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| Here's a look at today's VC briefing. - 🚀 Gulf investors are increasing their investments in Southeast Asian startups
- 📉 Global VC funding dipped 16% YoY in November
- ⛔ OpenView abruptly shut down and will return capital from the seventh fund back to LPs
We interviewed Ernestine Fu, the general partner at Brave Capital, where she talked about investing in down cycles, evaluating potential investments, and their investment thesis. You can catch the interview here. Thank you. Karan
p/karan-chafekar | |
| 1 | | Sovereign funds from Saudi Arabia, the United Arab Emirates, and Qatar have significantly increased their investment in Southeast Asian startups. Since the start of 2022, Gulf investors have inked 59 deals in the region, significantly higher than the seven deals made in 2018-19. More: - Qatar Investment Authority, which has $475B in assets under management, recently participated in Malaysian used car platform Carsome's $300M funding round.
- QIA has also set up an office in Singapore in 2021 to increase its exposure in the region.
- Abu Dhabi state fund Mubadala Investment Company acquired a strategic stake in carbon exchange firm AirCarbon, while Aramco Ventures led a $10M round into renewable energy certificates issue Redex.
- The Gulf's heightened interest stems from their belief that "cross-pollination" with Southeast Asian startups can bolster their own tech sectors.
Zoom out: - The heavy investment from Gulf investors has been unable to fill the funding void after Chinese investors retreated.
- VC funding plunged 70% YoY to $4B in the first half of the year, per Financial Times.
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| 2 | | Global startups raised $19.2B in VC funding in November, down 16% YoY compared to the $23B secured in the same month last year, per Crunchbase. 
What the numbers say: Funding has dropped by two-thirds compared to the record high set in November 2021. Early-stage startups witnessed the largest decline of 34% YoY. Meanwhile, seed and late-stage funding saw modest declines of 15% and 7% YoY, respectively. U.S. startups raked in less than 50% of the total global funding, ending the month with $9B. Relevance: Investors continue to invest heavily in the healthcare and financial services sectors, with each industry bagging $3B capital in the month. The AI sector raised the second-highest sum, closing the month with $2.4B. Aleph Alpha and Together AI were the AI startups that raised the largest funding rounds in the month. Blockchain.com raised a down round that halved its valuation to $7B, while Next Insurance had to settle for a flat round, which helped the firm keep its previous valuation of $4B from 2021. Where to see the impact: While exit activity remained subdued, M&A transactions picked up pace. The two most notable M&A transactions announced in November include Blackstone Group's $2.3B acquisition of pet care marketplace Rover and Palo Alto Networks' $625M acquisition of cybersecurity startup Talon Cyber Security. | | | |
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| 3 | | VCs invested $467.6M in Web3 startups in November. Investments surged by 52% compared to October's tally of $307.7M. The news comes as crypto markets surged by 25% in November, with Bitcoin hitting a 2023 high. More: - Despite the surge, Web3 VC funding is far from the record highs seen in 2022.
- Nevertheless, funding has shown a resurgence compared to the low of $283M seen in August.
- Crypto exchange and wallet provider Blockchain.com's $110M Series E funding made up a quarter of the monthly total.
- Other notable rounds that closed in the month include blockchain-based wholesale payment system Fnality Interntional's $95M Series B round and cryptography chipmaker Ingonyama's $20M fundraiser.
- Including debt and crowdfunding rounds, the monthly total for November could be well over $2B, per CryptoCarp.
- Dragonfly general partner Rob Hadick said, "VC in crypto is starting to show some of the same signs of previous bull markets. Quicker deals, lighter touch diligence, bidding wars, more focus on friendly governance terms, etc."
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| 4 | | Boston-based VC firm OpenView Venture Partners is shutting down and will return the capital from its seventh fund to limited partners. The news comes just nine months after it closed its seventh fund at $570M, shy of its initial goal of $800M. More: - The firm will not make any new investments but will keep supporting portfolio companies.
- OpenView, which had 74 employees, has let go most of the employees from its investment team.
- The firm did not reveal the reason behind the dissolution. However, it could be a sign of the rising investor pressure to generate returns.
