| Here's a look at today's VC briefing. - 📉 Tribe Capital to take a massive valuation hit in Bolt's share buyback program
- ⏳ SoftBank took a conservative investment approach in 2023
- ⛔ Foundry Group to shut down after exhausting the current fund
Thank you. Karan
p/karan-chafekar | |
| 1 | | Investors of e-commerce payments startup Bolt plan to sell shares back to the company at a valuation of $300M. The proposed valuation of the share buyback program is likely to cause significant losses for VC investors as the valuation is 97% less than Bolt's peak figure of $11B in 2021. More: - One of Bolt's investors, Tribe Capital, reportedly plans to take up the offer, selling shares at just over half the per-share price paid five years ago.
- Tribe also participated in Bolt's funding round in 2019 when it was valued at $4.3B.
- Bolt initiated the buyback program to alleviate pressure on investors and potentially recapitalize its business.
Zoom out: - The move comes amidst a liquidity crunch for VC funds, forcing them to sell their VC fund and portfolio company stakes in the secondary markets, often at significantly discounted rates.
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| 2 | | SoftBank took a conservative approach to startup investments in 2023, deploying just $3.8B in startups through its Vision Fund II, per Bloomberg. 
What the numbers say: SoftBank's 2023 investments tally was less than one-tenth of the $40B it deployed in 2021. The firm has taken a massive hit on its investments due to heightened interest rates and a lack of exits. SoftBank's Vision Fund II still had on-paper losses of about $19B at the end of the recent quarter. It looks like the firm has learned from its earlier mistakes of investing at inflated valuations and decided to temper its investment pace. SoftBank's chief for EMEA and India, Sumer Juneja, has directed the team to avoid leading rounds alone, skip startups with valuations above $1B, limit equity stakes to 25%, and target exits at $4B or less. Where to see the impact: The firm's conservative approach also extends to its AI startup investments, raising concerns among analysts that it may miss out on opportunities in the booming generative AI sector. SoftBank is using cash from its balance sheet rather than tapping into the $6.4B dry powder available in Vision Fund II for its core strategic investments in areas such as autonomous trucks, warehousing, and AI ventures. Relevance: Despite the recent string of losses, the firm reaped massive returns from its stakes in DoorDash, TikTok parent Bytedance, and semiconductor firm Arm. SoftBank still owns a 90% stake in the chip designer, which should provide a good windfall for the Japanese investment firm and its founder, Masayoshi Son. Shares of Arm have surged 60% since last week, which in turn caused a $3.8B surge in Son's net worth. | | | |
| 3 | | San Francisco-based VC firm AIX Ventures held the final close of its second fund at $202M. The firm will use the capital to invest in pre-seed to Series A stage AI startups. The firm will primarily back startups developing AI applications and infrastructure to transform workplaces. More: - In addition, AIX is keen on investing in consumer developer tools and data, healthcare, manufacturing and warehousing, and SaaS startups.
- Initial investments will range between $500,000 to $2M.
- AIX will also set aside funds to double down on portfolio startups and provide follow-on funding for Series A rounds and beyond.
- Notable portfolio startups backed by AIX to date include HuggingFace, You.com, Weights & Biases, Perplexity, and Chroma.
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| 4 | | Boulder, Colorado-based VC firm Foundry Group will shut down after it has finished investing out of its current $500M fund. At the end of last month, co-founder and partner Seth Levine announced the firm's decision not to raise any subsequent funds in the future. Levine did not disclose the reason behind the company's decision to shut down the firm when questioned about it by TechCrunch. More: - Foundry, which has about $3.5B worth of assets under management, still has about 33% to 40% of the dry powder from the current eighth fund.
- It wants to use the remaining capital to primarily lead Series A and B rounds.
- The firm expects to deploy all the remaining capital by 2026 and will continue supporting portfolio companies for another decade or more.
- All the executives and partners, including co-founder Brad Feld and partner Chris Moody, are staying with the firm.
- Since its launch in 2007, the VC firm has backed over 200 startups and about 50 VC funds.
- Notable startups in its portfolio include Fitbit, Zynga, and AvidXchange.
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| 5 | | Earlybird Health held the final close of its second fund at €173M ($186M). The latest fund is double the size of its predecessor, which closed at €85M ($91.6M). While the new fund has the same investment thesis as its predecessor, the larger size will help Earlybird write bigger checks to European healthcare startups. More: - Earlybird will support startups working on digital health, diagnostic solutions, medical devices, R&D tools, and biopharma sectors.
- The German VC firm will scout for new startup investment opportunities using its AI tool, Earlybird Eagle Eye.
- The tool collates information about startups from various sources, uncovers stealth mode startups, sources deals, provides market intelligence, generates trend reports and competitor analysis, and accelerates due diligence.
- Limited partners backing the new fund include the British Patient Capital and public health insurer BARMER.
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| 6 | | Today's Funding: AI - Sierra, a new AI startup launched by former Salesforce co-CEO Bret Taylor and veteran Google executive Clay Bavor, has raised $110M in funding from Sequoia Capital and Benchmark ahead of its official launch.
Biotech - Antibody-drug conjugates developer ProfoundBio has raised a $112M Series B round led by Ally Bridge Group. Other participants in the funding include Lilly Asia Ventures, RA Capital Management, OrbiMed, Medicxi, and LifeSci Venture Partners.
- Areteia Therapeutics, a biotech startup developing therapies for eosinophilic asthma, added $75M capital to its initial $350M Series A round, bringing the total raised under the round to $425M. Bain Capital Life Sciences led the extension round, joined by GV, ARCH Venture Partners, Sanofi, Maverick, Capital, and others.
Electronics - Cambridge Mechatronics, a startup developing actuators and controller integrated circuits used in smartphone imaging, bagged $70M in fresh funding co-led by Atlantic Bridge, Intel Capital, and Supernova. The round was also supported by the Sony Innovation Fund.
Software - Automated software testing solutions startup Antithesis emerged from stealth with a $47M seed round from Amplify Partners, Tamarack Global, and First In Ventures.
Spacetech - Satellite building spacetech startup K2 Space secured $50M in fresh funding led by Altimeter Capital. Alpine Space 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.*
- Antler, Salus Ventures, Five V Capital, Main Sequence Ventures, and Mandalay Venture Partners are the first five VC firms that are set to receive a share of the new $130M fund launched by Australia's Queensland Venture Capital Development Fund (QVCDF).
- Endiya Partners aims to raise between $100M and $125M for its third fund. The firm will invest between $7M and $8M in growth-stage startups working in the digital industry, deep tech, health, SaaS, and AI sectors.
- Pre-seed and seed-stage investor Beta Boom raised $14.5M capital for its second fund from limited partners, including Ally Bank, Pivotal Ventures, Bank of America, and Atento Capital.
- 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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