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| Here's a look at today's VC briefing. - 💰 Sequoia distributed $10B to limited partners in 2023
- 👩🏻 Female co-founded startups raised $32.7B in VC funding in 2023
- 👥 Diversity initiatives within the VC industry have stalled
Thank you. Karan
p/karan-chafekar | |
| 1 | | Sequoia Capital distributed $10B to its limited partners in 2023, sources informed Business Insider. The distributions from 2023 bring the firm's total distributions over the past five years to over $42B. Sequoia, best known for backing Apple, Cisco Systems, PayPal, and YouTube, distributed returns to LPs despite facing heavy markdowns on several portfolio companies. More: - Limited partner Utimco, the $70B endowment behind the University of Texas and Texas A&M systems, initially committed $200M to Sequoia Capital Fund in 2022 before halving its commitment to $100M.
- By the end of May last year, the value of Utimco's commitment had already plummeted to $79M.
- Utimco received $12M in returns after the value of its stake surged slightly to $82M.
- Utimco's stake in Sequoia's 2020 U.S. growth fund had an IRR of -7.07% at the end of August last year.
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| 2 | | In 2023, VCs invested $32.7B in U.S. startups with at least one female founder, per Pitchbook. 
What the numbers say: Startups with only female founders raised $2.8B from 867 rounds. Female-only founded startups bagged a 2% share of the total capital, the lowest it has been since 2019. The share of total capital invested in startups with only female founders has hovered around the 2% mark in the last 15 years, reaching the peak of 2.8% in 2025. Meanwhile, startups with both female and male founders hit a record high in 2023, bagging 20.7% of the total funding. Startups with both female and male founders raised 33% more capital than in 2020 despite inking fewer deals. Relevance: The percentage of total capital allocated to female and male co-founded startups was higher in B2B services, pharmaceuticals, and biotech sectors. While 27% of the total capital in the B2B services sector went to mixed-founder startups, only 7% was invested in female-only founded startups. This discrepancy exists in almost all sectors but was less pronounced in the software sector, which allocated 27% to mixed founders and 22% to female-only startups. Thomson Reuters Ventures managing director Tamara Steffens said, "In legal and tax, two things we invest in, we see a lot more female founders than we would see in straight B2B SaaS at Microsoft." | | | |
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| 3 | | Initiatives to improve diversity in the VC industry have stalled, with programs like Diversity Rider losing momentum, per the WSJ. Act One Ventures launched the Diversity Rider initiative to include underrepresented co-investors in startup deals. The dip in diversity initiatives can be attributed to the challenging market conditions, fewer deals being closed, and changes to corporate and university diversity initiatives. More: - Despite the interest from institutional investors in fostering diversity, they are hesitant to invest in new funds.
- About 150 venture capital firms joined the Diversity Rider initiative between 2020 and 2021.
- Additionally, about 300 diverse individual investors expressed interest in investing in startup deals alongside institutional investors.
- "The whole macro environment over the last 18 months really put DEI on the back burner," said venture capitalist Sarah Smith.
Zoom out: - While the diversity initiatives have faced challenges, an upcoming California bill is looking to reverse the trend by forcing VC firms to disclose gender and racial data about the startups they are backing.
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| 4 | | Chinese startups raised $69.9B VC funding from 4,200 deals in 2023, per Bloomberg. Funding dipped by just 7% compared to the previous year, significantly better than the 44% YoY slump seen in 2022. More: - While the VC funding market recovered after a slump in 2022 due to China's stringent zero-Covid policy and the government's crackdown on the technology sector, the outlook for 2024 remains bleak given the rising youth unemployment and volatile regulatory environment.
- Additionally, foreign investors have lowered their capital deployment in China due to rising tensions with the U.S.
- Even funding for the AI sector in China declined by 10% in 2023.
- In contrast, AI remained a bright spot for investment in the U.S., where overall funding declined by 40% in 2023.
- Future Capital's managing director Murong Yang said, "People are also very cautious because it's really hard to see what sector would work and what wouldn't given fluctuations in capital markets."
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| 5 | | Arizona-based startups raised $1.26B in funding from 139 rounds throughout 2023, of which $232.5M came in from the fourth quarter, per Business Journals. In Q4 2023, Phoenix-based startups raked in 96% of the total funding deployed in the state, or about $223.4M from 25 rounds. More: - Arizona's funding nearly halved in Q4 compared to the $458.2M raised in the same period in 2022.
- Telecommunications startup Mangata Networks raised the largest round in Q4 2023 through its $115M deal.
- Arizona's funding slump mimics the VC funding drought seen across the country.
- Information technology, transportation, clean energy, health, and financial technology sectors raked in the state's top investments.
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| 6 | | Today's Funding: Battery - OP Finland Infrastructure LP and the Finnish Climate Fund led a €26M ($28.5M) funding round into battery energy storage startup Cactos.
Biotech - Novel oral neurorestorative therapies developer Myrobalan Therapeutics closed its Series A funding round at $24M led by Co-win Ventures. Guan Zi Equity Investment, 3E Bioventures Capital, and AB Magnitude Ventures Group participated in the funding round.
- Dental surgical robotics maker Neocis received $20M in additional funding from Mirae Asset Capital and NVIDIA's venture arm, NVentures.
E-commerce - Dutch online supermarket Picnic bagged €355M ($389M) in fresh funding from Edeka, the Bill & Melinda Gates Foundation Trust, and Dutch family businesses.
Insurtech - Insurance startup Hyperexponential raised a $73M Series B funding round. Battery Ventures led the round, joined by Andreessen Horowitz and Highland Europe.
Software - 120Water, a startup providing compliance management solutions for the water industry, secured a $43M funding round led by Edison Partners.
Transportation - 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.
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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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