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| Here’s your daily VC briefing: - ✂️ VNV Global marked down its stake in Wasoko by 48%
- 📊 Limited partners are uncertain about the crypto market hype
- 🚀 Morgan Stanley’s Kevin Swan expects secondary markets to rebound this year
Thank you. Karan
p/karan-chafekar | |
| 1 | | Secondary market transactions are "picking up" as the valuation spread has improved, Morgan Stanley's co-head of global private markets, Kevin Swan, told Crunchbase. The secondary markets could rebound this year after a two-year lull, considering the influx of dedicated secondary funds and the investment opportunities presented by strong mature companies. Payments giant Stripe recently facilitated a secondary market transaction for employees and investors, which saw its valuation surge by 30% to $65B. More: - Carta's senior corporate coverage manager, Luke Kirrane, noticed that the average transaction value fell from $50M-$60M a few years ago to less than $10M.
- Last year, about 40% to 50% of the deals were structured as buybacks, per Kirrane.
Zoom out: - Crunchbase estimates that secondary funds totaled nearly $118B last year, with several investors launching dedicated vehicles to capitalize on the market opportunity.
- Last year, Industry Ventures closed its Secondary X fund at $1.5B.
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| 2 | | While VC firms are trying to raise new funds to capitalize on the recent crypto market bull run caused by the rally in Bitcoin prices, limited partners are unsure about the hype, wary of past lessons learned from the most recent implosions of Three Arrows Capital and FTX in 2022. 
What the numbers say: Crypto-focused VCs raised funds worth $5.8B last year, per Galaxy Digital. Fundraising slumped last year after touching $20B in 2021 and $38B in 2022. Crypto-focused VCs are struggling to raise new funds due to a crowded market where differentiation is difficult. "Too many venture capital firms in the space are raising at the moment and the competition is really high, but the demand isn't as strong as it once was, so they are struggling," notes L1 Digital AG's managing partner Ray Hindi. Relevance: Despite the current market hype, the actual distributed to paid-in capital (DPI) metric for many funds with 2021 vintage is still at zero. This is putting pressure on funds to deliver tangible DPI returns, with some LPs expecting payouts by the end of 2024. Limited partners are scrutinizing funds' ability to generate actual payouts versus just rising paper valuations from the market rally. | | | |
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| 3 | | Celestial AI, a startup developing semiconductors with higher bandwidth and memory capacity for AI applications, raised $175M in Series C funding. This capital infusion will help Celestial execute several large-scale customer collaborations to commercialize its Photonic Fabric technology. The Photonic Fabric technology is an optical connectivity solution that promises about 25x greater bandwidth and memory capacity while reducing latency and power consumption by 10x compared to existing products. More: - U.S. Innovation Technology Fund led the Series C round with additional backing from AMD Ventures, Temasek, IAG Capital Partners, Samsung Catalyst, Smart Global Holdings, Porsche Automobil Holding SE, M-Ventures, Tyche Partners, and Koch Disruptive Technologies.
- Celestial's notable customers include Microsoft, Meta Platforms, Amazon.com, and Google.
- The latest round brings the firm's total capital raised to date to $340M.
- Last summer, Celestial bagged a $100M Series B round.
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| 4 | | Swedish investment firm VNV Global marked down its stake in African B2B e-commerce startup Wasoko by 48%. The move dropped the value of VNV's 4.2% stake in Wasoko to $10.9M. Wasoko's implied valuation after the markdown was $260M, roughly half compared to its $501M valuation from Q4 2022. More: - The Nairobi-based B2B grocery marketplace operated in seven African countries in 2022, generating about $300M in gross merchandise value (GMV).
- Last year, the firm shuttered its operations in Senegal and Ivory Coast while temporarily halting services in Uganda and Zambia.
- It is currently focussing on its three largest GMV markets: Kenya, Rwanda, and Tanzania.
- Wasoko was valued at $625M when it raised a $125M Series B round co-led by Tiger Global and Avenir in March 2022.
- VNV, previously known as Vostok New Ventures, contributed $20M in the round.
- In Dec. 2023, Wasoko announced its merger with its Egyptian counterpart MaxAB.
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| 5 | | Inflows to venture capital trusts surged by 18.8% YoY in the four weeks before March 25, per data from Wealth Club seen by Financial Times. Investors allocated £144.5M ($182.5M) to the asset class ahead of the tax year-end on April 5, eyeing the opportunity to get 30% income tax relief on investments up to £200,000 (~$252,500). More: - Investors need to hold on to the investments for five years to qualify for the tax benefits.
- VCTs are listed on the London Stock Exchange, giving investors the flexibility to exit the asset class by selling their investments back to the fund manager or to other investors on the exchange.
- VCTs from Baronsmead and Pembroke have filled up about 93% and 71% of their fund, respectively.
- While investments surged, the overall inflows for the entire tax year are still down by 19.8% to £730M ($921.9M).
- Generalist VCTs have on average generated about 28.11% returns over the past five years.
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| 6 | | Today's Funding: Biotech - Oncology therapeutics startup Avenzo Therapeutics closed its Series A-1 funding round at $150M. New Enterprise Associates, Deep Track Capital, Sofinnova Investments, and Sands Capital led the round, with additional support from INCE Capital, TF Capital, Delos Capital, and Quan Capital.
Fintech - British regulatory compliance startup Global Screening Services secured $47M in fresh funding from the Commonwealth Bank of Australia, Cynosure Group, and AlixPartner.
- Advisory and audit services startup Fieldguide raised $30M in Series B funding led by Bessemer Venture Partners.
Healthcare - Telemental health firm Brightside Health raked in $33M in Series C funding led by S32, with additional support from Time BioVentures, ACME, Mousse Partners, and Triventures.
Insurtech - Indonesian insurtech firm Qoala bagged $47M in Series C funding co-led by PayPal Ventures and MassMutual Ventures. New investors MUFG Innovation Partners and Omidyar Network participated in the round, along with returning investors Flourish Ventures, Eurazeo, and AppWorks.
Software - Cloud-based open-source software platform developer Viam closed its Series B funding round at $45M. Investors participating in the round include Union Square Ventures and Battery Ventures.
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| 7 | | Quick Hits: - Pattern released a 30-page insights report for beauty brands selling on Amazon.*
- Chiratae Ventures received a windfall of $70M after selling off some portfolio company stakes to Madison India Capital through a secondary transaction. The Indian VC firm divested stakes in Lenskart, Bizongo, and Rentomojo.
- HSBC has earmarked $150M to back early-stage startups in Singapore from the $1B Asean Growth Fund to help scale businesses in the region's digital economy.
- Women-led VC firm Dcode Capital received commitments worth $19M from 23 investors towards its debut fund, which the firm expects to close at $30M.
- Bioscience-focused VC firm Breakout Ventures hired Sridhar Iyengar, Coco Krumme, Rebecca Nugent, Walter Solomon, and Ilan Zipkin as venture partners to lead the due diligence on new investments and advise portfolio startups on product development and commercialization strategy.
- Healthcare-focused VC firm HealthQuad received a return of 4x while exiting its investment from the Asian Institute of Nephrology and Urology.
- Ready to get your AWS cloud spend under control? Learn how to effectively audit and reduce AWS costs today..*
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Karan Chafekar | |
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