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| Here's a look at today's VC briefing. - 🧬 Biotechs could open up the IPO window for tech startups
- 💰 Arch Venture Partners launched its 13th fund to back life sciences startups
- 💵 Primary Venture Partners generated liquidity for LPs through secondary sale
We have also rounded up the top late-stage funding rounds of this week. Thank you. Karan
p/karan-chafekar | |
| 1 | | Share prices of the two biotech startups that made their public debuts last week have been soaring. Pitchbook believes that the current wave of biotech startups could open up the IPO window for tech startups, as both sectors have shown a strong correlation in the past. However, EY's U.S. VC leader, Jeff Grabow, dismissed Pitchbook's forecasts as he believes that biotechs do not consider an IPO as a liquidity event and often launch their IPO offerings even when the market conditions are unfavorable. More: - Typically, tech startups rely on IPO as a liquidity event and have to factor in the broader market conditions to have a successful debut.
- But for biotech companies, an IPO is often the best place to raise large sums of money to fund their drug trials in later stages.
- Although closely correlated, the success of tech IPOs will depend upon other public debuts, especially the bigger tech brands that are able to test the market conditions.
Zoom out: - Bladder cancer drug developer CG Oncology raised $380M at its IPO listing last week, while Arrivent Biopharma raised $175M a couple of days later.
- Other biotech companies lining up their IPO listings include Alto Neuroscience and Fractyl Health.
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| 2 | | VCs deployed $837M in late-stage and beyond global startups this week between Jan. 27 and Feb. 2, per Crunchbase data. AI startups raked in 18% of the funding this week. Transportation, cleantech, and agtech startups nabbed 17%, 14%, and 12% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Chatbot maker Kore.ai raised $150M in fresh funding led by FTV Capital. Existing investor Nvidia participated in the funding round.
- School transportation service startup Zum raised a Series E round of $140M at a $1.3B valuation. Singaporean sovereign wealth fund GIC led the round, joined by Sequoia Capital and SoftBank Vision Fund 2.
- AI-powered predictive design and multiplex gene editing agtech startup Inari secured $103M in fresh funding from Hanwha Impact, Canada Pension Plan Investment Board, Rivas Capital, NGS Super, and other investors.
- Enterprise sustainability platform Watershed bagged a $1.8B valuation at its $100M Series C funding round. Greenoaks led the round, joined by Kleiner Perkins, Sequoia Capital, Elad Gil, Emerson Collective, Galvanize Climate Solutions, and Neo.
- Yiwen Technology, formerly known as Advanced Materials Technology & Engineering, closed its Series D round at ~$70M (500M yuan). CICC Jiatai and Haitong New Energy led the funding round.
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| 3 | | Arch Venture Partners is looking to raise $3B capital for its 13th fund, per regulatory filings seen by Pitchbook. The firm will primarily invest in life science and biotech startups. Arch is confident about reaching its target despite the challenging fundraising environment, as its funds have typically ranked in the top quartile for returns. More: - Arch's Fund VII, with a 2007 vintage, had an IRR of 37.85%, and its Fund X, with a 2020 vintage, had an IRR of 26.46%, per financial documents published by its LP, the University of Texas Investment Management Company.
- The Chicago-based VC firm closed its previous fund at less than $3B in June 2022.
- Arch is known for its successful bets on biotech startup Karuna Therapeutics and Rodeo Therapeutics.
- Arch participated in Karuna's Series A round at a $126M post-money valuation and Rodeo's Series A round at a $14.75M valuation.
- Bristol Myers Squibb acquired Karuna for $14B last December, while Amgen acquired Rodeo for $721M.
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| 4 | | New York-based VC firm Primary Venture Partners (PVP) sold off 30% of its ownership in PVP Fund I to StepStone Group for $95M. PVP made the secondary strip sale transaction to generate liquidity for its limited partners, given the age of the fund and the lack of exit opportunities on the horizon. More: - Fund I's LP New York State Common Retirement Fund received nearly $40M in distributions by March 2023 on its initial investment of $30M, giving the transaction a distributed to paid-in capital (DPI) of 1.17x.
- At the time, the fund's remaining value was estimated to be about $221M, with a total value to paid-in capital (TVPI) multiple of 6.51x.
- PVP, which has about $1B in assets under management, secured $61.4M in capital commitments toward its Fund I in 2015.
- Fund I still continues to own stakes in 19 out of the total 25 companies it backed, including two fintech unicorns: the $1.55B identity risk management company Alloy and the $1B savings and investment platform Vestwell.
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| 5 | | European life sciences VC firm Seroba held the final close of Fund IV at €123M ($134M). The firm intends to make 12 investments from the new fund into early-stage biotech and medtech startups across Western Europe and North America. With the new fund, the firm wants to transform patient treatment and address unmet medical needs. More: - Seroba has already invested in five startups from the new fund: Perfuze, Sibylla Biotech, Deciphex, Complement Therapeutics, and Arctica Therapeutics.
- Limited partners that contributed capital to the new fund include the European Investment Fund (EIF), the Ireland Strategic Investment Fund (ISIF), Enterprise Ireland (EI), Allied Irish Banks (AIB), and CDP Venture Capital.
- To date, Seroba has backed 32 life science startups, including 20 medical devices and eight therapeutics startups.
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| 6 | | Today's Funding: Biotech - Anti-inflammatory therapeutics biotech startup Halia Therapeutics closed its Series C round at $30M. Todd Pederson led the round, with additional support from existing investors.
Fintech - AI-powered audit automation platform DataSnipper entered the unicorn club with a $100M Series B funding round led by Index Ventures.
Healthtech - Clinical intelligence and authorization automation startup Cohere Health raised $50M in equity funding led by Deerfield Management. Other investors participating in the round include Define Ventures, Flare Capital Partners, Longitude Capital, and Polaris Partners.
Transportation - Swedish hybrid-electric plane maker Heart Aerospace raised $107M in Series B funding from Sagitta Ventures, Breakthrough Energy Ventures, the European Innovation Council Fund, United Airlines, and Air Canada.
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- New York-based VC firm Generation Food Rural Partners is set to acquire biodegradable and edible film maker DisSolves for an undisclosed sum. Founder Jared Raszewski will step down from the CEO role and assume the chief product officer role after the acquisition. The acquisition will pave an exit for DisSolves' early backer, Innovation Works.
- Cybersecurity-focused VC firm Strategic Cyber Ventures (SCV) promoted Chris Ahern to the partner role. Ahern joined SCV in 2017 and was the lead investor in several of SCV's investments.
- Basis Set secured $185M in capital commitments towards its third fund to double down on AI and automation startups. The third fund is larger than its $165M second fund, which closed in 2021.
- OurCrowd, a global online investment platform for small investors, is looking to raise $80M for its NH-OC Global Open Innovation Fund, which aims to back AI, cybersecurity, robotics, mobility, and semiconductor startups across Korea and Israel. The fund has already received commitments worth $48M.
- Cascade Seed Fund held the first close of its Fund III at $7M, against a target of $10M. The firm expects to write checks of $200,000 in B2B software, tech-enabled, and consumer brands.
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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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