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| Here's a look at today's VC briefing. - 📉 Tiger Global slowed dealmaking by 90% compared to 2022
- 👥 VCs tap into their network to offer extension rounds
- 🇨🇳 China's proposed rule change to triple the investment threshold draws backlash from PE and VC funds
We interviewed Jesse Draper, the founding partner of Halogen Ventures. She is a fierce advocate for investing in women and the opportunity for using technology and innovation to solve some of the biggest issues facing women and families today. You can read her interview here. Thank you. Karan
p/karan-chafekar | |
| 1 | | Tiger Global has participated in just 27 VC deals worth less than $2B so far this year, per Crunchbase. The firm has slowed its dealmaking pace by 90% compared to the 288 deals worth $23.2B that Tiger Global took part in 2022. More: - Tiger Global participated in just one deal in Q4.
- The largest deal that Tiger Global participated in this year was Databricks' $500M Series I round led by T. Rowe Price Associates.
- The largest deal led by Tiger Global this year is a $61M Series B round into Brazilian fintech startup Nomad.
- Tiger Global has been significantly impacted by the venture funding pullback.
- The firm has lowered the fundraising target for its latest fund by $8B to $5B.
- Additionally, Scott Shleifer stepped down from the head of private investments role and will transition to a senior advisor position starting January next year.
- Due to the valuation markdowns of portfolio startups, Tiger Global's flagship PIP 15 fund had on-paper losses of 18% at the end of September.
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| 2 | | VCs are tapping into their network of investors to offer extension rounds to portfolio startups, per the WSJ. 
What happened: Amid a challenging fundraising landscape where startups are reluctant to accept reduced valuations in down rounds, extension rounds emerge as a favorable compromise. They enable startups to maintain their previous valuations and retain the same investor base. Some extension rounds have a slight premium over the last round. Since terms in the extension rounds are mostly unchanged, the administrative process is much faster than traditional fundraising. Additionally, extension rounds often happen without the standard fundraising pitches. What the numbers say: Per Pitchbook, about 7,000 extension rounds have been completed so far this year. In comparison, there were 8,699 extension rounds in 2022 and 8,539 in 2021. Where to see the impact: Larger multi-stage investors have slowed down their investment in the pre-seed stages. As a result, startups are turning to emerging fund managers, who typically write smaller checks than larger institutional investors. These emerging fund managers are more likely to collaborate with fellow investors to support portfolio startups. | | | |
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| 3 | | The China Securities Regulatory Commission (CSRC) published draft rules on Friday that tripled the investment threshold for qualified investors investing in VC and PE funds. The proposed regulations have received pushback from the industry, arguing that the rules will wipe out small VC funds that rely on backing from family members and friends, unlike larger firms that raise capital from institutional funds. Industry experts believe the rules will have the exact opposite effect than CSRC's intent to protect small investors. More: - Per the proposed rules, qualified investors must invest at least $418,731 (3M yuan) in PE and VC funds.
- Meanwhile, the investment threshold for investing in funds that invest most of their capital in a particular project or company has been increased tenfold to $1.4M (10M yuan).
- In the first nine months of 2023, PE and VC fundraising slumped 20% due to economic instability and volatile stock market prices, both of which have reduced investors' appetite for risky investments.
- Venture capitalist and Beijing Potential Shares Technology Co's co-founder Li Gangqiang argues that the rules are "extremely unfair to single-project fund managers ... and to small investors."
- Should the rules be implemented, Gangqiang expects at least 1,000 private fund management firms to shut down operations.
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| 4 | | Omidyar Network, an impact venture firm backed by eBay founder Peter Omidyar, is pulling out of the Indian market and shutting down operations in the nation, sources informed TechCrunch. The firm said the decision was "heavily informed by the significant change in context and the growth in the economic landscape that the India-based team has experienced since first making investments there in 2010." The move comes a year after India's Central Bureau of Investigation started investigating Omidyar Network and nine other NGOs for allegedly violating the nation's Foreign Contribution Regulation Act. More: - The firm has backed 120 South Asian startups over the past 13 years, of which it made five new investments in India in the past two months.
- Notable portfolio startups include 1mg, Vedantu, DealShare, Doubtnut, HealthKart, M2P, and Pratipli.
- The Indian portfolio had a cumulative value of $673M at the end of July.
- Omidyar Network's board and leadership team will be accessing ways to support existing portfolio startups over the next two months.
- A source close to the matter said that the Indian team is potentially looking into creating a new entity and starting a fresh fund. However, the source cautioned that the plans are still in the early stages and could change or be scrapped entirely.
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| 5 | | South Korean internet giant Kakao has promoted Shina Chung, who heads its corporate venture capital arm, to the CEO role. Chung's appointment to the top role comes as the firm is embroiled in multiple investigations over antitrust and securities violations. More: - Kakao's chief investment officer, Jae-Hyun Bae, was arrested in October for allegedly manipulating stock prices after acquiring K-pop agency SM Entertainment.
- If convicted of the charges, the firm could be forced to sell at least a 10% stake in its online banking unit, Kakao Bank.
- Since joining Kakao Ventures in 2014, Chung has backed startups across AI, robotics, mobile business platforms, gaming, and digital healthcare sectors.
- Chung, poised to become Kakao's first female CEO, has vowed to demonstrate "proactive and responsible" leadership and steer the tech company through the crisis.
- She will be formally confirmed as the CEO after a board and general stakeholders meeting in March.
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| 6 | | Today's Funding: Biotech - AI-powered robotically-assisted imaging solutions developer Laza Medical secured $36M capital from investors. The Series A round was led by The Capital Partnership, with additional support from GE Healthcare, PA MedTech VC fund, Unorthodox Ventures, and Dara Holdings.
Cleantech - Sustainable aviation fuel and carbon emissions-derived materials producer Dimensional Energy closed its Series A funding round at $20M. Envisioning Partners led the round, joined by United Airlines' Sustainable Flight Fund, Microsoft's Climate Innovation Fund, DSC Investment, New York Ventures, Climate Tech Circle, Elemental Excelerator, Launch New York, and others.
Fintech - Debt crowdfunding platform Lendo bagged a $28M (SAR 105M) Series B funding round led by Sanabil Investments, with participation from Shorooq Partners, AB Ventures, and others.
SpaceTech - Space threat reconnaissance systems maker True Anomaly Inc. raised $100M in Series B funding led by Riot Ventures. Eclipse Ventures, ACME Capital, and Menlo Ventures participated in the funding round.
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| 7 | | Quick Hits: - Want to master Kubernetes? The Kubernetes Cookbook is a must-have guide to discover guidance on cloud architecture analytics, optimization, governance, and more.*
- Pet food startup The Farmer's Dog has roped in JPMorgan to assist with the fundraising, which is set to start by early next year. The firm is expecting a valuation higher than its previous figure of $2.5B.
- LINE NEXT Corp. secured $140M in capital commitments towards its new fund from a consortium led by Crescendo Equity Partners, the VC firm backed by Peter Thiel.
- Legal AI software startup Harvey is looking to raise between $70M and $80M in fresh funding, which is reportedly being co-led by existing investors Kleiner Perkins and Elad Gil. The firm is looking to quadruple its valuation to about $700M at the round.
- Bestselling book on alternative investing offers the first chapter free for a limited time. "Money Shackles" innovates the way you think about money.*
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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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