| |
| Here's a look at today's VC briefing. - 🚀 Median fund sizes surged in 2023 despite challenging fundraising environment
- 📉 VC funding for cybersecurity startups continued its downward spiral in 2023
- 💵 Microsoft allocated $275M to its VC arm this year
Thank you. Karan
p/karan-chafekar | |
| 1 | | Median fund sizes in the U.S. increased by 44% YoY in 2023, despite a 62% YoY drop in the overall funds raised by VC firms, per Pitchbook-NVCA Venture Monitor. The median fund size increased from $26M in 2022 to $37.4M in 2023. The surge in fund size is noteworthy given that the fundraising timeline also increased in 2023, widening to a decade-high of 15 months. More: - At the seed stage, deal sizes remained relatively steady at $3M, and the median valuations rose from $11M in 2022 to $12M in 2023.
- The WSJ cites the relatively stable environment for seed-stage startups as one of the main reasons for the surge in median fund sizes, giving investors confidence to keep funding early-stage funds.
- Another argument is that firms may have extended investment periods for new funds, justifying the higher capital raised from investors.
Zoom out: - U.S. VC firms raised 474 funds worth $66.9B in 2023, which is about a third of the total funds raised in 2022.
- The VC dry powder available in the U.S. reached a record high of $302.8B at the end of 2023.
|     | |
| 2 | | Cybersecurity startups raised $1.6B in VC funding in Q4 2023, pushing the entire year's total to $8.2B, per Crunchbase. 
What the numbers say: VC funding for cybersecurity startups continued on its downward trajectory in Q4, making it the lowest quarterly total on record since Q3 2018. Similarly, 2023's tally was the lowest since 2018. The amount raised in 2023 was about half compared to the $16.3B raised in 2022. Relevance: Only three deals closed above the $100M mark in 2023: BlueVoyant's $140M Series E, Island's $100M Series C, and Verkada's $100M funding rounds. Where to see the impact: Cybersecurity startups are still struggling to grow into their previous inflated valuations from 2021. Startups that raised funding in 2021 or earlier will likely reach the end of their cash runway in 2024 and may have to enter the market for follow-on funding rounds. Companies unable to ink funding deals may be forced to look at sale options. | | | |
| A message from our sponsor, Buzzboard. |  | | If you sell to small, local and mid-sized businesses, you need our AI-powered sales platform!
BuzzBoard Ignite makes selling to SMBs more impactful. Our platform uses your product data, generative AI, and our exhaustive SMB database to create bespoke prospecting e-mails, conversation starters and more, to open new doors, win more customers and close bigger deals. Here are some of the most popular features our customers are using to close more deals with SMBs: - Identifying your best SMB leads: BuzzBoard surfaces your best prospects based on their digital maturity stage, so that your sales reps spend more time selling than researching.
- Creating e-mails that work: BuzzBoard automatically creates highly personalized prospecting e-mails for you!
- Competitive benchmarking: Present your prospective customers with compelling benchmark reports that show them how their competitors are growing to motivate them to action.
- Advertising spend: Prepare more on-point, more winning, proposals, by showing them what their spend is, and what it could be.
Sign up for a free trial today! Free Trial - No Credit Card Required | |
|
| 3 | | Microsoft allocated $275M to its venture capital arm, M12, from its balance sheet this fiscal year, two sources informed Fortune. The added investment comes as M12 moves away from its generalist focus to investing in startups that align closely with parent company Microsoft's strategic priorities, namely AI, cloud infrastructure, and cybersecurity. More: - The strategic shift is spearheaded by M12's corporate vice president and global head, Michelle Gonzalez, who joined the unit in 2021.
- M12 typically receives between $150M and $250M annually from Microsoft to invest in startups.
- Microsoft initially allocated $100M to the VC division annually when it started in 2016 under the Microsoft Ventures name.
- The firm has about 110 active investments in its portfolio, including Split.io and AI platform Typeface.ai.
| | | |
| 4 | | Executives from Harvard University's endowment met with prominent Silicon Valley VC firms who were upset over the university's weak response to antisemitic campus incidents under former Harvard president Claudine Gay. VC firms have pushed the $51B endowment to address the concerns that could affect their relationship with investors. The endowment's executives met with Sequoia Capital, Kleiner Perkins, and Andreessen Horowitz. In addition, the firm also met up with investors Elad Gil and Patrick Collison. More: - The endowment's chair and member of Harvard Corporation, Paul Finnegan, also attended some of the meetings, highlighting the importance that Harvard places on VC.
- Harvard spokesperson Patrick McKiernan said, "It is important to engage with our partners and share with them all of the ways that Harvard is actively working to ensure student safety and protect freedom of speech."
