| |
| Here's your daily VC briefing: - 💰 Reddit and its investors plan to raise $748M at the upcoming IPO.
- 🏦 Lenders issued $3B more venture debt in H2 2023 than in H1.
- 🛵 Baron Capital marked up Indian food delivery startup Swiggy's valuation to $12.16B.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Reddit and a few investors plan to sell 22 million shares during its upcoming IPO listing on the New York Stock Exchange under the symbol RDDT. The social media platform has priced shares between $31 and $34 a piece, giving it an implied valuation of $6.5B, sources informed Bloomberg. The firm could raise as much as $748M from the listing. More: - Reddit is offering its most loyal users a chance to buy about 1.76 million shares in the IPO.
- The startup's expected valuation is significantly lower than its peak valuation of $10B in 2021 when it first filed confidentially to go public.
- Bloomberg estimated Reddit's valuation to be as high as $15B a year later.
- Reddit reported a net loss of $91M on an annual revenue of $804M in 2023.
- Losses narrowed compared to the $159M net loss on $667M revenue posted a year earlier.
- Per filing documents, Reddit expects an increase of at least $66.4M in annual revenue after signing $203M worth of contracts to license access to data on its platform.
- The company had about 73.1 million daily active users in Q4 2023.
- The upcoming IPO could cause a huge windfall for its investors, including Advance Magazine Publishers, FMR LLC, OpenAI CEO Sam Altman, Tencent Holdings, Vy Capital, Quiet Capital, and Tacit Capital.
- Reddit's co-founder and CEO, Steven Huffman, and COO, Jennifer Wong, also own significant stake in the firm.
|     | |
| 2 | | Banks and non-bank lenders provided U.S. startups with $3B more in venture debt in the second half of 2023 compared to the first half, per Pitchbook. 
What the numbers say: Venture debt plummeted in the first half after the collapse of Silicon Valley Bank (SVB), which accounted for 60% to 70% of the entire venture debt market. After SVB's fallout, venture debt fell by more than $7.7B in H1 2023 compared to the same period a year ago. In 2023, venture debt for early-stage startups fell by 57% and by 59% for pre-seed to seed startups, per the WSJ. What happened: However, venture debt lending surged to $13B in Q3 2023 due to a recovery in public equities and a probability of plateauing interest rate hikes. With economic conditions stabilizing, banks started becoming lenient with their non-core businesses, such as venture debt. Other banking and non-banking financial institutions saw an opportunity to capitalize on SVB's falling market share, which fell to about 20% to 30% by Q3. Relevance: While banks tried to fill the void left by SVB's collapse, none of the vendors could assert their market dominance due to prevailing higher interest rates and general risk aversion among venture investors. Even a year after SVB's collapse, venture debt remains tough to access. SVB has restarted venture debt lending after being acquired by First Citizens BancShares. | | | |
| A message from our sponsor, Ritual. |  | | Did you know up to 70% of the immune system is located in the gut? We all know it's important to stay hydrated, get rest, and eat a balanced diet to support immune health. Prioritizing gut health is also key to supporting immune health, and Ritual’s Synbiotic+ with probiotics LGG® and BB-12® is a game changer. Their 3-in-1 synbiotic provides a comprehensive formula to support digestive and gut health by combining clinically studied prebiotics, probiotics, and a postbiotic in one single-nested minty capsule.* Synbiotic+ features a delayed-release capsule designed to help reach the colon (not the stomach), an ideal place for probiotics to survive and grow. They even conducted a gut model study, which showed Synbiotic+ significantly increased microbial diversity and the growth of beneficial bacteria in the gut – Win. Win.* Try Synbiotic+ today and get 25% off your first month with code INSIDE25. Claim Discount
*These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease. | |
|
| 3 | | Baron Capital marked up the value of its stake in Indian food delivery startup Swiggy from the original investment value of $76.7M to $87.2M at the end of last December. The markup gives Swiggy an implied valuation of $12.16B, higher than its peak post-money valuation of $10.7B from a funding round in early 2022. More: - Swiggy, which has a 45% market share of the Indian food delivery market, is "well positioned to benefit from structural growth in online food delivery in India," per Baron Capital.
- Last year, the firm brought down expenses and made its food delivery business profitable.
- The firm's valuation uptick marks a turnaround for the startup after Inveso slashed its valuation by half to about $5.5B in mid-2023.
- Swiggy is planning to broaden its service offerings by expanding into consumer electronics and other e-commerce delivery businesses.
