| |
| Here's a look at today's VC briefing. - Fintech VC funding plunged 36% YoY despite a rebound in late-stage funding
- Ivy League endowments post worst returns in decade amidst the VC funding slump
- Geopolitical tensions help surge defense tech VC funding
Thank you. Karan
p/karan-chafekar | |
| 1 | | Venture capitalists invested $6B in global fintech startups in Q3 2023, down 36% YoY, per S&P Global. The overall funding plunged despite a 31% YoY surge in deal values for late-stage fintech startups, which ended the recent quarter with $2.56B. More: - Global fintech startups raised $29B in total funding from 1,655 funding rounds in the first nine months of 2023.
- Funding nearly halved in the first nine months of 2023 compared to the $54B raised in the same period last year.
- Funding slumped across all stages, with seed-stage startups witnessing a 56% drop to $539M.
- Series A stage funding slumped 64% to $509M, while growth-stage investments fell 87% to $577M.
- Average late-stage funding sizes remained flat at $58M, while seed, Series A, and growth rounds witnessed a drop of 8%, 13%, and 63%, respectively.
|     | |
| 2 | | Ivy League endowments posted the worst returns of the past decade in fiscal years 2022 and 2023, per Pitchbook. 
What the numbers say: Princeton University endowment posted a 1.7% loss on its investments in fiscal year 2023, starkly contrasting its 10.8% returns averaged over the last decade. Columbia University was the only institution among the Ivy League colleges to post a return of more than 4% in the most recent fiscal year. Columbia had reported a 7.6% loss in FY 2022. Harvard's endowment reported 2.9% returns, recovering from the 1.8% loss reported in the previous year. What's next: Returns from VC have dropped due to heightened interest rates, volatility in public equities, and a prolonged period of startup valuation markdowns. Harvard Management Company CEO N.P. Narvekar thinks that endowments are yet to feel the full brunt of the VC funding slump. Global Endowment Management's deputy chief investment officer, Matt Bank, said, "I think there's a scenario whereby [public] markets start to recover over the next 18-24 months, though it seems unlikely to me that private investments, particularly in VC, will drive portfolio returns." | | | |
| A message from our sponsor, Nudge Security. |  | | Download our free IT offboarding template to make sure you cover all the essential steps. In the age of SaaS, the old IT offboarding playbook of “disable AD account, forward email, recover and wipe device, and call it a day” is no longer enough. Our template covers common pitfalls, missteps, and missed steps all in a customizable Google sheet that you can tailor for your specific needs. Revoking access to apps managed in your IdP or SSO is not enough. Be sure you cover other critical steps with our handy checklist. Get The Template | |
|
| 3 | | U.S.-based defense tech startups raised $26.9B so far this year, per Pitchbook. Between 2021 and now, VCs invested nearly $100B in the sector, 40% more than the previous seven years combined. Funding has surged for the sector due to the recent wars and rising tensions with China. More: - VCs initially avoided backing defense tech startups over moral concerns and bureaucratic hurdles.
- However, startups in the sector have found a way to generate revenue from commercial applications.
- Plus, the sector is expected to grow at a CAGR of 16%, further increasing the allure of defense tech.
- Colossal Biosciences founder Ben Lamm said, "I definitely don't think it's a hype cycle. Defense tech will continue to grow. It will be a part of big funds' core strategies, and you'll see mid-tier [size] funds pop up to focus on the sector."
- Most notable companies in the sector include autonomous warfare systems maker Anduril, which was valued at $8.5B last year; defense systems developer Shield AI, which raised $200M at a $2.7B valuation last month; and AI-powered drones maker Skydio, which raised $230M at a $2.2B valuation earlier this February.
| | | |
| 4 | | According to a study by Ada Ventures, Diversity VC, and Google Cloud, all-male-owned VC funds in the U.K. raised about 10 times more capital than all-female funds from 2017-2023. All-male-owned VC funds also raised five times more than mixed-gender funds. More: - Of the £6.6B ($8.1B) worth of funds raised by U.K. VCs between 2017 and 2023, just £462.5M ($569.3M) went to all-female funds.
- The report found only 23 women have significant ownership stakes in U.K. VC firms, 17.7% of total stakeholders.
- Women held 81% of the non-investment titles as well as 56% of the junior titles.
