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| Here’s a look at today’s VC briefing. - 🌍 Investors remain optimistic about climate tech startups.
- 💵 Median take-home pay for analysts in the VC industry dropped by 10%.
- 📉 Startup M&A deals slumped by 11% on Carta due to macroeconomic headwinds.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Investments and valuations of climate-tech startups defied the VC funding dip, faring better than other verticals last year, per Pitchbook. Within the vertical, carbon tech startups represent the most attractive early-stage investments, promising higher annualized returns expected compared to other sub-categories. More: - In order to sustain the growth trajectory, climate tech startups will need to avoid mistakes, such as missing forecasts, which is one of the primary reasons for the poor stock market performance.
- Investors will scrutinize startups based on their ability to deliver returns, closely monitoring metrics such as topline revenue, growth rates, and unit economics.
- Startups in the sector will need to brace for stringent due diligence, especially around financial results, roadmaps, and permits.
- However, investors are very optimistic about this sector, with capital readily available for innovative technologies in the sector.
Zoom out: - While the Morningstar PitchBook Global Unicorn Index rose 14.5%, the Climate Tech Unicorn Index dropped by 1.5%.
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| 2 | | Venture capital analysts witnessed a 10% drop in median salary and bonuses in 2023, per a survey done by the Emerging Venture Capitalists Association. 
What the numbers say: Median take-home pay for senior associates fell by 3%. Even principals and vice-presidents witnessed a 1% decline in salary and bonuses. Associates were the only ones to see an increase in salary by 9% while bonuses remained the same as the previous year. Relevance: Per the WSJ, the reduction in pay may be a sign of potential layoffs in the industry. The layoffs might impact junior roles the most. What happened: VC firms earn income through management fees charged to limited partners. Dealmaking has slowed, impacting the compensation VCs can get. Additionally, profits have also declined as investors are unable to dilute their portfolio stakes. | | | |
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| 3 | | 574 startups completed M&A transactions through the Carta platform in 2023. The number of M&A transactions dipped by 11% due to rising interest rates, heightened inflation, and other macroeconomic factors. M&A activity declined by 15% worldwide last year. More: - 37% of the companies acquired in 2023 had less than 10 employees, while just 9% had more than 100 workers.
- M&As remain the only exit option available for startups as IPO listings remain closed.
- While IPO activity improved last year compared to 2022, it remains historically low.
- Proceeds raised through IPOs plunged by 95% in 2022.
- Due to limited exit options, the number of bridge rounds increased as more startups started opting for the stop-gap measure to extend their cash runways.
- In 2023, Series A and Series B bridge rounds increased by 39% and 36%, respectively.
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| 4 | | Crypto startups raised $485M in VC funding in February 2024, per DefiLlama data cited by CryptoTimes. VC invested 5.3% more than the previous month. Most of the funding went to infrastructure project startups, raking in $387M. More: - DeFi startups bagged $48M, while Web3 startups received $18M out of the total funding.
- Gaming startups took away the remaining $33M.
- The highest investment in the sector was EigenLayer's $100M Series B round led by Andreessen Horowitz.
- Other notable funding rounds to close in the month were liquid stacking platform EtherFi's $27M Series A round, led by Bullish and CoinFund, and payments firm Oobit's $27M Series A round, led by Tether and CMCC Global.
- Within the DeFi vertical, uniform yield marketplace Superform Labs raised a $6.5M seed funding round, and Bitcoin-based DeFi ecosystem maker Omega got $6M.
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| 5 | | OpenAI CEO Sam Altman's net worth has crossed the $2B mark, according to Bloomberg. Altman's net worth is not linked to OpenAI, as he has repeatedly emphasized that he does not own equity in the company. Instead, Altman's net worth comes from his startup and VC fund investments. More: - Altman has invested $1.2B in a number of VC funds managed by Hydrazine Capital.
- Additionally, he has invested $434M in funds at Apollo Projects, which backs "moonshot" startups.
- He has also invested $500M in nuclear fusion company Helion Energy and $180M in Retro Biosciences.
- He is one of the largest shareholders in Reddit, owning an 8.7% stake in the firm, which is gearing up for an IPO listing.
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| 6 | | Today's Funding: Biotech - Biopharmaceutical company FogPharma bagged $145M in Series E funding led by Nextech Invest. Other participants in the round include RA Capital Management, Rock Springs Capital, General Catalyst, Samsara Biocapital, Symbiosis, and Catalio Capital Management.
Blockchain - Ethereum Layer 2 scaling solutions startup Taiko closed its Series A round at $15M. Lightspeed Faction, Hashed, Generative Ventures, and Token Bay Capital led the round.
Energy - Green energy firm GeoPura secured £56M ($70.8M) in fresh funding from The UK Infrastructure Bank, Barclays Sustainable Impact Capital, GM Ventures, SWEN Capital Partners, and Siemens Energy Ventures.
Fintech - Creandum led a $16M Series A round into corporate treasury management fintech startup Embat. Existing investors Samaipata, 4Founders, and Venture Friends participated in the round.
Healthcare - Argá Medtech, a healthcare startup developing a cardiac ablation system to treat cardiac arrhythmias, closed its Series B funding round at €54 ($58.5M). Existing investors Advent Life Sciences and Earlybird Health led the round, joined by new investor Gilde Healthcare.
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| 7 | | Quick Hits: - Top Performers are seeing a 56% increase in deal generation and productivity when they use this sales framework.*
- Funding for Black-founders in the Bay Area dropped 78% from $895M in 2022 to $198M in 2023, per Crunchbase data reported by The San Francisco Standard.
- PE and VCs invested $1.7B in Indian startups in February 2024, $400M more than the same time last year, per the Times of India.
- Former Warburg Pincus executives Nitin Nayar and Sumit Saha are looking to raise $97.5M for a new investment fund for their VC firm Filter Capital.
- Grwth Club executives launched Grwth Ventures to invest in consumer product and technology startups at seed and Series A stages. The fund received a £5M ($6.3M) commitment from cornerstone investor MNC.
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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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