| Here's a look at today's VC briefing. - ⏸ 38% of active VCs paused dealmaking in 2023
- 🔋 Northvolt bags $1.2B to boost battery production
- 💰 Spark Capital looking to raise two funds worth $2.1B
We have also rounded up the top late-stage funding rounds of the week. Thank you. Karan
p/karan-chafekar | |
| 1 | | 38% of the U.S.-based active VC investors, defined as making two or more deals, paused their dealmaking in the first three quarters of this year, per Pitchbook. Approximately 2,275 VC investors stopped dealmaking this year. More: - Pitchbook reckons that the decline in participation from active investors could be attributed to running out of dry powder or turning in zombie funds.
- Such inactive investors are likely offloading their portfolio stakes in the secondary markets to generate some returns from previous investments.
- Additionally, several crossover funds stopped allocating capital to the VC asset class altogether.
- The list could also contain some investors sitting on cash reserves, likely waiting for startup valuations to fall even further before investing.
Zoom out: - Limited partners and other investors predict the number of VC funds will plunge, given the current market conditions.
- Earlier this month, Boston-based VC firm OpenView announced it is stopping all new investments and returning the capital remaining from the recent $570M seventh fund back to LPs.
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| 2 | | VCs deployed $1.3B in late-stage and beyond global startups this week between Dec. 16 and Dec. 22, per Crunchbase data. Fintech startups raked in 37% of the funding this week. Aerospace, AI, and robotics startups nabbed 16%, 15%, and 11% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Saudi Arabian buy-now-pay-later solutions fintech startup Tamara cemented its unicorn status with a $340M equity funding round provided by Saudi sovereign wealth fund Sanabil and SNB Capital.
- Lightmatter, a Boston, Massachusetts-based startup developing photonic chips for AI, extended its Series C round by another $155M. GV (Google Ventures) and Viking Global Investors led the current Series C-2 funding round, which valued the firm at $1.2B.
- Chinese space startup Galactic Energy raised $154M (1.1B yuan) in Series C and C+ funding. Ziyang Heavy Industry Fund led the round, supported by Bengbu Investment Group, Langfang Linkong, Jintuo Capital, and others.
- Warehouse robotics startup GreyOrange bagged $145M in Series D funding led by Anthelion Capital. Existing investors Mithril, 3State Ventures, and Blume Ventures participated in the round.
- Goldman Sachs-backed savings and investment platform Vestwell entered the unicorn club with a $125M Series D funding round led by Lightspeed Venture Partners. Investors participating in the round include Fin Capital, Primary Venture Partners, FinTech Collective, Blue Owl, and HarbourVest.
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| 3 | | VC firm Spark Capital is raising two new funds worth $2.1B, per SEC filings seen by Axios. $700M of the capital will be earmarked for the firm's eight early-stage focused flagship fund. The remaining $1.4B will be allocated to its fifth growth-stage fund. More: - In early 2022, Spark raised a series of funds worth $2.1B, the same as the current target.
- Notable firms previously backed by Spark Capital include Twitter, Oculus, Coinbase, and Slack.
- Earlier this March, Spark led a $300M round into AI startup Anthropic at a pre-money valuation of $4.1B.
- A few weeks later, the firm co-led a $350M Series B round into Adept AI along with General Catalyst at a post-money valuation of $1B.
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| 4 | | Swedish battery maker Northvolt AB raised $1.2B through a convertible note offering. The firm will use the proceeds to boost battery production at its factory in Northern Sweden. CFO Alexander Hartman said that the firm is investing about $200M every month to ramp up production at its domestic and international facilities. More: - The latest funding round extends last year's convertible note to $3.5B.
- It initially raised $1.1B through the convertible note last year, which it extended by $1.2B this August after getting investments from BlackRock and CCP Investments.
- Danica Pension, KfW, CDPQ, East Innovate, and Investissement Quebec provided the latest funding, bringing the total equity and debt funding raised to date to $10B.
- Hartman said the company opted for the convertible note as "it minimizes discussions on valuation, has downside protection, and converts into equity in the future."
- The firm reported $1.1B (11B Swedish kroner) in losses in the first nine months of the year, representing an eight-fold increase over the same period last year.
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| 5 | | Earlier this year, Japan's $1.5T Government Pension Investment Fund developed the public market equivalent (PME) method to benchmark private equity fund returns against public equity. The new method builds upon a previous approach called direct alpha, which used a private equity fund's discounted cash flow to determine the fund's returns compared to public benchmarks. More: - The new method helps the fund estimate the returns more accurately than the traditional internal rate of return and multiple of invested capital metrics reported by private equity and venture capital firms.
- Direct alpha and Kaplan-Schoar are two of the most widely used metrics to evaluate a fund's performance.
- A PE fund's actual performance is typically difficult to judge due to the random cash flows and a lack of periodic asset pricing.
- Since each method, including the PME method, has their own shortcomings, investors typically use a wide variety of metrics to gauge the expected returns from PE funds.
- The Japanese pension fund reckons the PME method is "more robust" than direct alpha as it uses discounted cash flows.
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| 6 | | Today's Funding: Biotech - Clinical-stage biopharmaceutical startup Lyndra Therapeutics closed its Series E funding round at $101M. Sarissa Capital led the round, joined by Sun Pharmaceutical Industries Ltd. and Polaris Partners.
- Merck Global Health Innovation Fund and ARTIS Ventures co-led a $32M Series A round into molecularly targeted biotherapeutics startup Unnatural Products.
- Precision medicine startup ImpriMed raised a $23M Series A round led by SBVA, with participation from HRZ Han River Partners, SK Telecom, Ignite Innovation Fund, Murex Partners, and others.
Cloud computing - Cloud software provider Visma raised over €1B ($1.1B) in fresh funding from 20 new investors, including Altaroc, Jane Street, and NYC Retirement System. Visma was valued at €19B ($20.9B) in the recent round.
Energy - Plenitude, an energy transition company launched by Eni, received a €500M ($550.6M) investment from Energy Infrastructure Partners (EIP). The deal has a provision that could increase the total investment amount to €700M ($770.8M).
Foodtech - Cloud kitchen startup Kitchens@ raked in $65M in Series C funding. Names of the investors were not disclosed.
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| 7 | | Quick Hits: - Stocks come with voting rights that can yield an extra 5% each year. Get started on Shareholder Vote Exchange to start earning today.*
- European life sciences VC firm Hadean Ventures raised €144M ($158.6M) toward its second fund from limited partners including EIF, KfW Capital, and Tesi. The firm aims to back pharma, biotech, medtech, diagnostics, and digital health startups across Europe.
- Red Cell secured $91.2M in capital commitments towards its RCIF I fund, which aims to make investments up to $5M in pre-seed healthcare and defense tech startups.
- European VC firm Sofinnova Partners welcomed Andrew M. Weiss as its newest venture partner.
- EV charging solutions startup EVCS has raised $7.5M in fresh funding, against a target of $20M, per SEC filings seen by TechCrunch. The new round could be an extension of the $18.8M Series A round that closed in July 2022.
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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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