- Gay resigned after backlash over her handling of the news of attacks on Israel and failure to condemn hate on campus.
- The uproar against Gay was led by Apollo's Marc Rowan and Pershing Square's Bill Ackman.
- Her resignation has already eased the concerns of some of the investors.
| | | |
| A message from our sponsor, Percent. |  | | Invest in the $1.9 trillion asset class of private credit Private credit is a booming industry, and for good reason. Offering diversification from market volatility, defense against inflation, and high yielding opportunities, private credit is a fast growing investment alternative in today’s economy. With private credit, accredited investors can diversify their portfolios and potentially earn higher returns than with traditional assets. Hedge funds, private and public pensions, and institutional investors are already doing it—now you can too, with Percent. Bringing exclusive private credit deals to thousands of investors, Percent: - Helps to diversify portfolios, with deals in small business loans, consumer lending, real estate, and more
- Allows investors to regularly re-evaluate and re-calibrate shorter-term investments to meet portfolio needs
- Provides a recurring income with cash flow until maturity
Sign up today and receive a $500 bonus on your first investment. Learn More | |
|
| 5 | | San Francisco-based VC and PE firm Top Tier Capital raised $1.05B in capital to be distributed across its Fund X, single-investor funds, and separate accounts. The funds will be used to invest in global VC funds, especially in Europe, the Middle East, and Asia. The company also makes direct investments in startups alongside select managers. More: - The firm has backed 400 funds to date, including ones launched by Andreessen Horowitz, Mayfield Ventures, and Creandum.
- Top Tier Capital has an indirect exposure to about 16,000 startups across the biotech, SaaS, Web3, and AI sectors.
- Notable startups backed by the firm recently include parcel robotics startup Plus One, freelance financial experts marketplace Paro, and AI-powered wearable technology maker Ai Pin.
- The firm has about $8B worth of assets under management and has raised 12 funds worth $3.7B from limited partners.
- SVB Capital's former managing partner, Jonathan Biggs, joined the firm as an investment partner.
| | | |
| 6 | | Today's Funding: Battery - Lithium-ion battery cell maker International Battery Company raised $35M in pre-Series A funding led by RTP Global, with participation from Beenext, Veda VC, and other investors.
Biotech - Ratio Therapeutics, a startup developing radiopharmaceuticals for the treatment of cancers, closed its Series B funding round at $50M. Schusterman, Duquesne, PagsGroup, and Bristol Myers Squibb participated in the funding round.
Fintech - Payments infrastructure startup Pomelo closed its Series B funding round at $40M. Kaszek led the round, joined by Index Ventures, S32, TQ Ventures, and Endeavor Catalyst. Pomelo will use the fresh capital to double down on Brazil, Mexico, and Colombia.
Gaming - Scottish game development studio Build a Rocket Boy secured $110M in Series D funding led by RedBird Capital Partners. NetEase Games, Galaxy Interactive, Endeavor, Alignment Growth, Woodline Partners, and GTAM Partners participated in the round.
Healthcare - Forta, a healthcare services startup that leverages AI to offer care programs, bagged $55M in Series A funding led by Insight Partners. The round saw participation from Exor Ventures, Alumni Ventures, 23&Me, Curative, Flexport, Warby Parker, Allbirds, and others.
| | | |
| 7 | | Quick Hits: - Enhance multichannel personalization efforts to build customer loyalty. Learn to master true personalization with the help of AI.*
- VC firm General Catalyst signed a non-binding letter of intent to acquire the non-profit health system Summa Health. Summa Health will be housed under General Catalyst's new firm, Health Assurance Transformation Corp. (HATCo.), with plans in place to convert it into a for-profit entity. While the exact financial details were not disclosed, General Catalyst planned on spending $1B to $3B on the transaction, per a previous report.
- Israeli VC firm Cardumen Capital raised $120M for its second deep tech fund. The firm will back early-stage startups working in the fields of AI, cybersecurity, big data, and information technology. With the new fund, the firm's assets under management have reached $225M.
- Early-stage VC firm Act One Ventures secured $73M in capital commitments for its third fund, which aims to back business software startups at the seed stage. Initial check sizes will range from $1M to $2M.
- German VC firm Acton Capital promoted Julius Luehr to the partner role. Prior to joining Acton, Leuhr worked with Rocket Internet, Axel Springer, Cavalry Ventures, and Northzone. He worked his way up at Acton after joining the firm as an analyst in 2018.
*This is sponsored content. | | | |
| Upcoming Events | | MAR
7 | | Alternative investment assets to know in 2024. | | | | | | * This is a sponsored event | | | |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
| |
| |
|
 | Complete your investment strategies with Percent today. | |
|
| |
Comments
Post a Comment