different aspects of their lives. Despite being sector-agnostic, MaC Venture Capital's partners have a deep understanding of certain industries and a credible network of experts, both of which help them make the right investment decisions. You can read the written transcript of the entire interview here. | | | |
| 4 | | Japanese conglomerate SBI Holdings has made a $40M multi-fund commitment toward pan-African VC firm Novastar Ventures' future funds. The deal gives SBI Holdings a minority stake in Novastar and a non-executive seat on its board as SBI's adviser in Africa. More: - SBI is reportedly set to raise another $40M from Japanese investors, bringing the total fundraising for Novastar to $80M.
- The new fund is aimed at backing agriculture and climate startups in Africa.
- Novastar is also raising a separate $200M from The Africa People + Planet Fund.
- Previously, it raised a $108M Africa Fund II and a $80M East Africa Fund.
- Novastar's portfolio includes e-commerce startup TradeDepot, insurtech Turaco, fintech Moniepoint, healthtech mPharma, furniture startup MoKo, and agtech iProcure.
Zoom out: - VCs are investing $5B annually in African startups, a figure that has increased 20-fold over the past decade since Novastar's founding.
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| 5 | | DeepTech-focused VC firm Bee Partners exceeded its initial target of $50M at the final closing of its fourth fund. The San Francisco-based VC firm invests in pre-seed startups in deeptech sectors such as AI, machine learning, robotics, synthetic biology, and other frontier technologies. More: - Despite an overall slowdown in the market, Bee Partners has seen a 40% YoY surge in deal flow.
- Bee Partners' managing partner, Michael Berolzheimer, said, "We'll invest in a team with a great idea, even in a company not incorporated yet. We are literally writing that first check only days after incorporation, and we're comfortable doing so. For a founding team to be able to pick up $500,000 or $1M at a time is very unique."
- Individual check sizes average $800,000, but the firm has invested as little as $350,000 and as much as $1.5M.
- The firm has made nine investments from the fund, exhausting nearly 20% of the fund's capital.
- Notable investments include brand integrity protection startup Nova, fermentation technology company Pow.bio, and product-purchasing platform for dental offices Wellplaece.
- Three of the new investments were generative AI companies.
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| 6 | | Today's Funding: AI - Vespa.ai, an AI-powered search and scaling engine that spun out from Yahoo, received a $31M Series A capital infusion from Blossom Capital.
Cleantech - 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.
Cybersecurity - Open-source cybersecurity software developer Chainguard bagged $61M in Series B funding. Spark Capital led the round, with additional backing from Sequoia Capital, Mantis VC, Amplify Partners, and Banana Capital.
Enterprise software - Procurement management software developer Oro Labs secured $34M in fresh funding. Felicis led the Series B round, with Norwest Venture Partners, B Capital, and XYZ Venture Capital participating in the round.
Healthcare - Women's healthcare startup Gynesonics secured $42.5M in fresh funding led by Amzak Healthcare, Endeavour Vision, Kaiser Permanente Ventures, Runway Growth Capital, and Bain Capital.
Insuretech - Small business-focused insuretech startup Next Insurance raised $265M from a strategic investment from Allstate and Allianz.
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- Sheryl Sandberg and her husband, Tom Bernthal, have established a VC firm called Sandberg Bernthal Venture Partners.
- New VC firm Bioluminescence emerged from stealth with $477M in assets under management spread across two funds.
- WeWork is planning to file for Chapter 11 bankruptcy protection as early as next week, sources told The Wall Street Journal.
- LinkedIn co-founder Reid Hoffman joined San Francisco-based VC firm Village Global as its chairman.
- Eximius Ventures hired Preeti Sampat as its general partner.
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Term of the Day Ecosystem: An ecosystem is an interconnected system of networks, organizations, and support for startups in a particular location. Question of the Week What's one tool or app that has significantly made your life easier at work? Join the conversation |
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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