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| Here's a look at today's VC briefing. - 35 VCs sign voluntary agreement to develop AI responsibly
- VCs are still not inking deals despite a drop in valuations
- Several crypto unicorns witness a drop in valuations
Thank you. Karan
p/karan-chafekar | |
| 1 | | 35 VC firms have signed a voluntary agreement to develop artificial intelligence technology responsibly. The nonprofit coalition of investors, Responsible Innovation Labs (RIL), will release the guidelines and protocols today. More: - Investors have developed the guidelines in consultation with the U.S. Commerce Department, academics, and civil society groups.
- The guidelines cover areas such as forecasting AI risks and product safety audits.
- In addition to the guidelines, the firm will release a protocol document, essentially serving as an implementation guide for startups.
- General Catalyst, Felicis Ventures, Bain Capital, IVP, Insight Partners, and others have signed RIL's voluntary agreement.
- Since this is a voluntary agreement, the standards are not binding, and it's up to the VCs to self-enforce the guidelines.
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| 2 | | VCs have still not started scooping up startup stakes at a discount despite valuations hitting bottom, per Pitchbook. 
What the numbers say: Valuation step-ups of startups being acquired or going public have fallen to a 10-year low. As a result, the exit environment is less attractive to investors as companies are going public at lower valuations than their most recent VC rounds. This year's two most notable IPOs, Instacart and Klaviyo both debuted at lower valuations than their most recent VC rounds. Startups are also selling to corporate acquirers at lower prices. What happened: Median pre-money valuations of seed-stage startups have defied the VC funding dip, continuing their upward trajectory due to the presence of large multistage investors. However, large investors have slowly started pulling back, which could possibly bring down prices. Meanwhile, early-stage prices bottomed out at the $40M mark, remaining there for five quarters. Median late-stage valuations have risen for two quarters in a row. However, only the most robust late-stage startups are getting funded, while several are struggling due to macroeconomic headwinds. | | | |
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| 3 | | Several crypto unicorn startups have seen a markdown in valuations due to the recent headwinds for the sector and the failure of prominent companies, including FTX. Last week, Coatue marked down the value of its stake in the NFT marketplace platform OpenSea. The markdowns give the firm an implied valuation of $1.4B, 90% less than its peak valuation of $13B. More: - The sector minted more than 90 unicorn startups over the recent years.
- However, several are at risk of losing their unicorn valuations due to a drop in prices.
- Crypto startups that are struggling include blockchain technology company Figure, crypto infrastructure firm Blockstream, crypto payments startup MoonPay, bitcoin trading and banking firm NYDIG, crypto exchange Blockchain.com, and crypto asset manager Babel Finance.
- Blockstream was reportedly raising a down round at a 70% lower valuation than its peak price of $3.2B, while Tiger Global Management lowered MoonPay's valuation from $3.4B to $2.8B.
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| 4 | | Singaporean VC firm Foresight Ventures acquired a majority stake in crypto media group The Block. Foresight reportedly invested $56M to acquire an 80% stake in the company. The deal values the firm at $70M. More: - Foresight acquired a vast majority of the stake from Michael McCaffrey, who was the former CEO of The Block.
- McCaffrey was ousted as CEO after it came to light that he had taken $43M in undisclosed loans from FTX founder Sam Bankman-Fried to finance a Bahamian property and buy out non-employee shareholders in 2021.
- The Block will continue to operate as an independent division after the acquisition, with CEO Larry Cermak set to continue at the helm.
- Foresight CEO Forest Bai, who will take up the chairman position, said, "We think The Block is one of the crown assets in the crypto media space. Our view is that the media aspect will continue to drive education and adoption in the space."
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| 5 | | Monta Vista Capital secured $48M in capital commitments toward its third fund. The firm intends to back 15 B2B startups in infrastructure, vertical SaaS, and digital transformation sectors. More: - The firm has raised capital from its large network of 65 individual investors rather than institutional investors.
- Monta Vista has raised $72.8M in capital across three funds.
- Individual check sizes will range from $1M to $2M.
- Notable portfolio companies include marketing tech company Captiv8, customs clearance company KlearNow, API security firm Cequence Security, automotive retail platform Tekion, and mobile infrastructure company Eridan.
- Cequence raised a Series C round, and Tekion raised a $250M Series D round in 2021.
- The firm successfully exited Nyansa after it was acquired by VMWare in 2020.
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| 6 | | Today's Funding: Biotech - VectorY Therapeutics, a Dutch biotech startup developing treatments for neurodegenerative diseases, raised a $138M (€129M) Series A round co-led by EQT Life Sciences and Forbion Growth Opportunities Fund.
Blockchain - British blockchain-based payments startup Fnality bagged $95.5M (£77.7M) in Series B funding. Goldman Sachs and BNP Paribas led the round, with participation from DTCC, Euroclear, Nomura, and WisdomTree.
E-commerce - SKC Capital and Pavilion Capital led a $17.8M Series A funding round into e-commerce enablement platform etaily.
Fintech - Venture investing platform Influence closed its seed funding round at $20.8M. Alpha Praetorian Capital led the round, with additional backing from The London Fund, ACME Innovation, and others.
Manufacturing - Generative AI and 3D printing-powered digital manufacturing system provider Divergent Technologies secured $230M in Series D funding. Hexagon AB led the round, contributing $100M of the total.
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| 7 | | Quick Hits: - Elevate your Kubernetes skills with this must-read resource for building cloud-native applications. Get your Kubernetes Cookbook today.*
- California recently introduced the Investing in Equity Act that requires VC firms to report the race, ethnicity, gender, and disability status of founders of their portfolio startups. Per the WSJ, the newly introduced law could impact other money managers as well, including private equity and growth investors.
- RevRoad Capital secured $61M capital for its inaugural fund, making it the largest early-stage debut fund in Utah. The firm will invest in startups across EV, AI, SaaS, manufacturing, and other transformative industries.
- New York-based VC firm Interplay raised a $45M third fund to back B2B marketplace and vertical software startups at the Series A stage.
- Early-stage investor Stafanie Thomas joined Zeal Capital Partners as its managing director.
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Term of the Day Keyword stuffing: Keyword stuffing involves the inclusion of keywords into a website’s content unnaturally or repetitively to manipulate search engine algorithms. 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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