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| Here's a look at today's VC briefing. - 📉 Insurtech funding slumped to a six-year low as headwinds continue to persist
- 🕳️ Founders and family offices fill the VC funding void left by institutional investors
- 💰 Thrive Capital has backed about 17 other VC funds from its growth fund
Thank you. Karan
p/karan-chafekar | |
| 1 | | Global insurtech startups raised $4.6B in VC funding in 2023, per CB Insights. The annual total for 2023 is the lowest for the sector since 2017. Funding for the industry dipped 45% YoY, slightly more than the 42% YoY dip seen across the broader VC funding environment. More: - U.S.-based insurtech startups raked in 51% of the funding in 2023.
- Property and casualty insurtechs funding fell 39% YoY to $3.4B, while the life and health insurance domain witnessed a larger drop of 58% YoY to $1.1B in 2023.
- Only six mega funding rounds of more than $100M closed in 2023, a list which includes Next Insurance's $265M Series G, Gravie's $179M Series F, and Devoted Health's $175M Series E funding rounds.
- Only one insurtech startup entered the unicorn club in 2023, namely home insurance-focused startup Kin, which touched a $1B valuation at its $33M Series D round in September 2023.
- Headwinds continue to persist for the sector, with no IPO listings recorded in 2023.
- On the flip side, strategic investors and buyers have started taking an interest in acquiring insurtech startups due to a drop in funding and valuations.
- Most notable acquisitions that closed in 2023 include Travelers' $435M purchase of Corvus Insurance and Sumitomo Life's majority stake acquisition in Singlife at a $3.4B valuation.
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| 2 | | U.S. VC firms raised funds worth $66.9B in 2023, less than half the capital raised in 2022, per Pitchbook-NVCA Venture Monitor. 
What the numbers say: Established and emerging VC fund managers both struggled to raise funds in 2023. The headwinds were stronger for emerging fund managers as established ones could rake in 75.3% of the total capital. What happened: As a VC firm matures, it seeks capital from institutional investors rather than high-net-worth investors or single-family offices, as the former can often commit large sums. However, in the current uncertain economic climate where institutional investors are more cautious about their investments, fund managers must tap into their network of high-net-worth investors. Relevance: Founders made up more than a third of the investors that contributed capital to British VC firm Episode 1 Ventures' third fund, which closed at £76M ($96M). The fund secured capital from Zoopla founder Alex Chesterman and Bloom & Wild's founder Aron Gelbard. Touring Capital, a VC firm led by Microsoft's VC arm M12's alums, managed to raise capital from 25 founders. | | | |
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| 3 | | Joshua Kushner's VC firm, Thrive Capital, had invested in at least 17 VC funds launched by other firms from its $3.3B eight growth-stage fund by last fall, as reported by Fortune. Notable VC firms backed by Thrive include funds launched by Scale AI CEO Alexandr Wang's Los Alamos Capital, Packy McCormick's Not Boring Capital, and investor David Citron and former NBA player Omri Casspi's Sheva VC. More: - Thrive has about $14B in assets under management and is gearing up to launch its next growth fund soon.
- Typically, only larger VC firms can invest in VC funds launched by other investors, given regulatory constraints that limit investments in other VC funds, debt, and secondaries to 20% of their existing funds.
- Goldman Sachs sold off its stake in Thrive Capital back to the VC firm at the beginning of last year.
- Bob Iger, Henry Kravis, Jorge Paulo Lemann, and other investors later picked up the stake.
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| 4 | | European VC firm Founderful secured $85M in capital commitments toward its second fund. The firm is confident about reaching its target of $120M by July. Founderful will invest in pre-seed and seed startups in robotics, industrial automation, AI, machine learning, computer vision, and material sciences innovation. More: - Average check sizes for pre-seed and seed rounds will be $1M and $2M, respectively.
- The Swiss VC firm rebranded from Wingman Ventures to Founderful today.
- Since its launch in 2018, the firm has backed 50 startups, including eight from the new fund in 2023.
- The recent eight investments include alternative silicon chips startup Chiral Nano, ESG reporting platform Nala Earth, security robotics firm Ascento, robotics startup Saeki, lithium-ion battery maker Eightinks, and humanoid robotics firm Faive Robotics.
- The $60M Fund I backed 40 startups, the most notable of which are survey drone startup Wingtra, plastics recycling startup DePoly, and sustainable computing firm Corintis.
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| 5 | | Peter Thiel's venture firm, Founders Fund, has resumed its investments in cryptocurrency tokens, sources informed Reuters. Between late summer and early fall last year, the firm purchased cryptocurrency tokens worth roughly $200M, evenly split between Bitcoin and Ether. Just before the crypto market crashed in 2022, Founders Fund liquidated part of its Bitcoin stake, which resulted in returns of about $1.8B. More: - Founders Fund started repurchasing Bitcoin in the summer of 2023 when prices dipped below the $30,000 mark.
- Bitcoin prices slumped to nearly $15,000 in 2022 due to the fallout of cryptocurrency exchange FTX and increasing regulatory headwinds.
- Prices have since started climbing steadily, crossing the $50,000 mark this year.
- Despite the surge, Bitcoin prices remain below the peak value of $69,000 seen in November 2021.
- PayPal co-founder Thiel has been a vocal supporter of Bitcoin and other cryptocurrencies, as it aligns with his interests in libertarianism, small government, and technology innovation.
- Joey Krug joined Founders Fund in the partner role in April 2023 to lead its crypto investing initiative.
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| 6 | | Today's Funding: Cybersecurity - Bugcrowd, a cybersecurity startup that helps companies hire freelance hackers and coders for bug bounty programs, raised $102M in fresh funding led by General Catalyst. Existing investors Rally Ventures and Costanoa Ventures participated in the round.
- Risk-based vulnerability management platform Nucleus Security raked in $43M in Series B funding led by Arthur Ventures and Lead Edge Capital. In-Q-Tel participated in the round.
Fintech - European challenger bank Finom secured €50M ($54M) in Series B funding co-led by Northzone and General Catalyst. Target Global, Cogito Capital, Entrée Capital, FJLabs, and S16vc participated in the round.
Proptech - Premium short-stay apartment rental platform Bob W closed its Series B funding round at €40M ($43M). Evli Growth led the round, joined by Flashpoint, Supercell co-founder Mikko Kodisoja, and Taavet+Sten.
Web3 - Cross-chain communication Web3 startup Analog raked in $16M in fresh funding at a valuation of $120M. Near, Orange DAO, Quantstamp, Tribe Capital, Alumni Ventures, and NGC Ventures participated in the round.
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| 7 | | Quick Hits: - Visa and Mastercard have come to a historic $5B settlement, marking a pivotal moment for small business owners.*
- Women-led climate tech investor Buoyant Ventures promoted Laura Dyer from senior associate to principal.
- Managed care organization CareSource has become a limited partner with early-stage venture studio and health solutions-focused VC firm Boomerang Ventures. CareSource will receive co-investment opportunities to invest in cutting-edge health technologies along with Boomerang.
- U.S. sector agnostic VC firm Homebrew is looking to raise a $50M fund, per SEC filings seen by TechCrunch. According to sources, the new fund will help the firm double down on promising portfolio startups.
- Inflection Point Ventures achieved 14 exits in 2023 and was able to distribute returns to limited partners with an internal rate of return of 61%.
- Dive into advanced tips and tricks with the Kubernetes Cookbook. Get your copy compliments of the cloud experts at DoiT.
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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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