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| Here's a look at today's VC briefing. - 💊 The biopharma sector witnessed a modest decline as investors remain excited about AI and computational drug discovery startups.
- 🌾 Investors' interest in precision agriculture tech startups surged in Q4 2023.
- 💰 Commerce Ventures raises a $150M fund to invest in retail and financial services startups.
Thank you. Karan
p/karan-chafekar | |
| 1 | | VCs invested $29.9B into biopharma startups through 920 funding deals in 2023, per Pitchbook data reported by Fierce Biotech. The sector witnessed a modest decline compared to 2022's tally of $36.7B. The biopharma sector reported exits worth $18.3B in 2023, with 55 IPOs and 39 acquisitions. More: - While investors have adopted a cautious investment approach, they remain excited about companies with mature clinical data, early-stage biotechs leveraging AI, and computational drug discovery startups.
- Investors are eyeing investment opportunities in molecular glue degraders, epigenetic editing, and macrocyclic peptides in 2024 and beyond.
- RA Capital Management was the most active biopharma investor in 2023, inking 28 deals.
- Alexandria Investment Ventures took the second spot in the standings with 25 deals, followed by ARCH Venture Partners with 22 deals.
- VCs invested $7.8B in biopharma startups in Q3, followed by $6.3B in Q4 2023.
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| 2 | | Global precision agriculture startups raked in $687.7M VC funding out of the $1.4B deployed in the overall agtech sector in Q4 2023. 
What the numbers say: While agtech sector startups found it challenging to raise capital in 2023, investors' interest in precision agriculture technology startups surged, especially in drone and imagery analytics, farm management software, field IoT, and robotics and smart field management domains. Investors remain enthusiastic about the precision agriculture sector as it combines two other areas of interest to VCs: climate sustainability and generative AI. Relevance: Drones and imagery startups recorded the most number of deals within the precision agriculture domain. Notable drones and imagery startups in the domain that closed funding rounds in Q4 include Quantum Systems, Pachama, and LiveEO. What happened: The overall agtech industry witnessed a flurry of downrounds and bankruptcies. Plant biotech firm Indigo Ag and indoor farming firm Bowery had to settle for down rounds, while Infarm and AeroFarms declared bankruptcy. | | | |
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| 3 | | Commerce Ventures received commitments worth more than $150M for its fifth fund. The fund will invest in startups developing innovations for the retail and financial services sectors. More: - The fund was oversubscribed and received backing from 20 corporate investors, including Intuit, USAA, Franklin Park, Industry Ventures, and StepStone Group.
- Commerce Ventures has backed over 100 startups to date, the most notable of which are Bill.com, Canary, Candex, Forter, FleetOps, Kevel, Marqeta (MQ), Mudflap, Narvar, and Trove.
- Unicorn startups in its portfolio include Kin, Socure, MX, and Vestwell.
- Notable exits through IPO include Bill.com and Marqeta.
- Commerce exited InAuth when it was acquired by American Express in 2016 and SessionM when it was bought by Mastercard in 2019.
Zoom out: - Commerce took nine months to raise capital from investors towards the fifth fund due to the challenging fundraising climate.
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| 4 | | Sustainable food and agriculture-focused investment firm Cibus Capital secured $645M for two funds. $510M capital is earmarked for its second mid-market PE fund, and the remaining $135M for its second VC fund. The VC fund aims to back 18 startups in the agtech and food-tech sectors. The capital will be split equally for North American and European startups. More: - Cibus has already backed 10 startups from the VC fund.
- Initial check sizes will range between $5M to $10M.
- Agriculture robotics firm Burro, pollination startup BeeHero, and "clean-label" ramen firm Borealis Foods are a few of the notable startups in its venture portfolio.
- Limited partners backing both funds include the Los Angeles County Employee Retirement Association and Australia's Retail Employees Superannuation Trust.
- Cibus has raised $1B to date for its PE and VC funds.
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| 5 | | Climate tech-focused VC firm Carbon Equity crossed the initial target of €75M ($81.4M) for its Climate Tech Portfolio Fund II and raised €100M ($108.5M) from investors. With the new fund, the firm will invest in about seven to 10 VC funds that back startups working on green hydrogen, battery technology, carbon-free cement, industrial heat pumps, bioplastics, smart thermostats, and next-generation proteins. More: - The Dutch VC firm expects its investments to give it indirect exposure to 150 to 200 startups.
- Carbon Equity has already backed 15 VC funds through the first and the second fund, including funds launched by Breakthrough Energy Ventures, Ara Partners, 2150 VC, and Energy Impact Partners.
- The current fund's size is more than double that of its predecessor, which closed at €42M ($45M) in 2022.
- In less than three years since its launch, the firm has raised more than €200M ($217M) capital from 700 investors.
- Carbon Equity also launched the third investment vehicle with a target corpus of €125M ($135.6M).
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| 6 | | Today's Funding: Biotech - Chronic cough treatment biotech startup Nocion Therapeutics raised $62M in Series B funding led by Arkin Bio Capital and Monograph Capital. Existing backers Canaan Partners, Mass General Brigham Ventures, F-Prime Capital, Mission BioCapital, and Osage University Partners participated in the round.
- Medtech company Phagenesis closed its Series D funding round at $42M. EQT Life Sciences and Sectoral co-led the round, joined by new investors British Patient Capital, Northern Gritstone, and Aphelion.
Energy - German green hydrogen startup Sunfire bagged €500M ($542.5M) in Series E funding, which consists of €215M ($232M) in equity, €200M ($217M) in grants, and €100M ($108.5M) in debt. The European Investment Bank provided the debt funding, while the equity tranche came from LGT, GIC, Ahren Innovation Capital, and Carbon Equity.
Healthcare - AI-powered digital health platform Healthee closed its Series A funding round at $32M. Fin Capital, Glilot Capital Partners, and Group11 co-led the funding round, with additional support from TriNet.
Software - Saudi Arabian software startup Salla secured $130M from sovereign wealth fund Sanabil and VC firm STV ahead of its planned IPO listing.
Travel - Hospitality management solutions startup Mews cemented its unicorn status with a $1.2B valuation at its $110M funding round. Existing investor Kinnevik led the current round, with additional support from Revaia, Goldman Sachs Alternatives, Notion Capital, and LGVP.
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- Chinese AI startup MiniMax is in advanced talks with investors to raise a $600M funding round at a $2.5B valuation. Alibaba Group Holdings Ltd. is reportedly leading the round. HongShan, formerly Sequoia China, has also committed capital for the current round.
- Sam Blond is stepping down from his VC role at Founders Fund. Blond, the former chief revenue officer at Brex, joined Peter Thiel's VC firm 18 months ago.
- Saudi Arabian digital transformation firm stc Group launched its corporate venture capital arm called tali ventures to invest in AI, fintech, proptech, ICT, cloud, IoT, and cybersecurity startups. The firm will also collaborate with Sanabil and Prosperity7.
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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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