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| Here’s a look at today’s VC briefing. - 📉 VC funding share for Black founders in the U.K. declined in 2023
- 🚀 VC funding for hydrogen startups set a new record in 2023
- 🤝 Paul Judge, Marcelo Claure acquired Open Opportunity Fund from SoftBank
We also interviewed Andrew Romans, the general partner of 7BC Venture Capital. You can read the interview here. Thank you. Karan
p/karan-chafekar | |
| 1 | | Black founder-led startups in the U.K. raised $165M of VC funding so far this year, per Extend Ventures' new report seen by TechCrunch. Funding raised by Black founders accounts for 0.95% of the total $17.3B VC funding invested in the U.K. More: - Funding share for Black founders in the U.K. has decreased from 1.13% in 2021 and 1.02% in 2022.
- Black-led startups raked in $316M out of the total $30.88B funding from 2022 and $454M out of the $40.03B deployed in 2021.
- Since Black people represent 2.5% of the U.K. population, Extend Ventures' data and research strategist George Windsor believes that at least 2.5% of the funding must be allocated to Black-led startups to have proper representation in the venture ecosystem.
- Although the funding share has declined this year, it is still significantly better than the lower allocation seen in previous years, such as 0.28% in 2019, 0.23% in 2018, and 0.38% in 2017.
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| 2 | | So far this year, VCs invested $1.4B in U.S.-based hydrogen startups, per Pitchbook. 
What the numbers say: This year's total marks a new record high, crossing the previous record of $973.8M set in 2022. At this rate, Pitchbook anticipates this year's funding will surpass the combined totals of 2021 and 2022 by year-end. Relevance: The surge in investment stems from heightened investor interest, particularly in renewable hydrogen energy development, processing, and storage, thanks to the Inflation Reduction Act's tax credits and the Department of Energy's allocation of $7B towards the development of hydrogen hubs. Notable funding rounds closed this year include fossil-free hydrogen systems startup Electric Hydrogen's $380M Series C and natural hydrogen drilling startup Koloma's $91M funding round. Electric Hydrogen received a valuation of $1.08B at the latest funding round, more than double its previous valuation of $440M from its Series B round 14 months ago. What happened: Meanwhile, some investors, including Lowercarbon Capital, are hesitant to invest in the sector due to concerns over hydrogen energy leaks, a potent greenhouse gas. Additionally, the industry is still in its nascent stage, and there is uncertainty over regulations. | | | |
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| 3 | | Southeast Asian investors expect VC funding for the region to increase in 2024, per CNBC. However, only startups that demonstrate a clear and viable path to profitability are likely to receive funding. More: - Antler's co-founder and managing partner of Asia, Jussi Salovaara, predicts VC funding for the region to improve in the second half of next year.
- Insignia Ventures Partners' founding managing partner, Yinglan Tan, shares the same view, adding, "If 2023 was a gear shift year, 2024 will be the year of turning a corner. And it will be a tight corner, with pressures from geopolitics, interest rates, public markets, a maturing competitive landscape impacting monetization and capital allocation for tech companies."
Zoom out: - VCs invested $20.3B in Southeast Asian startups in Q3 2023, 16% lower than the previous quarter's tally of $24.2B, per KPMG.
- The recent quarter had the lowest quarterly funding on record since Q1 2017.
- At the end of 2022, Southeast Asian VC firms had $15.7B in dry powder available for deployment, up from $12.4B in 2021.
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| 4 | | Paul Judge and Marcelo Claure are acquiring the Open Opportunity Fund from SoftBank. The duo will take over the firm's $100M Open Opportunity Fund 1, $150M Fund 2, and the entire portfolio. Judge will be the firm's chairman and managing partner, while Claure has been appointed as the fund's chairman and general partner. More: - SoftBank launched the Open Opportunity Fund 2 with a target corpus of $200M.
- Claure, who returned to SoftBank after previously serving as its COO until 2022, said the fund "demonstrates a concrete move towards more diverse representation within all layers of the venture capital ecosystem."
- The firm has backed 75 Black and Latino-founder-led startups with the first fund and made 46 follow-on rounds.
- Open Opportunity Fund 2 will invest in 50 pre-seed to growth-stage companies across fintech, healthtech, edtech, sales and marketing, and enterprise IT sectors.
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| 5 | | Baird Capital secured $218M in capital commitments towards its sixth VC fund, its largest yet. The firm intends to back mid-stage companies in B2B technology and services markets that have between $2M and $15M in revenue. Individual checks will range from $10M to $20M. More: - The firm has already invested $34.5M capital from the new fund in three startups.
- Baird led a $31.5M Series C round in SaaS management firm Zylo, a $25M Series B into data privacy management software firm Osano, and a $12M Series B round into predictive forecasting and capacity planning software startup Parallax.
- Baird Capital is the VC and PE arm of Robert W. Baird & Co.
- The firm's fifth venture fund closed at $215M, while the fourth fund was worth $185M.
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| 6 | | Today's Funding: AI - 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.
Agtech - Agricultural biotech startup NewLeaf Symbiotics closed its Series D funding round at $45M. Gullspång Re:food led the round, joined by Otter Capital Partners LP, S2G Ventures, Leaps by Bayer, and others.
Biotech - Precision allosteric small molecule therapeutics startup Atavistik Bio secured $40M in fresh funding from existing investors, including The Column Group, Lux Capital, and Nextech Invest.
Cybersecurity - SimSpace, a cybersecurity startup that simulates tech stacks for cybersecurity training, bagged $45M in fresh funding led by L2 Point Management.
- Anti-ransomware platform Halcyon raised a $40M Series B round led by Bain Capital Ventures.
Healthcare - Specialty healthcare network solution provider Employer Direct Healthcare cemented its unicorn status with a $92M funding round led by Insight Partners. Existing investors Serent Capital, Redmile Group, and Dundon Capital participated in the round.
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- The University of Michigan quietly invested $75M into Sam Altman's VC firm Hydrazine Capital's fourth fund, which launched earlier this March.
- Climatic VC secured $65M in capital commitments towards its debut fund. The fund received backing from Reid Hoffman, Chris Sacca, Chris Larsen, Stephen Simon, MIO Partners, NfX, Foundry Group, Mayfield, and others.
- Japanese media and gaming company GREE's VC division GREE LP fund recently closed a $52.75M fund-of-funds to invest in U.S.-based VC funds.
- Solo general partner Suzanne Fletcher's new investment firm, Zelda Ventures, closed its debut fund at $33M.
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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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