- Ada Ventures' founding partner Check Warner said, "All LPs, but particularly LPs who are publicly funded, should be regularly and openly reporting on the gender breakdown of the funds where their capital is being invested — not just by job title, but by management company ownership, breakdown of carried interest allocation and investment committee membership, disaggregated by gender and other protected characteristics."
| | | |
| |
|
| 5 | | Elad Gill secured nearly $1.1B in capital commitments from 54 investors toward his third fund, Cosmic — Aleph 3. The fund is oversubscribed, surpassing the initial target of $820M, per securities filings seen by Pitchbook. The fund is the firm's largest yet to date, nearly 77% larger than its predecessor, which closed at $620M in 2021. More: - The fresh capital cements Gil's status as the top-funded solo VC in Silicon Valley.
- Harvard University's endowment is reportedly one of the LPs.
- Gill has invested in over 30 unicorns at early stages, including investing in Pinterest at the seed stage and Airbnb and Stripe at the Series A stage.
- Despite being a solo VC, Gill led a $450M Series D round for defense-tech startup Anduril.
- He also backed AI-powered chatbot maker Character.ai's $150M round, valued at $1B.
- Gill's most recent successful exits include Instacart, which went public in September, and Figma, which has received an acquisition offer of $20B from Adobe.
| | | |
| 6 | | Today's Funding: AI - German AI startup Aleph Alpha bagged $500M in Series B funding from Bosch Ventures, SAP, Hewlett Packard Enterprise, and Lidl. Innovation Park Artificial Intelligence led the funding round.
Consumer electronics - Refurbished electronics marketplace Refurbed closed its Series C funding round at $57M. Evli Growth Partners and C4 Group led the round, with participation from All Iron Venture and Speedinvest.
Data - Data observability platform Logz.io emerged from stealth with $23M funding, which includes a $17M Series A round led by Newlands. Blumberg Capital, Aspenwood Ventures, High Sage, and Exponent backed the funding round.
Fashion - Zelig, a fashion technology startup providing a distribution platform for fashion and accessories, raised $15M in Series A funding at a $100M valuation. Hilco Group led the round, joined by investor Bezikian Zareh.
Logistics - Indian logistics startup Xpressbees secured $80M in fresh funding led by the OntaTeachers'ers' Pension Plan VC fund division at a $1.4B valuation.
Semiconductor - Chinese semiconductor startup Changxin Xinqiao Memory Technologies Inc. secured $5.4B (39B yuan) from government-backed investors, including China Integrated Circuit Industry Investment Fund Phase II.
| | | |
| 7 | | Quick Hits: - Upway offers discounted e-bikes from top brands with a one-year warranty and 14-day returns. Buy your e-bike by Nov. 9 for a chance to enter a giveaway and receive your money back.*
- WeWork, the office-sharing company once valued at $47B in 2019, filed for Chapter 11 bankruptcy protection in New Jersey federal court on Monday.
- E-commerce payment solutions startup Klarna reported a quarterly operating profit of $12M in Q3 2023. The firm reported a profit for the first time since 2019.
- Former Airbnb executive Vlad Loktev joined Index Ventures as its newest partner. He will primarily focus on investing in the consumer sector.
- San Francisco-based VC firm GFR Fund secured $53.5M for its third fund. The firm will invest in the future of gaming, entertainment, and consumer technology.
- Bring your ideas to life in seconds. App, web, and UI design has never been easier with Uizard. You bring the ideas, AI does the rest. Sign up free!*
*This is sponsored content. | | | |
| Upcoming Events | | NOV
14 | | Dive into Metricool's plans and learn how to manage, analyze, and schedule content across all social media platforms.* | | | | | | | NOV
25 | | AI in Financial Services with Saroop Bharwani | | | | | | | NOV
25 | | The Future of Fractional Work with David Berkowitz | | | | | | * This is a sponsored event | | | |
Term of the Day Incubator: A business incubator is a program that provides founders with resources and funding to develop their product idea or business model. Question of the Week What perks would convince you to return to the office? Join the conversation |
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 | |
| |
| |
|
 | With 500+ 5-star G2 reviews, you’ll see why 3,500+ customers choose Drata to automate compliance for SOC 2, ISO 27001, GDPR and more. | |
|
| |
Comments
Post a Comment