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| Here's a look at today's VC briefing. - ⛰️ VC activity will reach a new peak in the next five years, per Coller Capital's survey
- 🇯🇵 Investors looking to diversify from China turn to Japan
- 🤝 PursueCare raises $20M, acquires assets of bankrupt firm Pear Therapeutics
Thank you. Karan
p/karan-chafekar | |
| 1 | | Limited partners that have invested in venture funds are turning to secondary markets to liquidate their holdings. In the first half of 2023, 14% of the total secondary sales consisted of VC and growth strategy fund stakes being liquidated by LPs. More: - Industry Ventures and StepStone Group scooped up a 12% stake in Group 11's second fund from existing investors for $20M.
- Group 11's sole general partner, Dovi Frances, said, "You are giving your investors the options to exit if they wish. It gives you the appreciation of your investors and the time you need to realize the returns. No one will pressure you."
- Group 11 had closed its second fund at $41.4M in 2015.
- LPs received a roughly 20% net rate of return after liquidating their stakes in Group 11's second fund.
Zoom out: - Secondary investors are raising dedicated funds to scoop up stakes from LPs and have already raised funds worth $68.1B in the first nine months, up 18% over last year's totals.
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| 2 | | Limited partners looking to diversify their investment away from China are turning to Japan. 
What the numbers say: In 2022, foreign investors participated in 54% of the Japanese VC deals, per Pitchbook. Between 2020 and 2022, 60% of the PE deals involved foreign investors. What happened: LPs have found Japan's private equity and venture capital market to be stable due to predictable government policies and a market that's primed for investment. As a result, Japan is expected to defy the global funding slump and will likely match its PE and VC deal counts of the past four years. The PE sector has already generated $22.6B in deal value so far this year, crossing the previous record high set in 2021. Japan's exit environment has also weathered global economic uncertainty, setting the record for the most active quarter in Q3 with 19 exits. However, the nation's PE and VC market is small compared to the U.S. and Europe, limiting the number of deals that can be done. Relevance: Due to the volatile relations between the U.S. and China, the global economic downturn, and China's crackdown on its tech industry, leading U.S. investors have pulled back their dealmaking in the nation. U.S. LP commitments to China-based PE funds slumped 56.4% from 2019 to 2022. | | | |
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| 3 | | New York- and San Francisco-based VC firm BoxGroup secured $425M in capital for two new funds. The capital is divided equally between two funds: a pre-seed and seed stage BoxGroup Six fund and a third opportunity fund, BoxGroup Picks. More: - Ramp, Warp, Hex, Solugen, Arcadia, Coast, Turquoise Health, and Backbone are the most notable startups within BoxGroup's portfolio.
- Although it is a generalist firm, it mostly backs startups across consumer enterprise, healthcare, financial, biotech, and climate sectors.
- BoxGroup last raised $225M for its fifth early-stage fund and second opportunity fund two years ago.
- With the new fund, the firm expects to invest in 40 to 50 startups, writing checks between $500,000 and $1M.
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| 4 | | 46% of North American institutional investors from Coller Capital's latest survey believe that VC activity will set a new record in the next three to five years. Their belief is supported by 56% of European investors and 45% of Asia-Pacific investors. More: - 44% of LPs expect allocations for private credit to increase over the next 12 months.
- With the advancements in AI tools and increased accessibility, several LPs believe that investors will integrate AI solutions over the next two to three years.
- Currently, 7% of respondents use AI for fund monitoring, 4% for competitor benchmarking, and 2% for investment decision-making.
- 60% of institutional investor respondents expect M&A activity in global private markets to increase over the next three to five years. On the contrary, 11% believe that M&A activity will fall.
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| 5 | | Substance use and behavioral health treatment startup PursueCare acquired assets from bankrupt addiction treatment biotech company Pear Therapeutics for an undisclosed sum. The asset acquisition news comes as PursueCare raised a $20M Series B round led by T.Rx Capital and Yamaha Motor Ventures. The firm will use a part of the proceeds to expand its hospital and healthcare system network to more states. It currently has a presence in 11 states. More: - PursueCare acquired the assets from a business entity backed by T.Rx Capital, which was co-founded by former Pear CEO Corey McCann and executive Michael Langer.
- Pear declared bankruptcy eight months ago after failing to secure contracts with insurance companies.
- PursueCare's CEO, Nicholas Mercadante, expects to be able to take advantage of the assets as the firm already has contracts with the largest insurance companies.
- The fresh funding round brings the firm's total funds raised to date to $35M.
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| 6 | | Today's Funding: AI - AI startup Delphina raked in $7.5M in fresh funding from Radical Ventures and Costanoa Ventures.
Biosecurity - CNS clinical program and mitochondrial therapeutics startups Vandria bagged $20.6M in Series A funding led by ND Capital.
Cybersecurity - Andalusia Labs, the digital asset risk management infrastructure firm formerly known as RiskHarbor, cemented its unicorn status with a $48M Series A round led by Lightspeed Venture Partners.
E-commerce - B2B e-commerce startup Udaan raised $340M in Series E funding led by British retail bank M&G's investment arm. Existing investors Lightspeed Venture Partners and DST Global participated in the round. Per sources, the round was a down round, which lowered the firm's valuation from its peak of $3.1B in 2021.
Proptech - Climate-neutral building renovation startup Ecoworks secured a Series A round worth €40M ($43.15M). World Fund led the round, joined by Haniel, KOMPAS VC, and ISAI.
Supply chain - Wholesale procurement platform Qogita emerged from stealth with a €80M ($86.3M) Series B round led by Dawn Capital. Series A lead investor Accel and seed round co-lead investors LocalGlobal and Bessemer Venture Partners 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.*
- Kleiner Perkins is reportedly leading a $200M funding round into Glean, a startup that uses OpenAI's large language model to search through companies' internal data. The firm is targeting a pre-money valuation of $2B.
- Asha Ventures secured $50M capital at the first close of its new fund, against a target of $100M.
- Alphabet's Google-backed VC firm GV hired former GitLab chief revenue officer Michael McBride as a general partner.
- Savvy billionaires are hedging their portfolios with farmland. New REIT goes public, and stock price increases 12.20% in its first quarter opening.*
*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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