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| Here's a look at today's VC briefing. - 💰 SoftBank founder Masayoshi Son is looking to raise $100B for a new AI chip startup.
- 🦄 Valuations of cybersecurity and AI unicorn startups surged by more than 20% in 2023.
- 🚀 OpenAI completed a tender offer at a $86B valuation.
Thank you. Karan
p/karan-chafekar | |
| 1 | | SoftBank founder Masayoshi Son plans to raise $100B for a new AI chip venture. The Japanese investment firm is expected to contribute $30B to the new venture, with the remaining $70B set to come from investors in the Middle East. More: - The new venture has been dubbed Izanagi, named after the Japanese god of creation and life.
- If successful, Son's new venture might be the largest investment in the space, dwarfing Microsoft's $10B bet on ChatGPT maker OpenAI.
- Son has had a long-standing interest in artificial general intelligence for years but had to curb investments from SoftBank due to its recent spate of losses.
- However, with SoftBank's financial performance showing signs of recovery, Son sees this as the perfect moment to capitalize on the AI industry opportunity.
- SoftBank had about $41B in cash and cash equivalents at the end of last quarter due to the recent resurgence in public equities.
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| 2 | | Last year, the value of cybersecurity and AI unicorn startups rose by 24.4% and 22.9%, respectively, per the Morningstar Pitchbook Global Unicorn Vertical Indexes. 
What the numbers say: Only 81 startups entered the unicorn club last year, less than a third of the 330 unicorns minted in 2022. 44% of new unicorns minted in 2023 belonged to the AI and machine-learning sector. While the unicorn creation rate slowed, the cumulative value of all VC-backed unicorns increased by 12.77%. Relevance: The increase in cybersecurity unicorn startup valuations can be attributed to Wiz touching a $10B valuation, Keyfactor hitting $1.3B, and Prove Identity crossing the $1B mark last year. Similarly, the AI sector experienced a surge, fueled by Microsoft's $10B investment in OpenAI and Amazon's $4B investment in Anthropic in 2023. Where to see the impact: While the cybersecurity and AI sectors defied the VC funding dip, the valuations of agtech unicorn startups declined by more than 20%, making it the worst-performing sector in the unicorn index. Fidelity marked down the valuation of indoor farming startup Bowery by 85%. Another agtech startup to take a huge valuation cut was crop protection specialist Indigo. | | | |
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| 3 | | AI startup OpenAI completed a tender offer, giving employees an opportunity to sell their shares at an implied valuation of $86B. Josh Kushner's VC firm Thrive Capital led the tender offer, sources informed Bloomberg. The firm reportedly plans to raise fresh funding at a valuation of about $100B. More: - The tender offer was initially supposed to be completed by late last year but faced delays due to the ousting and subsequent reinstatement of OpenAI CEO Sam Altman in November.
- OpenAI has more than tripled its valuation in the past 10 months.
- Last year, it arranged for a tender offer at a valuation of $29B.
- Thrive Capital participated in the last tender offer round along with Sequoia Capital, Andreessen Horowitz, and K2 Global.
- The firm has raised about $13B from investors to date, including a $10B round from Microsoft.
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| 4 | | Climate tech-focused fund-of-funds WovenEarth Ventures held the final close of its debut fund at $152M, per Axios. The firm has already backed 13 U.S.-based early-stage generalist and decarbonization-focused climate tech VC funds, including Blue Bear Capital. More: - Founder Jane Woodward said, "The fundamental thesis of WovenEarth Ventures is that we're building a bridge, that's a risk-adjusted product, that in one investment, you get exposure to three or 400 companies, instead of 20 to 30."
- Woodward is joined by co-founder Mauricia Geissler and energy transition specialist Denise Miller.
- Limited partners backing the debut fund include endowments of Boston University and Pennsylvania State.
Zoom out: - Climate-tech VC firms typically don't have many fund-of-funds investors, as large firms in the sector, including Lowercarbon Capital and Breakthrough Energy Ventures, prefer to invest in companies directly.
- In addition to investing in other climate VC funds, WovenEarth will also back startups directly.
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| 5 | | A new Crunchbase analysis highlighted the five sectors that witnessed the most activity from seed-stage investors in 2023. Investors' interest remained high for AI-enabled healthcare, spacetech, construction, carbon credit fintechs, and generative AI. Conversely, there was a noticeable decline in investments in consumer products, consumer electronics, and DTC sectors. More: - Within AI-enabled healthcare, investors are particularly focused on diagnostics, pharmaceutical research, and administrative automation.
- Despite the high capital requirements, spacetech startups are attracting investments, especially in areas of asteroid mining, spacecraft operations, automation, and satellite design.
- In the construction industry, investors support proptech-focused startups specializing in hiring, permit management, and project planning.
- Investors are backing startups involved in managing carbon credits, tracking emissions, and optimizing renewable energy expenditures in the cleantech domain.
- Investors were most enthusiastic about generative AI startups due to the disruptive potential this technology has on other sectors.
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| 6 | | Today's Funding: Foodtech - Molecular farming technology startup Miruku raised $5M in pre-Series A funding. Motion Capital led the round, joined by seed round investor Movac and new investor NZVC.
Robotics - Robotic bricklaying startup Monumental emerged from stealth with a $25M round led by Plural and Hummingbird. Other participants in the round include Northzone, Fundamental, and NP-Hard Ventures.
Spacetech - Australian space rocket technology company Gilmour Space touched a valuation of $605M after raising a $55M Series D round. The Queensland Investment Corporation led the round with additional backing from Blackbird, Main Sequence, HostPlus, and HESTA.
Web3 - Web3 gaming data analytics and infrastructure startup Helika bagged $8M in Series A funding led by Pantera Capital. Sparkle Ventures, Diagram Ventures, Sfermion, SciPlay, and other firms participated in the round.
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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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