| Here's a look at today's VC briefing. - 🌎 Latin American VC firms are sitting on $4B dry powder
- 📉 Deep tech funding decline was less severe than the overall VC market
- 💰 .406 Ventures closed the fifth fund at $265M
We have also rounded up the top late-stage funding rounds of this week. Thank you. Karan
p/karan-chafekar | |
| 1 | | Latin America-focused venture investors are sitting on $3.7B dry powder. After a period of cautious investment in 2023, investors are now ready to aggressively pursue startup investment opportunities as Latin America's central banks start cutting interest rates. VC investments surged in January this year, surpassing the capital deployment levels of the previous three months. More: - In January, Latin American startups bagged $315.5M in total funding from 63 rounds, per data firm Distrito.
- Notable funding rounds that closed in January 2024 include EV ride-hailing firm Vemo's $60M funding and digital bank account fintech Conta Simples' $41.5M Series B round led by Base10 Partners.
- While investors are slowly increasing their investment pace, they are still being choosy about startups.
- Last year, Latin American investors raised VC funds worth $2B and invested about $4B in startups, per data from Pitchbook and LAVCA.
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| 2 | | VCs deployed $906M in late-stage and beyond global startups this week between Feb. 10 and Feb. 16, per Crunchbase data. AI startups raked in 39% of the funding this week. Biotech, advanced materials, and cybersecurity startups nabbed 19%, 16%, and 11% of the financing, respectively. 
Here are the top five largest rounds announced this week: - Lambda, a startup providing cloud computing services for training AI software, cemented its unicorn status with a $320M Series C round led by Thomas Tull's U.S. Innovative Technology Fund. New investors B Capital, SK Telecom, and T. Rowe Price Associates participated in the round along with existing investors Crescent Cove, Mercato Partners, 1517 Fund, Bloomberg Beta, and Gradient Ventures. The firm was valued at $1.5B.
- Longevity-focused medicines maker BioAge Labs closed its Series D funding round at $170M. Sofinnova led the round with additional backing from Amgen.
- Lilac Solutions, a startup extracting lithium from brine with ion-exchange technology, raised $145M in Series C funding. Mercuria, Lowercarbon Capital, and Breakthrough Energy Ventures led the round, with additional backing from T.Rowe Price, Engine Ventures, Aventurine, Presidio Ventures, and BMW i Ventures.
- 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.
- BlackRock led a $52M Series D round into methane leak detection startup Kairos Aerospace. Other participants in the round include DCVC, Climate Investment, and Energy Innovation Capital.
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| 3 | | Funding for the deep tech sector, including quantum computing, space travel, and robotics startups, dropped by 24% YoY in 2023, per Pitchbook. The dip in VC funding for the deep tech sector was much gentler than the 38% slump seen across the overall venture market. More: - Within the deep tech space, the AI and quantum computing verticals are struggling to commercialize the business, while sustainable consumer goods, energy, and manufacturing are seeing heightened interest from investors.
- Investors want to see real-world uses in several areas of deep tech, where there is innovative technology, especially in areas like climate tech.
- The sector has drawn considerable attention from corporate venture capital firms, especially in the biotech, climate tech, and energy sectors.
- Notable rounds in the sector include autonomous mobility startup 42dot's $787M round, AI and quantum computing firm StudiosouthAQ's $500M funding, and commercial space station operator Axiom Space's $350M fundraising.
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| 4 | | Boston-based VC firm .406 Ventures secured $265M in capital commitments towards its fifth fund. The fund closed $60M below its target. The firm intends to back enterprise-focused healthcare, data, AI, and cybersecurity startups. More: - .406 Ventures has closed five core funds and three opportunity funds worth $1.8B to date.
- Since its launch 18 years ago, the firm has backed 87 startups, having a cumulative value of $18B.
- The firm has already backed four startups, including investment research-focused generative AI platform Portrait Analytics.
- The firm intends to back 20 startups with the new fund.
- .406 Ventures' founder, Liam Donohue, expects to back several repeat founders through the new fund.
- Donohue said, "In the more recent funds, I'm excited to see so many great repeat partners coming back that a third of the fourth fund was repeat founders, and I'd expect about the same in fund five."
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| 5 | | Global gaming startups raised $4.1B in VC funding from 572 deals in 2023, per Pitchbook data cited by Venture Beat. VC funding for the sector dropped 72% compared to the record high of $14.6B set in 2021. Funding for the sector has plateaued, with each of the last five quarters averaging between $900M and $1.3B. More: - Median deal sizes have shrunk from $4.1M in 2022 to $3.6M in 2023.
- The contraction was felt mostly in the early and venture growth stages, while late-stage median deal values increased slightly from $7M to $7.9M.
- Except for venture growth rounds, valuations dropped across all stages.
- The median valuation step-up was 1.5x last year, much lower than the 2.5x multiplier from 2022.
- 38 exits occurred in 2023, with an exit value of $5.5B in 2023, up 45% compared to 2022's total of $3.8B.
- The only notable exit was Aonic's $110M acquisition of nDreams.
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| 6 | | Today's Funding: AI - StepStone Group and PayPal Ventures co-led a $30M Series C funding round into the generative AI platform Rasa. Other participants in the round include Andreessen Horowitz, Accel, and Basis Set Ventures.
Biotech - Firefly Bio, a biotech startup developing degrader antibody conjugates to treat cancer, emerged from stealth with a $94M Series A funding. Founding investor Versant Ventures co-led the latest round along with MPM BioImpact. Decheng Capital and Eli Lilly & Company participated in the round.
Energy - Grid orchestration platform Camus Energy added $10M to its Series A round, bringing the total raised under the round to $26M. Congruent Ventures and Wave Capital co-led the round, with participation from Align Impact, Remarkable Ventures Climate Fund, and Groundswell Ventures.
Healthcare - Childcare network and care benefits company Upwards closed its Series B round at $21M. Alpha Edison led the round, with additional support from M13 and Fika Ventures.
Software - Mobile applications and services startup Bending Spoons bagged $155M in equity funding at a post-money valuation of $2.5B. The round was led by Durable Capital Partners, with Baillie Gifford, Cox Enterprises, NB Renaissance, NUO Capital, and StarTIP participating.
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| 7 | | Quick Hits: - If your business accepted Visa or MC from Jan. 1, 2004, to Jan. 25, 2019, you may be entitled to a share of the historic $5.6B settlement.*
- Federal securities filings reveal Sam Altman is the legal owner of OpenAI Startup Fund, the corporate venture fund of AI firm OpenAI. The VC division reported $175M in total commitments last May.
- Aircastle, Air New Zealand, Embraer, Google, HIS, Natixis, Safran Corporate Ventures, and Technip Energies joined as new partners in United Airlines' sustainable aviation fuel-focused investment fund. The new partners pushed the commitments received for the United Airlines Sustainable Flight Fund over the $200M mark.
- Sequoia Capital is pressuring buy-now-pay-later company Klarna's shareholders to remove former partner Michael Moriz from its board of directors role, sources told The Information.
- Early-stage VC firm RW3 Ventures closed its debut fund at $60M to back blockchain and Web3 startups. The fund was backed by The Raptor Group and Mubadala Capital.
- Conquer any Kubernetes challenge with the Kubernetes Cookbook. Get your copy from DoiT, a global team of cloud experts.*
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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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