| Here's a look at today's VC briefing. - 🦄 Pitchbook analyst expects new unicorns to emerge in the generative AI orchestration sector
- 🚀 AI, insurtech, semiconductor, and battery tech sectors defied VC funding slump in 2023
- 💊 Massachusetts biopharma startups raked in a larger share of VC funding in 2023
We have also rounded up the top late-stage funding rounds of this week. Thank you. Karan
p/karan-chafekar | |
| 1 | | Pitchbook senior analyst Brendan Burke predicts several unicorn startups will emerge in the open-source generative AI orchestration domain, most of which will cross the $1B+ valuation mark in early-stage deals. Burke's prediction is based on the fact that generative AI orchestration is gaining importance as more and more organizations start integrating AI models into their businesses. More: - Orchestration platforms can help organizations choose suitable AI models, integrate multiple LLMs, and deploy them cheaply.
- Organizations are taking the help of orchestration startups as it can help them save costs and time in building a dedicated data science team.
- One such orchestration startup, Anyscale, cemented its unicorn status in 2022 with a $199M Series C funding round.
- Anyscale is backed by Andreessen Horowitz, NEA, and Intel Capital.
- Notable funding rounds that closed that raised funding last year include Weight & Biases' $50M round from August, Pinecone's $100M in April, and Essential AI's $57M round from December.
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| 2 | | VCs deployed $319.5M in late-stage and beyond global startups this week between Jan. 1 and Jan. 5, per Crunchbase data. Biotech startups raked in 44% of the funding this week. Healthcare, cybersecurity, and e-commerce startups nabbed 20%, 19%, and 10% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Nalu Medical Inc., a healthcare startup developing minimally invasive and non-opioid solutions for chronic neuropathic pain, raised $65M in fresh funding led by Novo Holdings. Existing investors Gilde Healthcare, MVM Partners, Endeavor Vision, Decheng Capital, Longitude Capital, Advent Life Sciences, and others participated in the round.
- Chinese generic drug technology firm Weikaier Pharmaceutical Technology closed its Series C round at ~$63M (450M yuan). China Life Equity, Deyi Capital, Hongyao Science and Technology, Nanjing Innovation Investment Group, and Hangzhou Huadian Investment provided the funding.
- Cloud-native cybersecurity startup Aqua Security retained its unicorn status by extending its previous $135M Series E funding by another $60M. Evolution Equity Partners led the extension round, with additional support from existing backers Lightspeed Venture Partners, Insight Partners, and StepStone Group.
- ENYO Pharma, a French biotech startup developing therapeutics for renal and kidney diseases, raised €39M ($42.64M) in Series C funding co-led by OrbiMed and Morningside Ventures. Existing investors AndEra Partner, Bpifrance InnoBio, and Bpifrance Large Ventures participated in the round.
- Biopharmaceutical company Apollo Therapeutics added $33.5M to its Series C round at its second close, bringing the total raised under the round to $260M. Patient Square Capital led the latest round, with M&G plc and Rock Springs Capital participating.
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| 3 | | The AI, insurtech, semiconductor, and battery tech sectors were a few industries that defied the global VC funding slump in 2023, per Crunchbase. The largest year-on-year increase was seen in the AI sector, which saw a 9% jump from $45.8B in 2022 to around $50B in 2023. More: - The majority of the funding was scooped up by foundational model companies, such as OpenAI, Anthropic, and Inflection AI, which collectively raised $18B in 2023.
- The manufacturing and cleantech sectors suffered declines of less than 20%, which was better than the overall slump seen across all the sectors.
- Web3 sector witnessed the largest decline, falling 73% from $28B in 2022 to $7.6B in 2023.
- Other sectors that also saw significant declines in VC funding include media and entertainment (down 64%), e-commerce (down 60%), and financial services (down 50%).
Zoom out: - Global VC funding saw a 38% decline from $462B in 2022 to $285B in 2023.
