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| Here’s a look at today’s VC briefing. - 💰 Anthropic is in talks with Menlo Ventures and other investors to raise $750M
- 📈 Agtech and AI were the only two sectors to see a bump in median valuations
- 🚀 Rally Ventures crosses $1B in AUM with $240M fifth fund
Thank you. Karan
p/karan-chafekar | |
| 1 | | AI startup Anthropic is in talks with investors to raise a $750M funding round, sources informed Reuters. The firm is eyeing a $18.4B valuation at the round. Menlo Ventures is reportedly leading the fundraising. More: - Anthropic, co-founded by former OpenAI employees Dario and Daniela Amodei, is known for developing the Claude chatbot.
- The firm's latest model, Claude 2, competes directly with OpenAI's ChatGPT-4 model.
- Anthropic claims that Claude 2 can process prompts containing 100,000 tokens, significantly higher than ChatGPT-4's 8,000 tokens, which gives the former a higher capacity to analyze long documents.
- News of Anthropic's latest funding rounds comes just months after it raised $2B from Alphabet's Google and $4B from Amazon.com through a convertible note offering.
- The firm was valued at $5B earlier this year, per Pitchbook and Bloomberg.
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| 2 | | Out of the dozen tech verticals analyzed by Pitchbook, only AI and agtech saw a slight uptick in median valuations this year. 
What the numbers say: There was a noticeable decline in deal values and counts across all sectors. Median valuations dropped in 10 out of the 12 sectors analyzed by Pitchbook. The e-commerce sector was the most impacted among the tech sectors analyzed, witnessing a decline of 77% in deal value and 56% in deal count compared to the same time last year. The sector's struggles have increased in recent times due to stiff competition, changing consumer preferences, and rising costs. Within the domain, startups developing innovative ways to sell to customers are still getting funded. Relevance: Deal value and deal count dropped by 69% and 51% in the crypto and blockchain sectors. Investor interest waned due to the volatility of crypto prices and the fallout of crypto exchange FTX. Median valuations of edtech startups slumped by 44%, more than any other sector. While the agtech sector saw a 41% drop in deal value, its median valuation increased by 10% YoY, the highest among the group. Investors are pumping money into the sector over concerns about potential food shortages. In 2023, the AI sector saw the most hype, due to which median valuations of the broader AI and machine learning sector surged by 5%. Deal value and median valuations of defense tech sector startups remained flat compared to last year. | | | |
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| 3 | | Early-stage VC firm Rally Ventures secured $240M in capital commitments toward its fifth fund. The firm intends to back early-stage enterprise technology startups operating in AI/ML, cybersecurity, fintech, and SaaS sectors. More: - The new fund pushed the firm's assets under management over the $1B mark.
- Since its founding in 2012, Rally Ventures has backed 76 startups and exited 19 of them.
- Notable organizations backed by the firm include Arctic Wolf, UiPath, Braze, Coupa, SportsEngine, Twistlock, and Verodin.
- Former Google CIO Ben Fried joined the firm as a venture partner in August.
- Rally Tech Partners, a nationwide network of leaders from the most influential tech companies, has invested nearly $130M in Rally Ventures funds to date.
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| 4 | | The European IPO market could possibly witness a resurgence in 2024 as several companies are waiting for interest rates to fall and equity markets to stabilize. Among the companies waiting for the IPO markets to reopen are German perfume retailer Douglas, Spanish fashion retailer Tendam, fashion and beauty conglomerate Puig, and fleet services firm DKV Mobility. More: - BNP Paribas SA's equity capital market head Andreas Bernstorff said, "We definitely have a busier ECM calendar, rates have come down, inflation is cooling, and valuation expectations are more reasonable."
- Private equity firm CVC is also looking to revive its IPO plans and could possibly hold an IPO listing next year.
Zoom out: - Capital raised by companies through European IPO listings dropped by 36% from $22B in 2022 to $14B so far this year, per Bloomberg.
- This year's tally marks the lowest amount in almost a decade and is a fraction of the $90B raised in 2021.
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| 5 | | Al Mada Ventures launched a $110M evergreen fund to invest in about 20 African startups. The fund aims to bridge the growth-stage funding gap for African startups, which is typically dominated by development financial institutions and foreign investors. More: - Parent group Al Mada Holdings, the largest private investment fund in Africa, anchored the fund.
- Al Mada Holdings spun out the venture capital division last March.
- Startups backed by Al Mada Ventures include healthtech startup Susu and an unnamed Dutch hotel booking platform.
- The fund is sector-agnostic but primarily invests in financial services, health, logistics, renewable energy, mining, distribution, retail, education, and telecom sectors.
- Individual ticket sizes for seed-stage investments will range from $500,000 to $1M and $2M to $6M for Series A and Series B investments.
- The firm could make follow-on investments of $8M to $10M in promising portfolio startups.
Zoom out: - In 2022, African startups raised between $5B and $6B in equity and debt funding, significantly higher than the $366M raised in 2016.
- 77% of the investors backing African startups were foreign entities.
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| 6 | | Today's Funding: Biotech - Biopharmaceutical startup Sudo Biosciences closed its Series B round at $116M. Enavate Sciences and TPG co-led the round, joined by Sanofi Ventures, Surveyor Capital, Monograph Capital, and Eventide Asset Management.
Fintech - 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.
Robotics - 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.
Software - Podcasting platform Podimo raised €44M ($48M) in fresh funding led by the Danish Export and Investment Fund, with additional support from HighlandX and Augustinus Fabrikker.
Spacetech - Japanese microsatellite maker Axelspace Holdings Corp. closed its Series D funding round at $44M. The funding was provided by Sumitomo Mitsui Banking Corporation, Mitsui Fudosan, Yamato Holdings, Epson X Investment Corp., and others.
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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.*
- The British Virgin Islands court has frozen $1B in assets of Three Arrows Capital, a cryptocurrency hedge fund that imploded last year. The court-appointed liquidator, Teneo, estimates that the firm owes creditors around $3.3B.
- Dutch fund manager LUMO Labs hired Dagmar van Ravenswaay Claasen and Sabine Schoorl as senior partners for its upcoming LUMO Rise Fund.
- Israel's largest VC investor, OurCrowd, has earmarked $50M towards an Israel Resilience Fund to invest in startups impacted by the nation's war with Palestinian militant group Hamas.
- Blume Ventures reported 5.7x returns from investments made from the firm's first fund. 17 companies out of 34 contributed 98% of the returns.
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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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