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| Here's a look at today's VC briefing. - 🇦🇪 UAE-based fintech startups defied the global VC funding slump
- 🌍 Europe claimed a higher share of global funding despite slumping 39% YoY
- ✍ SVB Financial plans to hand over its VC division to a new creditor-backed company
Thank you. Karan
p/karan-chafekar | |
| 1 | | VC funding deployed in UAE-based fintech startups increased by 92% thanks to the region's friendly regulations and the higher adoption rate of digital banking tools. Local fintechs defied the global VC funding slump for fintech startups. Global fintech funding sunk by 48% YoY from $99B in 2022 to $51.2B in 2023, per data from Innovate Finance. More: - UAE's funding bump helped it make the top 10 list in 2023.
- The U.S. fintech industry still held the top spot in the rankings, raking in $24B of the total funding, albeit 44% less than the previous year.
- U.K.-based fintechs raised $5.1B of funding in 2023, giving it the honor of being the second-largest hub for fintech investment.
- Funding still dropped 63% compared to $13.9B in 2022.
- Female-led startups bagged $536M, or 10.5% of the total VC funding deployed in the U.K. fintech sector in 2023.
- India, Singapore, and China held the third, fourth, and fifth spots in the standings, ending the year with $2.5B, $2.2B, and $1.8B, respectively.
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| 2 | | European startup investment plunged by 39% YoY to $52B in 2023, per Crunchbase. Despite the dip in investments, Europe claimed a higher share of the global funding than in 2021. 
What the numbers say: The funding slump impacted late-stage startups the most, where funding halved compared to last year. Meanwhile, early-stage and seed-stage funding dropped by 30% YoY. Europe fared better compared to the North American and Asia markets. Relevance: European startups raised $10.6B in the last quarter of 2023, down 35% QoQ and 23% YoY. Late-stage startups raked in $4B funding in Q4 2023, the lowest since Q3 2023. Meanwhile, early-stage funding remained flat year-on-year and quarter-on-quarter in Q4, ending the last three months of the year with $5B. The remaining $1.6B went to seed startups. Where to see the impact: AI startups scooped up $5.8B in total funding. Notable regional AI startups that raised funding in 2023 include Aleph Alpha, Mistral AI, Poolside, DeepL, and Synthesia. Europe has demonstrated its strength in talent and cutting-edge domains and is set to play a pivotal role in leading development in fintech, healthcare, and hardware domains. | | | |
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| 3 | | SVB Financial, the bankrupt parent company of Silicon Valley Bank, is planning to hand over its VC division to a new creditor-backed company, per court documents seen by Reuters. Chief restructuring officer William Kosturos said, "We believe that retaining SVB Capital under a reorganized company is the best path forward to maximize its value in the current environment." More: - A coalition of investors, including MFN Partners, Pacific Investment Management Company, Bank of America Securities, JP Morgan Securities, and King Street Capital, has backed the move.
- The coalition collectively holds about 48% of SVB Financial's most senior debt.
- The U.S. bankruptcy judge will need to approve the plan before it can be incorporated into the formal bankruptcy plan.
- SVB also intends to create another entity to specifically deal with its ongoing legal dispute with U.S. regulators over the seizure of nearly $2B in cash.
Zoom out: - Advisors estimate SVB Capital's worth to be around $572M, about $55M higher than the best buyout bid received so far from investors.
- SVB Capital manages over $10B in assets on behalf of 750 limited partners.
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| 4 | | Former Khosla Ventures partner Keith Rabois is returning to the firm as a managing director. Rabois joins Khosla Ventures as it gears up to start deploying the $3.1B dry powder available from the newly raised funds. More: - Rabois is one of the firm's five managing directors, with the other four being Vinod Khosla, Samir Kaul, Sven Strohband, and David Weiden.
- He left Khosla Ventures five years ago to join Founders Fund, the VC firm founded by Peter Thiel.
- During his tenure at Founders Fund, Rabois led investments into fintech unicorn Ramp, staffing startup Traba, and bookkeeping and tax platform Found.
- Rabois' career includes stints at PayPal, LinkedIn, and Square.
- He stepped down from the COO role at Square in 2013 after allegations of harassment surfaced.
- The firm recently closed a $1.6B flagship eight fund, a $500M seed-stage fund, and a $1B second opportunity fund.
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| 5 | | U.K.-based startups raised $21.3B in VC funding in 2023, per HSBC Innovation Banking, Dealroom, and Reuters. VC funding in 2023 halved compared to the record-high of $41B in 2021 and dropped by about 32% compared to $31.3B in 2022. Investors curbed their VC investments in 2023 due to heightened interest rates and dropping valuations of tech startups. More: - VC funding improved by 46% in the second half of 2023 compared to the previous half.
- HSBC's Innovation Banking CEO Erin Platts remains optimistic about the overall VC sector's prospects in 2024, judging by the increased momentum in the second half of last year.
- Electric mobility sector startups clinched the largest share of the total funding, ending the year with $2.2B.
- The electric battery, space tech, and cybersecurity sectors held the second, third, and fourth spots in the standings, ending the year with $1.2B, $350.9M, and $343.2M, respectively.
- Meanwhile, the mental health-related and generative AI sectors closed out 2023 with $315.9M and $227.4M, respectively.
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| 6 | | Today's Funding: Biotech - Italian biotech and biomaterials startup Mogu raised a Series A round worth €11M ($12M). CDP Venture Capital and ECBF co-led the round with additional support from Kering Ventures and Progress Tech Transfer.
Cybersecurity - Cloud-based network detection and response company ExtraHop Networks Inc. bagged $100M in growth funding from existing investors.
E-commerce - 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.
Fintech - Expense management and corporate card startup Conta Simples secured $41.5M (R$200M) in Series B funding led by Base10 Partners. Existing backers Valor Capital, Jam Fund, Y Combinator, Big Bets, Broadhaven, and DOMO joined the funding round.
Transportation - Autonomous mobility company Burro closed its Series B funding round at $24M. Catalyst Investors and Translink Capital co-led the round, joined by S2G Ventures, Toyota Ventures, F-Prime Capital, and Cibus Capital.
- Autonomous marine surveillance solutions startup ThayerMahan extended its Series C funding round by an additional $20M. Hanwha Asset Management led the round with support from MC2 Security Fund, AE Industrial Partners, I Squared Capital, and Yellow Sub Funding. MC2 Security Fund led the initial $30M Series C round in April 2023.
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- Proptech company Zillow Group reappointed Benchmark general partner Bill Gurley to its board of directors.
- The European Investment Bank's EIB Global division committed $30M to Seedstars Africa Ventures' first Pan-African venture capital fund. Seedstars plans to close the fund between $80M to $100M. The fund is anchored by French PE firm LBO France, which committed $8M.
- Biotech startups are turning to revenue-sharing agreements, licensing agreements, partnerships, and venture debt as they are finding it extremely difficult to raise equity funding from investors.
- Samsung C&T Corp. signed a memorandum of understanding with the U.S.-based VC firm Flagship Engineering to jointly establish a Life Science Fund No. 2.
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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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 | Axonius correlates asset data to provide an up-to-date inventory, uncover gaps, and automate action.
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