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| Here's a look at today's VC briefing. - 🔥 Generative AI boom could fuel hardware funding.
- 🎓 Ivy League endowments reported 2.1% gains on average.
- 💰 Overture Climate VC closed its debut fund at $60M.
Thank you. Karan
p/karan-chafekar | |
| 1 | | U.S. venture deals for the consumer electronics hardware sector have been declining for nearly a decade due to the high costs and risks associated with developing new technology. However, Pitchbook believes the trend could be reversed thanks to the new crop of consumer electronics hardware equipped with generative AI technology. More: - Notable venture-backed startups in the generative AI hardware space include camera-enabled AI assistant device Rabbit and holographic projection and voice recognition-powered AI pin maker Humane.
- Rabbit has raised $30M from investors, while Humane secured $100M in Series C from Microsoft and Kindred Ventures last March.
- One of the prime reasons VCs are reducing their investments in the sector is due to the capital-intensive nature of the hardware and the ever-changing consumer sentiments.
Zoom out: - OpenAI CEO Sam Altman, former Apple design chief Jony Ive, and SoftBank CEO Masayoshi Son are reportedly partnering on a new AI hardware venture.
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| 2 | | Ivy League endowments reported average gains of 2.1% in the 12 months up to July 2023, less than the 9.8% average gains posted by smaller endowments with less than $50M. 
What the numbers say: The average gains reported by Ivy League endowments were also less than the 11% gains seen in the global 70/30 benchmark, split 70-30 between stocks and bonds. The performance of Ivy League endowments in fiscal 2023 was better than the previous year when they posted an average loss of 2.4%. The 70/30 global benchmark had a larger slump of 14% at the same time. Relevance: Columbia's endowment emerged as the top performer amongst the group, posting gains of 4.7%. The gains in 2023 were muted due to a slump in the VC sector. Cambridge Associates Venture Capital Index lost 10.2% in 2023, while its private equity index gained 6.2%. As a result, endowments reduced their allocation to the VC asset class and increased capital deployment in the PE and public equity areas. | | | |
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| 3 | | Bain Capital's venture arm is not keen on investing in generative AI startups for now, per Bain Capital Tech Opportunities partner Darren Abrahamson. The company may change its stance in the future, "but for now, that just feels to us a little bit early and a little more speculative than our focus." Instead, the firm focuses on four primary sectors: software, infrastructure and cybersecurity, fintech, and healthcare IT. More: - Abrahamson said, "What we're looking for is established businesses, often founder-owned and -led, who have reached some scale and are looking for not just capital, but support to help get them to the next level."
- The firm set up a dedicated team in Europe to ensure it widens its reach and includes as many global investors as possible.
- While it has avoided large language models and pure AI startups, nearly every company in its portfolio has incorporated AI tools and seen a 30% to 40% jump in productivity.
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| 4 | | Early-stage VC firm Overture Climate VC closed its debut fund at $60M. The firm aims to back 35 startups, writing checks ranging from $1M to $1.5M. More: - Overture has already backed 21 hardware and software startups through the new fund, including thermal battery developer Antora, geothermal heating and cooling firm Bedrock Energy, tax financing firm Crux, flood monitoring service Floodbase, and EV trucking startup Forum Mobility.
- Limited partners that backed the debut fund include Schneider Electric's SE Ventures, WovenEarth, Arcadia founder Kiran Bhatraju, and other investors.
- The firm has received backing from Boundary Stone Partners, which will also support portfolio startup founders.
- Overture was founded by four people, including three former White House officials, Brandon Hurlbut, Shomik Dutta, and Michael O'Neil, and tech entrepreneur Tamim Mourad.
- Hurlbut also runs Boundary, a government affairs firm that provides policy intelligence and lobbying services.
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| 5 | | Sawari Ventures launched a new fund with a target corpus of $150M. The fund aims to back fintech, education, healthcare, green technology, and deep tech startups in Egypt. More: - Since its founding in 2010, Sawari has invested in 500 early and growth-stage startups across Egypt, Tunisia, and Morocco.
- 35% of its portfolio companies are fintech startups.
- Sawari Ventures alone has backed 30 startups, the most notable being Swvl, MoneyFellows, Instabug, Si-Ware, and Elves.
- Sawari hopes to position Egypt as a major investment hub in Africa and the broader Arab region.
- Co-founder and CEO Hani Al Sanbati estimates that portfolio startups could attract between $350M and $500M in funding over the next five years.
Zoom out: - Funding for African startups slumped 84.8% from $545.1M in January 2023 to $83M in January 2024.
- Agritech, cleantech, and healthtech are the three sectors that attracted the most investment in January 2024.
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| 6 | | Today's Funding: Data - Data backup and recovery firm Clumio secured $75M in Series D funding led by Sutter Hill Ventures. New investor NewView Capital participated in the round, joined by existing backers Index Ventures and Altimeter Capital.
Fintech - Simetrik, a B2B fintech startup developing automation solutions for record centralization, reconciliation, reporting, and accounting, raised $55M in Series B funding. Goldman Sachs Asset Management led the round, joined by FinTech Collective, Cometa, Falabella Ventures, Endeavor Catalyst, Moore Strategic Ventures, and others.
Healthcare - Health technology startup Fabric Labs Inc. bagged $60M in Series A funding led by General Catalyst. Fabric's existing investors, Thrive Capital, GV, and Salesforce Ventures, participated in the round.
- Remote patient monitoring and chronic care management startup HealthSnap raised $25M in Series B funding led by Sands Capital. Comcast Ventures, Acronym Venture Capital, and Florida Opportunity Fund joined the round.
Manufacturing - Silicon photonics company DustPhotonics closed its Series B follow-on funding round at $24M. Sienna Venture Capital, Greenfield Partners, Atreides Management, and Exor Ventures provided funding.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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