- Per documents seen by The Information, OpenView's 2020 fund had reported on-paper losses.
- The firm had raised funds worth $2.4B to date.
- Despite closing below its target, its most recent seventh fund was still 25% larger than its predecessor.
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| 5 | | Roadrunner Venture Studios, a company creation and VC firm backed by America's Frontier Fund and the New Mexico State Investment Council, has made its first startup investments. The firm has backed three startups: hydrogen production cleantech firm Hydrosonics, vaccine cold-chain logistics startup Inaedis, and AI-powered manufacturing company Fab.AI. More: - AFF president and COO Jordan Blashek, AFF general partner Steve Weinstein, and ICON co-founder Evan Loomis are the board members of Roadrunner.
- Schmidt Futures' former managing director, Adam Hammer, co-founded Roadrunner.
- Roadrunner CEO Gilman Louie said, "AFF is proud that Roadrunner Venture Studios was our first investment. By creating companies in critical technologies, Roadrunner is ushering in a new wave of American innovation and ecosystem building that will benefit not only New Mexico but also the greater U.S. economy."
Zoom out: - AFF, backed by Peter Thiel, Eric Schmidt, and Sam Palmisano, is a non-profit investment platform aimed at increasing U.S. innovation and manufacturing to solidify the nation's geopolitical position.
- Thiel and Schmidt have invested in only the think tank side of AFF.
- The firm is raising a $500M fund, of which it received $100M from the state of New Mexico.
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| 6 | | Today's Funding: AI - AutogenAI, a British AI startup that uses ChatGPT to automate paperwork filing for public and private contracts, raised $39.5M in fresh funding from Salesforce.
Biotech - Precision immunomodulators and oncology medicines startup Odyssey Therapeutics bagged $101M in fresh funding. Ascenta Capital led the Series C round.
Energy - Small modular nuclear reactor and fuel technology startup X-Energy Reactor extended its Series C funding round with an additional $80M, bringing the total raised in the round to $235M. Ares Management Corp. and X-Energy's founder Kam Ghaffarian led the current round.
FoodTech - Food delivery platform Fantuan secured $40M in Series C funding led by Celtic House Asia and GrubMarket.
Healthcare - Nursing recruitment platform Nursa closed its Series B funding round at $80M. Drive Capital led the round, joined by Pelion Venture Partners and Kickstart Fund.
Robotics - Industrial infrastructure safety assessment robotics manufacturer Gecko Robotics extended its Series C round from last year by $100M from the U.S. Innovation Technology Fund and Founders Fund. The company received a post-money valuation of $633M at the recent round.
Semiconductor - European flexible integrated circuit manufacturer Pragmatic Semiconductor held the first close of its Series D funding round at £162M ($206M). M&G's Catalyst and U.K. Infrastructure Bank co-led the round, joined by Northern Gritstone, Latitude, MVolution Partners, British Patient Capital, Cambridge Innovation Capital, and Prosperity7 Ventures.
Transportation - Autonomous vehicle system verification and validation company Foretellix bagged $85M in Series C funding led by 83North. Temasek, Isuzu, Woven Capital, Nvidia, Volvo Group VC, Jump Capital, Next Gear Ventures, and OurCrowd participated in the round.
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| 7 | | Quick Hits: - The Kubernetes Cookbook is your comprehensive companion, equipping you with the knowledge and techniques to harness the full potential of Kubernetes.*
- Per The Information, AI software and storage startup Vast Data has raised fresh funding at a valuation of $9B, more than double its previous valuation of $3.7B in 2021. Fidelity Investments is reportedly leading the round with additional support from NEA and Bond.
- Sequoia Capital's partner Luciana Lixandru joined portfolio company Stripe's board of directors, filling in the seat vacated by longtime Sequoia partner Michael Moritz.
- Goldman Sachs-backed buy-now-pay-later startup ZestMoney is shutting down after failing to find a buyer. Earlier this year, founders quit the firm after acquisition talks with PhonePe fell through.
- Toast to 2024: Key affiliate marketing trends to help your campaigns start off on the right foot in the new year. Get the free report.*
*This is sponsored content. | | | |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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