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| Here's a look at today's VC briefing. - 🌱 Doubts linger over Shell's VC cleantech investments after a potential strategic shift.
- 🇪🇺 European startup valuations continue to slump, impacting the venture growth stage the most.
- 🇩🇪 Germany closes €1B fund of funds to back German and European VCs.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Oil and gas giant Shell's CVC division, Shell Ventures, has participated in 44 cleantech VC deals since 2018, per Pitchbook. But Shell's potential strategy shift to double down on natural gas and oil production under new CEO Wael Sawan has raised questions on its future cleantech investments. Last month, the firm announced it would be cutting at least 200 jobs from its low-carbon solutions and hydrogen teams in 2024. Shell also scaled back its plans for hydrogen fueling stations globally after its hydrogen hub in Louisiana failed to secure federal funding. More: - The news comes as Shell reported a record-high $6.2B quarterly profit in Q3 due to rising oil prices.
- A Shell spokesperson dismissed rumors by saying, "Shell remains committed to investing in viable low-carbon business models and focusing on our strengths as we play our part in decarbonization of the global energy system."
- Shell still intends to invest between $10B and $15B in low-carbon energy over the next two years.
Zoom out: - Global oil and gas corporations participated in climate tech VC deals worth $3.1B in Q3, making it the highest quarterly deal value on record, per Pitchbook.
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| 2 | | Annual median valuations of European early-stage startups dipped for the first time in a decade in 2023, falling from €5.7M ($6.2M) in 2022 to €5.3M ($5.8M), per Pitchbook. 
What the numbers say: Valuations have continued their downward trajectory, slumping 18.4% from Q2 to Q3. The global venture funding slump has hit venture growth stage startups the hardest. The annual pre-money valuations of European venture growth startups slumped by 26.1% in 2023 to €22.9M ($24.9M). Venture growth startups will likely see further valuation cuts as interest rates have remained high and exit options remain unavailable. What happened: 21.3% of the total rounds completed so far this year were down rounds, per Pitchbook. The percentage of down rounds has increased compared to 14.8% last year. The number of down rounds closed this year is the highest since 2014. Relevance: Acquisitions have helped generate the majority of exit value this year, with the median valuation of acquisitions being €23.2M ($25.3M) in the first nine months of the year. Despite fewer startups being listed, median valuations at their public listings increased from €39.3M ($42.9M) in 2022 to €40.9M ($44.6M) this year. | | | |
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| 3 | | Germany secured €1B ($1.09B) in capital commitments towards Growth Fund Germany, a VC fund of funds that aims to support German and European VCs. 20 institutional investors, including Allianz, BlackRock, Debeka, and Generali Deutschland, provided €650M ($709.3M) of the capital. The remaining sum came from anchor investors: the German federal government and KfW Capital. More: - The fund is part of the federal government's broader Future Fund initiative set up in 2021.
- Growth Fund Germany has already committed €265M ($289M) of the capital towards 16 VC funds, including Vsquared Ventures and Gilde Healthcare.
- Per KfW Capital, German and European VC firms will receive an equal share of the funding.
- 75% of the capital will be invested in VCs that promote environmental and social governance (ESG) programs or have investments in startups to reduce carbon emissions.
- The fund will back VCs focusing on digital services, life science, climate tech, and food tech.
Zoom out: - Neighboring country France also has a €1B fund of funds managed by Bpifrance.
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| 4 | | Hyatt Hotels' executive chairman Thomas Pritzker's family office launched a new VC firm called 53 Stations. The Pritzker Organization (TPO) is the sole LP for the firm and committed $190M towards Fund I. The fund aims to invest in early-stage startups that are relevant to companies that TPO has majority control over. More: - The fund is sector-agnostic and will primarily back seed to Series B North American startups.
- 53 Stations aims to lead or co-lead investments, with individual check sizes averaging $1M to $10M.
- The fund has already made seven investments to date, including AI-powered global trade compliance platform Altana, smokeless tobacco alternatives maker Black Buffalo, taxes and bookkeeping fintech Collective, and advanced propulsion technologies startup Whisper Aero.
- Having no outside LP gives the firm the freedom to aggressively invest in startups amidst the downturn, said founder and managing partner Kevin King.
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| 5 | | Canadian climate tech seed fund Active Impact Investments has secured capital commitments worth $70M towards its third fund. The firm has set a target of $120M for the fund. The firm intends to invest in 20 startups across North America working on technology to reduce greenhouse gas emissions, circular economy sustainability, clean energy and transportation, infrastructure and carbon solutions, and sustainable food and water, per general partner Tom Boddez. More: - The fund is co-anchored by Northleaf Capital Partners and Fondaction, a labor-sponsored fund.
- Other institutional investors that supported the fund include Co-operators Corporate Venture Capital Fund and Deloitte Ventures.
- Active Impact has invested in 31 companies to date and has successfully exited three investments.
Zoom out: - Startups backed by Active Impact Investments have helped mitigate over 550,000 tons of CO2 so far.
- The firm aims to mitigate 1,000,000 tons of CO2 by the end of 2023.
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| 6 | | Today's Funding: Biotech - Drug discovery biotech startup Vivodyne raised a $38M seed funding round led by Khosla Ventures. The round saw participation from CS Ventures, Kairos Ventures, Bison Ventures, and MBX Capital.
Data - Distributed data processing platform Expanso raised a seed round worth $7.5M led by General Catalyst and Hetz Ventures. Array Ventures participated in the funding round.
E-commerce - Retail and e-commerce AI platform Birdseye bagged a $3M seed funding from Drive Capital.
Enterprise software - Cloud-based enterprise software firm Ninety secured $35M in fresh funding. Blue Cloud Ventures led the Series B round, joined by Catalyst Investors and existing backer Insight Partners.
Healthcare - Africa Healthcare Network, a startup providing dialysis services across Africa, raised $20M in equity and debt funding from Africa50, AfricInvest, and Ohara Pharmaceutical.
PropTech - DoorFeed, a startup developing a platform to manage large-scale real estate portfolios, extended its €3.5M ($3.8M) seed funding round from 2021 with an additional €7M ($7.6M) capital led by Motive Ventures. The initial seed round's lead investors, Stride and Seedcamp, participated in the new round as well.
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- Web2 and Web3 startups incubator and accelerator Leo Ventures raised a fresh fund of $10M to back startups across APAC, India, and the Middle East.
- VenturEast and InvAsent have successfully exited their investment in Comprehensive Prosthetics & Orthotics after it raised a new growth round from NorthCreek and Parkway Partners.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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