- The firm, backed by Accel, Prosus Ventures, and SoftBank, is planning to go public later this year.
| | | |
| 4 | | Cybersecurity unicorn startup Wiz is in talks with investors to raise fresh funding at a valuation of $10B, the same as its $300M Series D round from last February, per Calcalist. The exact size of the new round is unknown but is expected to be worth hundreds of millions of dollars. Per reports, investors negotiating for the latest round include Thrive, Lightspeed Venture Partners, G Squared, Sequoia, and Cyberstarts. More: - The fresh fundraising talks come after Wiz touched $350M in annual recurring revenue last month, a feat which it accomplished in just four years since launch.
- Wiz hired Zscaler's former president and COO, Dali Rajic, as president and COO to "help steer the company through the next phases of its rapid growth on the road to IPO," the company said in a statement.
- The startup plans to add another 400 people to its 900-employee workforce in 2024.
- Salesforce, Slack, Mars, BMW, Priceline, DocuSign, Plaid, and Agoda are a few of its most notable customers.
| | | |
| A message from our sponsor, UXPin. |  | | ✨ Don’t get lost in translation. Generate clean code and UI in minutes. Write the prompt and generate your design in one click. Customize it however you like. When you’re done – copy the ready code to start building your product. Want more? - Explore interactive, customizable, and themeable templates.
- Build your UI with components coming from top open-source libraries like MUI, Tailwind UI, Ant Design, and Bootstrap.
- Copy Tailwind’s template code into your component and generate a full UI section you can add to your design.
- Copy production-ready code off your design in a single click. (Psst, no poor plugin translations)
- … or open the code in your dev online environment, StackBlitz.
Build your product 8.6x faster. Don’t let pixels derail your project. Try UXPin Merge | |
|
| 5 | | A91 Partners expects to raise between $700M and $750M from limited partners for its third fund. According to sources, the firm plans to launch and market the fund after a few weeks. The firm primarily invests in technology, consumer, and financial service sectors. More: - The firm's most successful portfolio companies include Digit Insurance, HealthKart, Sugar Cosmetics, Giva, Exotel, La Renon, Blue Tokai Coffee, and Paper Boat.
- A91 Partners debuted with a $350M fund in 2018 and followed it up with a $550M second fund three years later.
- The firm has deployed half the capital from Fund II into nine startups.
- Sources believe the firm could increase its initial check sizes from $20M to $30M from Fund II to about $35M to $40M from Fund III.
Zoom out: | | | |
| 6 | | Today's Funding: AI - Index Ventures led a $20M seed funding round into Adaptive, a new startup making it easier for businesses to train large language models. Investors participating in the round include ICONIQ Capital, Motier Ventures, Databricks Ventures, and HuggingFund by Factorial. The startup was valued at $100M.
Fintech - Estancia Capital Partners LP acquired a minority stake in British savings product startup Flagstone by investing £108M ($139M). The startup will use the proceeds to expand in the U.K. and internationally.
- Banking-as-a-service platform Griffin Bank extended its Series A round with an additional $24M (£19M) funding led by MassMutual Ventures, NordicNinja, and Breega. Existing investors Notion Capital and EQT Ventures participated in the round.
- British payment services startup Baanx bagged $20M in Series A funding from Ledger, Tezos, and British Business Bank.
- Alli Webb and Morgan DeBaun provided a $1M seed funding round to Cherub, a startup that connects founders, investors, and advisors.
| | | |
| 7 | | Quick Hits: - Attention busy professionals & feline owners: Meowtel has the largest elite network of insured cat sitters who tailor to your cat's every need.*
- Chip startup Astera Labs aims to raise $534M at a $4.5B valuation at its upcoming IPO listing. The company is selling about 14.8 million shares, priced between $27 and $30 each.
- The Bank of America, Bank of Montreal, Churchill Asset Management, Texas Capital Bank, Amazon, The Rockwell Fund, and Ballentine Partners contributed capital to the second Artemis Fund, which closed at $36M to invest in underrepresented founders.
- Israeli VC firm OurCrowd is reportedly partnering with chip maker Nvidia to expedite some of its portfolio startups into the Nvidia Inception program. The firm launched a $50M AI fund in September 2023.
- Everyone wants to move fast. But you need a strong DevOps foundation to accelerate your AWS workloads & release pipelines. Jump start DevOps with DoiT.*
*This is sponsored content. | | | |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
| |
| |
|
 | UXPin Merge – a UI builder for busy Developers & Designers. Create coded layouts in minutes. | |
|
| |
Comments
Post a Comment