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| Here's a look at today's VC briefing. - 🌏 Venture funding for Southeast Asia dropped 24% QoQ in Q3 2023
- 🥇 California retained its position as the top VC-funded state
- 🇬🇧 U.K. Government to invest £320M in startups
Thank you. Karan
p/karan-chafekar | |
| 1 | | VCs invested $1.6B in Southeast Asian startups in Q3 2023, per a new CB Insights report. The investment amount dropped by 24% QoQ while the deal count slumped by 20%. More: - Singaporean startups bagged the largest share of the funding with $963M.
- Indonesia ranked the second highest on the standings, securing $522M in Q3.
- Deal sizes contracted in all stages except for the late stages, which witnessed a surge.
- Median late-stage deal sizes reverted to 2021's figures, touching $40M in Q3.
- Median valuations surged 157% YoY to reach $100M so far this year.
- Exit values grew thanks to a 23% QoQ surge in M&A activity, which has continued to climb for the third consecutive quarter.
- The quarter recorded 38 M&A transactions, five IPOs, and two SPAC listings.
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| 2 | | California retained its position as the top VC-funded state, raking in 51% of the total funding so far this year, per Crunchbase. 
What the numbers say: So far this year, VCs have invested nearly $54B in California-based startups. The state is on track to rake in $72B in total funding by this year-end. The three states of California, New York, and Massachusetts continue to dominate VC funding. New York startups raised $11.4B, or 11% of the funding. Meanwhile, Massachusetts startups secured $10.4B, or 10% of funding. Relevance: Despite the migration of talent away from San Francisco, investors exhibit unwavering confidence in California's startup landscape. Saxon Baum, a partner at Florida Funders, attributes this continued investment to a preference for local companies during market downturns. Baum said, "Probably more VCs look to invest in their backyard because it feels safer and you feel more in control." California's share of funding dipped to 47% in 2019 before moving back to 51% in 2023. | | | |
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| 3 | | Menlo Park, California-based VC firm Riverwood Capital secured capital commitments worth $1.8B for its new fund. The firm will use the new fund to invest in 20 to 30 profitable high-growth mid-sized technology companies. Individual check sizes will range from $25M to $100M. More: - Riverwood Capital has backed 75 companies to date, the most notable of which are camera maker GoPro, ride-hailing company 99, software firm Globant SA, VTEX, Nextdoor, and iFLY.
- So far this year, the firm has backed Cognosos, InvGate, SpyCloud, Hyperproof, and Logcomex.
- Riverwood successfully exited its stake in ForgeRock after it was acquired by Thoma Bravo for $2.3B.
- The firm claims it has averaged an annual revenue growth of 40% across its portfolio.
- At the end of the third quarter, the firm had nearly $6B in assets under management.
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| 4 | | The U.K. Government has pledged to invest £320M ($400M) in domestic science and technology startups. £250M ($313M) of the funding will go to British Business Bank's (BBB) two new funds. Of the remaining sum, £50M ($62.7M) will be invested in BBB's Future Fund: Breakthrough investment vehicle and £20M ($25M) will be invested in university spinouts. More: - BBB's Future Fund: Breakthrough division has £375M (£470M) worth of assets under management.
- U.K. Chancellor of the Exchequer Jeremy Hunt said, "Innovation is the key to our future success as a nation, and it's vital that we do all we can to help companies start, scale, and grow in the U.K."
- The government hopes the new investment will help garner commitments worth £750M ($940M) from asset managers.
Zoom out: - The current investment package is part of a broader Venture Capital Investment Compact initiative, which is the government's effort to unlock £75B ($94B) pension fund investment for startups.
- Today, the initiative received support from 50 more firms, bringing the total signatories count to 70.
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| 5 | | Growth equity firm SEVA raised $85M in capital towards its debut fund. The fund closed higher than the initial target of $50M. SEVA intends to back eight to 10 companies from the first fund. The firm intends to invest between $5M and $15M into profitable founder-led companies. More: - Former Susquehanna Growth Equity executive Shalin Mehta is the solo general partner of the firm.
- Mehta has experience in investing in internet, software, data, marketplace, and technology-related companies.
- Mehta was able to raise capital from institutional investors, university endowments, family offices, and founders within a short span of just four months.
Zoom out: - Several emerging fund managers debuted this year, including Avra, Yellow, Garuda Ventures, Ovni Capital, Oversubscribed Ventures, Emblem, The Family Fund, and Phenomenal Ventures.
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| 6 | | Today's Funding: Biotech - Drug R&D and commercial drug delivery firm Viva Biotech raised $210M in fresh funding from Temasek, Highlight Capital, and True Light.
E-commerce - D2C e-commerce retailer Matsmart-Motatos received €40M ($43.8M) in growth capital led by Circularity Capital.
Enterprise software - File-sharing platform maker LucidLink Corp. raised a Series C funding round worth $75M. Brighton Park Capital led the funding round, joined by Headline, Baseline Ventures, and other institutional investors.
Food Tech - Finnish food tech startup Solar Foods closed its Series B funding round with €8M ($8.7M) in capital.
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- Microsoft CEO Satya Nadella hinted that Sam Altman could possibly return to OpenAI in some capacity.
- CB Insights expects 257 venture-backed companies to debut on the public markets next year. The firm believes that companies will pursue IPOs in 2024 even if market conditions remain unfavorable, as several startups will be under pressure to deliver returns to investors.
- Intel Capital hired Lisa Cohen as a partner in order to increase its investments in Israeli startups. Cohen was previously leading investments for Innogy.
- Defy.vc hired Medha Agarwal as a general partner and Amy Yin as a venture partner.
- Interplay raised $45M capital towards its Early Stage Fund, which intends to back B2B marketplace and vertical software companies between seed to Series B stages.
- Italian early-stage VC firm 2100 Ventures announced a €30M ($32.87M) fund to invest in European B2B startups.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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