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| Here's a look at today's VC briefing. - ✍🏼 Menlo Ventures created an SPV to invest in Anthropic
- 🇺🇸 Pentagon recognizes the need for VC funding to revive its industrial base
- 🌏 VC funding for Asian startups slumped 38% YoY in 2023
We have also rounded up the top late-stage funding rounds of this week. Thank you. Karan
p/karan-chafekar | |
| 1 | | Menlo Ventures established an SPV under the name of Menlo Inflection AI Partners to double down its position in generative AI startup Anthropic. The firm plans to invest a total of $750M into Anthropic, with $250M coming from its own funds and insiders and the remaining $500M from other investors participating in the SPV. More: - Menlo's decision to set up an SPV comes from limits on how much funding a VC can invest from a fund into a single company.
- Despite raising funds worth $1.35B last November, Menlo couldn't have funded the entire $750M round as VCs can only invest between 10% and 15% of a fund into one company.
- The power move allows it to not only double down on Anthropic but also position the company as a broker in the deal, which could help it gain additional income in the form of fees and carry interest charged to limited partners in the SPV.
- On the other hand, with Menlo handling the fundraising, Anthropic is free to focus its efforts on scaling its company and further developing its AI platform.
- The new funding could potentially quadruple Anthropic's valuation to $18.4B.
Zoom out: - Anthropic and rival OpenAI took advantage of last year's AI frenzy to raise billions of dollars.
- Claude generative AI program maker Anthropic received capital commitments worth $4B from Amazon and $2B from Google.
- Amazon initially deployed $1.25B last September in the form of a convertible note, with the option to invest the remaining $2.75B this year.
- Google transferred $500M to Anthropic and has options on two $750M tranches contingent upon the firm achieving certain milestones.
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| 2 | | VCs deployed $527.8M in late-stage and beyond global startups this week between Jan. 6 and Jan. 12, per Crunchbase data. Biotech startups raked in 33% of the funding this week. Automotive, analytics, and augmented reality startups nabbed 21%, 14%, and 13% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Jixing Pharmaceuticals, a Chinese startup developing medicines for cardiovascular diseases and ophthalmology, raised a $162M Series D round. RTW Investments provided $127M of the funding, and Bayer provided the remaining $35M.
- Car subscription provider FINN closed its Series C funding round at €100M ($109.7M), valuing the firm upwards of $600M. Planet First Partners led the round, with additional support from HV Capital, Korelya Capital, UVC Partners, White Star Capital, and Picus Capital.
- Chinese augmented reality headset maker Rokid raised $70M (500M yuan) in fresh funding led by the government of Hefei City.
- Impact Analytics, an AI-powered planning and merchandising solution for retail, grocery, CPG, and supply chain industries, raised $40M in fresh funding led by Sageview Capital, with additional support from Vistara Growth.
- London-based energy analytics company Vortexa has raised $34M in a Series C funding round led by Morgan Stanley Expansion Capital.
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| 3 | | The Pentagon acknowledged the urgent need for VC funding and new innovative ideas to reestablish the U.S. as a global industrial powerhouse. The U.S. claims it has fallen behind China, which has surpassed not just the U.S. but also its European and Asian allies in key areas such as shipbuilding, critical minerals, and microelectronics. More: - The defense sector requires the injection of fresh VC capital as many old contractors have yet to adopt advanced manufacturing technologies, which are critical in maintaining a competitive edge.
- The lack of newer technologies "directly impacts DoD's ability to reduce manufacturing lead times and life cycle costs and to increase readiness," per the new National Defense Industrial Strategy published on Thursday.
- The Pentagon is currently grappling with challenges in replenishing weapons stocks, slow development of highly maneuverable hypersonic weapons, and a lack of participation from entrepreneurs in defense contracting.
- The strategy document calls on the American academia, research labs, manufacturing centers of excellence, and finance streams, especially private equity and venture capital, to come together to increase the nation's defense technological supremacy.
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| 4 | | Asian startups raised $78.1B in VC funding in 2023, down 38% compared to 2022's tally of $125.2B, per Crunchbase. Funding more than halved compared to the record high of $187.4B from 2021. Asian VC funding continued its downward trajectory in Q4, ending the last three-month period of 2023 with only $15.6B, the lowest quarterly total on record since Q4 2015. More: - Seed, early, and late-stage funding dipped by 34%, 47%, and 30%, respectively.
- Seed-stage startups bagged $6.5B, with $27.9B going to early-stage startups and $43.7B to late-stage startups.
- The biggest rounds closed this year include Singaporean online shopping platform Lazada Group's $634M corporate round, Saudi Arabian shopping and payments platform Tamara's $340M Series C, and Indian B2B trade platform Udaan's $340M Series A rounds.
- China's VC funding nearly halved in Q4, while Israel saw a 66% drop in VC funding in the same period.
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| 5 | | Israeli VC firm Vintage Investment Partners secured capital commitments worth $200M for its 16th fund, higher than its initial target of $175M. The fund will invest in between 15 and 20 growth-stage technology startups across Israel, the U.S., and Europe. More: - The new fund pushes Vintage's assets under management over the $4B mark.
- In addition to backing startups directly, the firm also invests in funds launched by other VC firms, including Andreessen Horowitz, Accel, and General Catalyst.
- Notable startups backed by the firm include cybersecurity firm SentinelOne and food delivery startup Wolt.
- The firm is currently deploying from the $632M Vintage fund of funds and the $312M secondary fund.
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| 6 | | Today's Funding: Blockchain - Blockchain-based digital trade document platform WaveBL extended its Series B round to $37M by adding another $11M funding provided by ZIM, Contour Venture Partners, Frank Sica, Techstars, Reefknot Investments, and Kuehne + Nagel.
E-commerce - E-commerce returns processing platform Sway, formerly known as Returnmates, secured $19.5M in Series A funding led by 7GC. Blackhorn Ventures, Lightshed Ventures, and Rise of the Rest Revolution participated in the round.
Healthcare - Primary and specialty care clinic group Harbor Health extended its Series A funding round with an additional $95.5M funding led by General Catalyst. Alta Partners, 8VC, Health 2047 Capital Partners, Lemhi Ventures, and Martin Ventures participated in the round.
- Smart hospital platform Artisight Inc. raised $42M in Series B funding from investors, including chipmaker NVIDIA.
Proptech - Canadian home ownership proptech startup Requity Homes raised $26M in equity and debt financing co-led by Highline Beta and angel investor Sam Sun.
Robotics - Norwegian AI and robotics startup 1X, formerly known as Halodi Robotics, closed its Series B round at $100M. EQT Ventures led the round with additional backing from Sandwater, Skagerak Capital, Samsung NEXT, and Nistad Group.
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- Climate-focused VC firm Carbon13 held the first close of its debut €30M ($32.9M) fund.
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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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