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| 4 | | Massachusetts-based biopharma companies bagged a larger share of VC funding in 2023 despite the challenging fundraising environment. The region's startup took away 31% of the total VC invested in the sector, increasing its share by 6% compared to the previous year. Massachusetts-based startups ended the year with $7.67B in VC funding. More: - Massachusetts' growing prominence in the biotech and healthcare industry is due to the presence of a high number of biotech and pharmaceutical companies, investors, and universities.
- Despite increasing the VC funding share, funding was still lower than the record high of $13.66B set in 2021.
- In 2023, 33% of the funding went to oncology-focused R&D startups, with startups working on therapies for the central nervous system and anti-infectives taking 17% and 12% of the financing, respectively.
- Only two startups in the region, namely Apogee Therapeutics and Neumora Therapeutics, made their public debuts last year.
- On the other hand, M&A transactions involving Massachusetts startups increased from 26 in 2022 to 38 in 2023.
- M&A transaction value doubled from $5.89B in 2022 to $13.04B in 2023.
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| 5 | | Exponent Founders Capital secured $75M in capital commitments toward its second fund. The firm has worked in stealth mode until today and previously raised a $50M fund in November 2021. The firm intends to invest in enterprise software, fintech, payments, infrastructure, applied AI, and vertical SaaS early-stage startups across the U.S., Canada, and Europe. More: - Limited partners that have invested in Exponent's latest fund include Carnegie Mellon University, Cook Children's Health Care System, LGT Capital Partners, and Next Legacy Partners.
- Exponent invested in 40 startups from Fund I, the most notable of which were sales intelligence platform Apollo.io, observability platform Chronosphere, legal tech startup EvenUp, and software startup Tactic.
- The firm exited Tactic after it was acquired by TaxBit earlier this year.
- The firm aims to back 20 to 30 startups with the latest fund, taking about 5% to 10% ownership in firms by investing anywhere between $500,000 and $5M.
- 75% of the fund's capital is earmarked for new investments, with the remaining set aside for follow-on funding rounds.
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| 6 | | Today's Funding: AI - IVP led a $73.6M funding round into AI-powered conversational search engine startup Perplexity AI at a valuation of $520M. NEA, NVIDIA, Bessemer Venture Partners, and Amazon's founder Jeff Bezos participated in the funding round.
Biotech - Human Immunology Biosciences (HI-Bio), a San Francisco-based startup that is developing therapies for immune-related diseases, closed its Series B funding round at $95M. Alpha Wave Global led the round, with additional backing from Viking Global Investors, Arkin Bio Capital, Jeito Capital, and ARCH Venture Partners.
- Global radiotherapeutics startup Full-Life Technologies raised a $63.3M funding round, consisting of $47.3 in Series B equity and $16M in debt. Prosperity7 Ventures and another unnamed healthcare investor co-led the round, joined by Sky9 Capital, Summer Capital, Chengwei Capital, HongShan, and Junson Capital.
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| 7 | | Quick Hits: - Need to close more deals faster? See 6 tips on how Calendly helps sales & marketing teams automate the meeting lifecycle and grow revenue. Read the blog.*
- Peak XV Partners-backed Indian payments fintech startup MobiKwik is looking to raise about $84.2M from its upcoming IPO listing. MobiKwik initially planned to go public in 2021 and had set a target of raising $250M at the IPO debut but postponed plans after market conditions worsened.
- Global cosmetics company Shiseido launched its VC division dubbed Shiseido Long Term Investments for the Future (LIFT) Ventures. The fund will support startups developing novel technologies and new business models in the beauty wellness space.
- Chinese VC firm Riched Capital secured $140.8M (1B yuan) in capital commitments towards its fifth flagship fund against a target of $281.6M (2B yuan).
- Utah-based VC firm Tandem Ventures announced the first close of its debut fund at $20M. The firm intends to reach its target of $30M before the final close of the fund.
- Stanford Byers Center for Biodesign's co-founder and director, Dr. Joshua Makower, joined European life sciences VC firm Sofinnova Partners as an advisory venture partner.
*This is sponsored content. | | | |
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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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