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| Here's a look at today's VC briefing. - SoftBank's Vision Fund reports $1.7B loss in Q3 due to a drop in valuations of portfolio companies, including WeWork
- European VC funds report -14.2% IRR, outperforming U.S. funds, which reported -16.5% losses over a one-year period
- Vanguard marks down stake in Ola by 60% to $18.75M, down from the original investment amount of $51.7M
Thank you. Karan
p/karan-chafekar | |
| 1 | | SoftBank Group's Vision Fund reported a $1.7B loss in Q3 2022. The losses were due to the drop in valuations of portfolio companies, such as WeWork, SenseTime, Symbotic, and AutoStore, and foreign exchange. Cumulative losses through September were $14.2B. More: - SoftBank Group as a whole reported losses of $6.2B (931B yen) in Q3.
- CFO Yoshimitsu Goto said that one of the positives from the quarter was the $4.65B capital surplus from the chip unit Arm Holdings' IPO.
- Goto said that Arm's value has tripled since their initial investment.
- The firm claims it has $29B in assets it could cash in on, including stakes in ByteDance, Fanatics, and PayPay Corp.
- Despite the grim financial results, the firm claims to be in "investment mode."
- Goto added, "We're investing two to three times more than we did on a quarterly basis compared with the same period a year ago."
- The firm invested $1.5B in Q3 2023, falling short of the $1.8B invested in the same period last year.
Zoom out: - The Japanese investment group's Vision Fund unit has lost $53B in capital over the past two years.
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| 2 | | European VC funds outperformed U.S. funds by reporting lower losses over the past year. 
What the numbers say: Traditionally, U.S. funds have outperformed European VC vehicles. However, the trend reversed due to the economic downturn. European VC funds reported -14.2% IRR over a one-year period, better than the -16.5% losses reported by U.S. funds, per Pitchbook. What happened: U.S. funds have performed worse than their European counterparts as the former has seen large markdowns on their portfolio startups, which typically also have higher valuations to begin with. Where to see the impact: The U.S. maintains an advantage over other regions as it has a larger startup investment pool, developed infrastructure, and abundant LP capital like pensions. Its vast market allows more follow-on funding, enabling higher valuations and returns. The U.S. also has a bigger exit environment. And U.S. VCs are increasingly investing in other regions like Europe and Asia to capture their growth. But Europe's maturing ecosystem has narrowed the performance gap in the challenging environment, even as both report losses. | | | |
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| 3 | | Vanguard has marked down the value of its investment in Indian ride-hailing firm Ola by nearly 63.7% to $18.75M at the end of August. Vanguard had initially invested $51.7M in Ola. The revised valuation gives Ola an implied valuation of $2.65B, 35% less than its peak valuation of $7.3B in 2021. More: - Vanguard had already lowered the value of its investment to about $33.8M at the end of February before slashing it even further to $25M at the end of May.
- Ola has raised more than $3.9B from investors.
Zoom out: - Meanwhile, Neuberger Berman slashed the value of its investment in PharmEasy by more than 90%.
- The firm has revised the value of its stake to $823,432, which represents a significant drop over the original investment of $8.8M from October 2021.
- The revised share prices give the startup an implied valuation of about $550M, much lower than its peak valuation of $5.6B from the second half of 2021.
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| 4 | | Global impact startups have raked in $41B in VC funding so far this year, per Dealroom data reviewed by Pioneers Post. VC funding for impact startups is projected to reach $48.1B by the end of this year. The projected total is 36% less than last year's tally of $75B. More: - Despite a dip in funding, cleantech remains the most funded area from the U.N.'s Sustainable Development Goals.
- Europe has surpassed the U.S. as the top impact VC source, with the Netherlands performing well above average.
- According to the report, low and middle-income countries attracted just a 5% share of the global impact funding.
- ImpactCity's program leader, Coos Santing, notes, "We need to put more funding towards entrepreneurs and funds in Africa, Latin America, and Asia. It's important that we don't just make this a local thing, but think about it internationally from day one."
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| 5 | | VC firm Founder Collective secured $95M in capital commitments toward its fifth fund. The fund is the firm's largest yet to date and 12% larger than its predecessor, which closed in 2020. More: - The firm's four investment partners are the biggest limited partners in the fund.
- Founder Collective's managing partner Eric Paley said, "Being our own largest investor does empower us in some ways to have a longer view. It also empowers us to worry more about the performance of the fund than management fees."
- The fund's other limited partners include Sapphire Partners, Cendana Capital, and Foundry Group.
- Notable portfolio startups include Airtable, Whoop, SeatGeek, and Shield AI, the last of which bagged a $2.7B valuation this October.
- The firm successfully exited nine billion-dollar companies, including adtech firm The Trade Desk, which went public in 2016, and PillPack, which Amazon acquired in 2018.
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| 6 | | Today's Funding: Biotech - Automated healthtech solutions startup Eleos Health raised a Series B round worth $40M. Menlo Ventures led the round, joined by F-Prime Capital, Eight Roads, Arkin Digital Health, SamsungNEXT, and ION.
- Biotech startup Ascidian Therapeutics extended its Series A funding round by $40M. The capital came from Apple Tree Partners.
Manufacturing - Advanced magnetic materials maker Niron Magnetics secured $33M in fresh funding from GM Ventures, Stellantis Ventures, and the University of Minnesota.
PropTech - Short-term rentals and vacation home ownership startup Summer raised $18M in Series A funding and a $50M debt facility. Setpoint Capital provided the debt facility, while the equity funding came from QED, Lightspeed Venture Partners, Alumni Ventures, Gaingels, Not Boring Ventures, and others.
Quantum computing - Quantum computing and networking startup Photonic bagged $100M in fresh funding from Microsoft, British Columbia Investment Management Corp., the U.K. government's National Security Strategic Investment Fund, Inovia Capital, and Amadeus Capital Partners.
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| 7 | | Quick Hits: - Bike Friday is on! Upway sells discounted e-bikes from top brands, rigorously inspected and certified by master mechanics. Get discounts of up to $1,000 on a selection of e-Bikes!*
- Truist Ventures is contributing capital to Mendoza Ventures' $100M Early Growth Fintech Fund as a limited partner.
- Swiss VC firm Momenta signed Rockwell Automation as the anchor investor for its $100M fund.
- Beewise, a startup that uses AI and robots to manage bee colonies, is looking to raise between $50M and $100M in Series D funding, per Axios. The firm expects to be profitable by the beginning of 2025.
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Term of the Day Social democracy: Social democracy is a political ideology that seeks to promote economic and social justice through government intervention. Question of the Week What perks would convince you to return to the office? Join the conversation |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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