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| Here's your daily VC briefing: - 💵 Microsoft is paying Inflection AI $650M to license the AI model and to avoid a poaching lawsuit.
- 🌍 World Fund bagged €300M fund to back startups tackling climate change.
- 💰 Frontline raised $200M from investors for seed and growth funds.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Microsoft is paying Inflection AI $650M, of which $620M is for non-exclusive licensing fees for using its technology, sources told The Information. The tech giant paid an additional $30M to avoid any poaching lawsuit from Inflection after hiring its two co-founders, Mustafa Suleyman and Karén Simonyan, and most of its 70-person team earlier this week. More: - After the news was made public, remaining co-founder Reid Hoffman assured Inflection's shareholders "will have a good outcome today, and I anticipate good future upside."
- Inflection's early investors, who participated in its $225M funding round, will get about 1.5 times the return on their initial investment.
- Investors participating in Inflection's $1.3B round will get a 1.1x return on their investment.
- Inflection is pivoting away from building a personalized AI chatbot to an enterprise-focused business model.
- The AI startup touched a peak valuation of $4B when it raised a $1.3B funding round led by Microsoft, Hoffman, Bill Gates, Eric Schmidt, and Nvidia in mid-2023.
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| 2 | | VCs deployed $304.9M in late-stage and beyond global startups this week between March 16 and March 22, per Crunchbase data. Fintech startups raked in 34% of the funding this week. Biotech, healthcare, and food & beverage startups nabbed 27%, 22%, and 8% of the financing, respectively. 
Here are the top five largest rounds announced this week: - German embedded finance startup Solaris SE bagged €96M ($104.3M) in Series F funding led by SBI Group.
- Swiss immuno-oncology startup Nouscom extended its Series C round to €75.8M ($82M) with €7M ($7.6M) in additional funding from Angelini Ventures.
- AI-enabled personalized surgery medtech firm Carlsmed raised $52.5M in Series C funding co-led by B Capital and U.S. Venture Partners.
- Cloud kitchen startup Curefoods secured $25M in Series D funding from Three State Ventures. The firm was valued at $375M.
- B2B marketplace platform Jumbotail bagged $18.2M in Series C3 equity funding. Artal Asia led the round, joined by Heron Rock, Sabre Investment, Arkham Ventures, Jarvis Reserve Fund, and Reaction Global.
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| 3 | | World Fund closed its debut fund at €300M ($325M) to back startups producing technologies to tackle climate change. The fund closed €50M ($54M) below the target. The European climate technology investor aims to back 25 to 30 startups in Europe. More: - Institutional investors that contributed to the fund include the European Investment Fund, the U.K. Environment Agency Pension Fund, BPI France, Wachstumsfonds, NRW.BANK, Wiltshire Pension Fund, Erste Plavi, PwC Germany, KfW, and Ignitis Grupe.
- European Investment Fund invested €50M ($54M) in the fund.
- World Fund will reserve two-thirds of the capital for follow-on investments.
- The fund has already backed IQM Quantum Computers, Space Forge, Planet A Foods, Juicy Marbles, ENOUGH, CustomCells, Cylib, aedifion, and Ecoworks.
Zoom out: - World Fund emerged from the environment-conscious search engine Ecosia, which plants trees funded by search inquiries.
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| 4 | | European VC firm Frontline raised $200M capital towards its seed and growth funds that will back B2B software startups. The Frontline Seed fund aims to back European startups looking to expand to the U.S. Meanwhile, the Frontline Growth fund will back Series B to Series D-stage U.S. startups looking to set up operations in Europe. More: - In addition to the funding, Frontline will also help portfolio companies with go-to-market strategy, hiring talent, organizational design, and location planning.
- It supported portfolio startup HR software company Lattice and compliance platform Vanta expansion to Europe.
Zoom out: - Per a report published by Index Ventures, about one-third of European startups expanded to the U.S. before raising a Series A round between 2015 and 2019.
- U.S.-based startups can benefit immensely from setting up operations in Europe.
- "Though it is a traditionally undervalued market, Europe accounts for over 30% of global revenues of top-performing B2B software companies at IPO," said Brennan O'Donnell, who will co-lead the Frontline Growth fund with Stephen McIntyre.
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| 5 | | VCs invested $4.5B into African technology startups in 2023, per data from the African Private Capital Association (APCA) quoted by Pitchbook. VC funding declined by 31% compared to 2022. The dip can be attributed to a withdrawal of foreign investors due to weakening local currencies and high inflation rates. 50% of the dip was due to the withdrawal of North American investors, per the association. More: - The withdrawal of European and Asia-Pacific investors contributed to 18% and 9% of the slump, respectively.
- Equity and debt funding deal count slumped from the record-high of 781 in 2022 to 545 in 2023.
- 26% of the funding was invested in West African startups, particularly Nigeria.
- The fintech sector bagged 23% of the funding, with IT taking 20% and consumer discretionary raking in 17%.
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| 6 | | Today's Funding: Cleantech - Bill Gates-backed green cement startup CemVision raised a €10M ($10.8M) seed round from Polar Structure, BackingMinds, and Zacua Ventures.
Cloud computing Internet - The Browser Company, the startup behind the Arc browser, bagged $50M in fresh funding led by Pace Capital, per TechCrunch. The company was valued at $550M at the latest round.
Logistics Transportation - Fuel and fleet management startup Coast secured $92M in fresh funding, consisting of $25M in equity capital and $67M in debt. The equity funding came from BoxGroup, Avid Ventures, Accel, Insight Partners, and Better Tomorrow Ventures, while Silicon Valley Bank and TriplePoint Capital provided the debt facility.
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| 7 | | Quick Hits: - Apply to see if you are entitled to a portion of this $5.66 Billion payout from Mastercard or Visa.*
- VC firm Acre Venture Partners closed its third fund at $140M to back agrifood tech startups between pre-seed to Series B stages.
- Alphatron Capital, formerly SMK Ventures, secured $30M in capital commitment towards its debut fund. The fund aims to back enterprise SaaS, fintech, healthtech, AI/ML, digital content, and D2C sectors.
- Nuclear fuel producer Orano launched its corporate venture capital vehicle with €50M ($54M) capital to back early-stage industrial startups. The fund aims to back about 20 pre-seed to Series A startups in France and Europe.
- Climate tech investment firm Silence raised a $35M fund. The fund has already backed 22 startups since its first close in June 2022.
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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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