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| Here's your daily VC briefing: - 🌏 Southeast Asian B2C startups bagged the largest share of VC funding in 2023.
- 💰 AI funding frenzy helped Zero Prime Ventures close its second fund at $48M.
- 🚀 Astera Labs' stocks surged 72% by the end of their first day of trading.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Southeast Asia's B2C startups bagged the largest share of VC funding in 2023, ending the year with $4.2B capital, per Pitchbook. Consumer-focused startups raked in 36.5% of the total funding deployed in the region. More: - The B2C sector displaced software as the most funded sector in the region.
- VC funding for the sector increased 31.3% compared to the previous year.
- The surge in funding can be attributed to the rising demand for consumer products and services due to the region's growing internet usage, emerging middle-class population, and rapid pace of urbanization.
- Within Southeast Asian countries, smartphone adoption has increased to 90% in Singapore and 83% in Indonesia.
- Due to the increased internet connectivity, the region is witnessing a surge in the number of mobile apps for e-commerce, food delivery, and ride-hailing services.
- VCs want to capitalize on this growing demand for B2C services in hopes of generating substantial returns on investment.
- Notable deals from the region that closed last year include fast fashion giant Shein's $2B Series G round and e-commerce company Lazada's $634M funding round.
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| 2 | | Zero Prime Ventures bagged $48M in capital commitments from investors towards its second fund. What the numbers say: The oversubscribed fund was more than triple the size of the firm's first fund, which closed at $15M in 2020. The second fund exceeded the initial target of $30M and the revised target of $45M. Foundation Capital, Bain Capital Ventures, Sequoia Capital, Founders Fund, and AngelList are the limited partners contributing to the new fund. Relevance: Zero Prime's latest fund aims to back AI startups at the earliest stages. The firm has already backed AI applications deployment and testing firm Honeyhive, AI applications template provider Phidata, and productivity-focused generative AI tools maker Hunch. Zero Prime hired Speedinvest's principal, Yang Tran, to manage the new fund. Initial investments from the second fund will average about $1.5M, with the firm expecting to lead more rounds. 
Where to see the impact: Due to the recent AI funding frenzy, AI and machine learning startups bagged 35% of the total VC funding invested in U.S. startups, per Pitchbook. The share of VC funding invested in AI and ML startups increased from about 22% in each of the prior three years. | | | |
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| 3 | | AI chip firm Astera Labs' shares prices closed their first day of trading at $62.03, representing a gain of 72%. The Santa Clara, Calif.-based firm priced the shares at $36 each, higher than its revised range of $32 to $34. Astera bagged $604.4M in gross proceeds from its public markets debut, while its shareholders netted an additional $108.4M. The IPO marks a massive windfall for its two largest stakeholders, Sutter Hill Ventures and Fidelity Management and Research, who have a 12.6% and 6.4% stake in the company, respectively. More: - Sutter's stake in Astera is valued at $1.4B, while Fidelity's stake is worth $706M.
- The AI firm ended the trading day with a market cap of about $11B, representing a 95x multiple over Astera's last year's revenue of $115.8M, up 45% YoY.
- The market cap is also about three times its peak valuation of $3.15B from 2022, when it raised a $150M Series D round led by Fidelity.
- Astera's net losses narrowed from $58.3M in 2022 to $26.3M in 2023.
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| 4 | | Reddit and its shareholders raised $748M from its IPO debut, selling 22 million shares priced at $34 each, per Bloomberg. The shares were priced at the top end of its pricing range of $31 to $34. The IPO debut prices gave Reddit a market value of $5.4B, but its fully diluted market cap is about $6.4B. More: - Reddit's market cap is still lower than its peak valuation of $10B in 2021 when it first confidentially filed for an IPO.
- Despite the lower valuation, the IPO could still provide large returns to investors.
- OpenAI chief Sam Altman owns shares worth $413M at IPO price through VC fund Hydrazine Capital II and several SPAC vehicles managed by Apollo Projects.
- Advance Magazine Publishers owns 30.1% of total outstanding shares, Fidelity Management & Research has 8.4%, Tencent has 11%, Vy Capital owns 5.1%, and Quiet Capital and Tacit Capital together have 6.8%.
- The social media network reported a net loss of $91M on revenue of $804M in 2023.
- Losses narrowed in 2023 compared to the $159M net loss on $667M revenue from 2022.
Zoom out: - Reddit's IPO topped the two most recent listings of Instacart and Klaviyo, which managed to raise $660M and $659M last September, respectively.
- So far this year, businesses have raised about $8.7B from their IPOs on U.S. exchanges.
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| 5 | | OTB Ventures closed its oversubscribed second deeptech fund at $185M, higher than its initial target of $150M. The fund aims to back 15 to 20 space tech, enterprise automation, cybersecurity, and fintech infrastructure startups at the Series A stage. 10% capital from the fund has been set aside to invest in seed stage startups and another 50% for follow-on capital to double down on portfolio startups. More: - The €1B ($1.1B) NATO Innovation Fund backed OTB's second fund.
- Other limited partners contributing to the fund include the European Investment Fund, Isomer Capital, Foundation for Polish Science, TDJ Venture, and others.
- OTB aims to write checks ranging from $1M to $7M.
- The European VC firm has already backed nine startups from the second fund, including productivity and task management platform KYP.ai, AI chip manufacturer SEMRON, and space debris removal firm ClearSpace.
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| 6 | | Today's Funding: Biotech - Clasp Therapeutics, a startup developing immunotherapies to treat tumors, raised $150M in Series A funding led by Novo Holdings, Third Rock, and Catalio.
- In vivo RNA technology biotech startup Capstan Therapeutics closed its Series B funding round at $175M. RA Capital Management led the round, with additional support from Forbion, Johnson & Johnson Innovation, Mubadala Capital, Perceptive Advisors, and Sofinnova Investments.
- Swiss immuno-oncology startup Nouscom extended its Series C round to €75.8M ($82M) with €7M ($7.6M) in additional funding from Angelini Ventures.
- Bain Capital led a $45M Series B round into Loyal, a biotech startup developing longevity drugs for dogs. New investor Valor Equity Partners and returning investors Khosla Ventures and First Round Capital participated in the round.
Cleantech - Carbon accounting software startup Greenly secured $52M (€48M) in Series B funding led by Fidelity International Strategic Ventures. Benhamou Global Ventures, Move Capital, Hewlett Packard Enterprise, and HSBC participated in the Series B round, along with existing investors XAnge and Energy Impact Partners (EIP).
Transportation - Electric boat maker Candela raked in $25M in fresh funding led by Beneteau. EQT Ventures, Ocean Zero, and Kan Dela AB joined the funding round.
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- Enterprise-focused AI model developer Cohere is looking to raise $500M in fresh funding at a valuation of $5B, sources informed Reuters. The target valuation is more than double compared to Cohere's previous valuation of $2.2B from last June, when it raised a $270M round from Inovia Capital, Nvidia, and Oracle.
- Haun Ventures hired Anchorage Digital's president and co-founder Diogo Mónica as its new general partner.
- Former Techstars Seattle leader Isaac Kato established a new VC firm called Two Ravens. The firm plans to raise $20M for its first fund, per SEC filings seen by GeekWire.
- Sameer Brij Verma is set to leave VC firm Nexus later this year to start his own VC firm, which is reportedly launching with a $150M fund, sources informed TechCrunch.
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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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