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| Here’s your daily VC briefing: - 🥇 Andreessen Horowitz emerged as the most active investor in Q1
- 📉 One-year rolling IRR for U.S. VC funds stabilized at the -10% mark in Q3 2022
- 💰 Toyota allocated $300M to its VC arm in order to back climate tech and frontier technology startups
Thank you. Karan
p/karan-chafekar | |
| 1 | | Andreessen Horowitz emerged as the most active investor so far this year, participating in 27 post-seed stage startup funding rounds in Q1 2024, per Crunchbase. Andreessen Horowitz's deal count in Q1 fell just one deal short of its tally of 28 deals from the same time last year. In addition to being the most active investor, Andreessen Horowitz led or co-led the most deals in Q1, sharing the top spot with Lightspeed, with 11 deals each. More: - Y Combinator held the second spot in the list of most active investors with 18 post-seed deals.
- General Catalyst came in at third position, participating in 15 rounds.
- Although the majority of Andreessen Horowitz's investments were focused on the U.S., it led two investments in foreign startups during Q1 2024.
- Q1 2024 witnessed a significant drop in deals closing above the $300M mark, with only 20 such deals recorded, a sharp decline from the peak of 100 deals in Q4 2021.
- Notably absent from the list were two prominent investors, Tiger Global Management and SoftBank Vision Fund, both of which have significantly curtailed their capital deployment after incurring losses.
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| 2 | | The one-year rolling internal rate of return (IRR) metric for U.S. VC funds stabilized at the -10% mark in Q3 2022, per Pitchbook. 
What the numbers say: While the IRR has recovered from the rock-bottom of -17.9% in Q4 2022, fund returns still remain negative due to portfolio markdowns, which particularly impacted late-stage startups. The revival in returns should help general partners that are about to close new funds. Relevance: Typically, VCs use revenue multiples of comparable public companies to adjust the valuations of portfolio startups. However, private startup valuation repricing typically lags compared to their publicly listed counterparts. As a result, the positive performance of stock markets is not reflected in private startup valuations yet. The Nasdaq composite witnessed a 43% gain in 2023, thanks to the stellar performance of a handful of mega-cap stocks, including Microsoft, Alphabet, and Nvidia. | | | |
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| 3 | | Japanese automotive giant Toyota Motor Corp. allocated $300M to its venture capital arm, Toyota Ventures. The amount is split evenly between the Toyota Ventures Frontier Fund II (TVFF II) and Toyota Ventures Climate Fund II (TVCF II). Toyota aims to use the capital from the TVCF II fund to back early-stage climate tech startups. Meanwhile, the funds from the TVFF II will be invested in startups working on frontier technology, including generative AI, robotics, mobility, cloud services, and quantum computing. More: - The latest capital infusion pushes Toyota Ventures' total assets under management to over the $800M mark.
- Since its founding in 2017, Toyota Ventures has backed 75 startups, including hydrogen startup Ecolectro, satellite servicing firm Starfish Space, biosensor maker Scentian Bio, energy storage firm e-Zinc, carbon capture startup Air Company, and quantum computing software company Haiqu.
- Portfolio eVTOL startup Joby Aviation's IPO debut last year contributed significantly to Toyota Ventures' profitability.
- Partner David Sokolic will lead the new Frontier Fund, while Lisa Coca will lead the Climate Fund.
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| 4 | | Airtree Ventures bagged a 1.4x return on the entire Fund I after diluting part of its stake in graphic design firm Canva through a secondary market transaction. The Australian VC firm has still maintained the majority of its original stake. More: - Airtree participated in Canva's $6M Series A funding round in 2015.
- The strategy to dilute part stakes at regular intervals through secondary market transactions ensures that Airtree can generate consistent returns throughout the fund's lifecycle, reducing its dependence on traditional exits such as IPOs and M&As.
- The company started incorporating this strategy in 2021 when it liquidated part of its stake in Canva, which was then valued at $39B.
- Co-founder and partner Craig Blair said, "We look at the position of the fund and the role of that company in that fund [and think], 'If we sold today at that price, what sort of future value are we giving up that we could hold? [What is] the value of liquidity versus long-term TVPI and the effect on the fund?'"
- Other notable unicorn startups in Airtree's portfolio are Immutable and LinkTree, which were last valued at $2.4B and $1.3B, respectively.
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| 5 | | Athena Capital, a women-led venture capital firm, aims to raise $500M for its first growth-equity fund. The fund aims to invest in healthtech, AI, machine learning, and quantum computing sectors. The fund will primarily invest in late-stage startups that are ready to debut on the public markets or get acquired by larger companies. More: - Fundraising started in January, with Athena expecting to hold the first close of the fund in July.
- In addition to minority equity bets, the firm will also provide financing through structured equity, convertible notes, and other debt instruments.
- Initial check sizes will range from $10M to $35M.
- Athena will seek co-investment partners in order to write larger checks in promising startups.
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| 6 | | Today's Funding: Biotech - Deep Track Capital led a $158M Series B-2 funding round into clinical-stage biotech startup TORL BioTherapeutics. Investors participating in the round include RA Capital Management, Perceptive Advisors, Avidity Partners, Goldman Sachs Alternatives, Bristol Myers Squibb, Vertex Ventures HC, Blue Owl Healthcare Opportunities, and others.
Crypto - Bitcoin mining equipment maker Auradine bagged $80M in Series B funding from StepStone Group, Top Tier Capital Partners, MVP Partners, and Maverick Capital.
Fintech - Finance and accounting operations platform FloQast closed its Series E round at $100M. ICONIQ Growth led the round with additional support from Meritech Capital, Sapphire Ventures, BDT & MSD Partners, and World Innovation Lab. The fintech startup was valued at $1.6B at the round.
Healthtech Proptech - Guesty, a property management platform for accommodation managers, secured $130M in Series F funding at a $900M post-money valuation. KKR led the round, joined by Apax Funds, Inovia, BDT & MSD Partners, and Sixth Street.
Robotics - Robotics startup Collaborative Robots raised a $100M Series B funding round led by General Catalyst. Sequoia Capital, Khosla Ventures, Neo, 1984 Ventures, MVP Ventures, Calibrate Ventures, and Industry Ventures participated in the round.
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| 7 | | Quick Hits: - Thinking about growing your business? We'll work as hard as it takes to make Ohio your competitive advantage.*
- The New York State Common Retirement Fund committed $150M to B Capital's Opportunities Fund II, which closed at about $750M in March.
- Cendana Capital and Kline Hill Partners closed its new Kline Hill Cendana Partners Fund at $105M, surpassing its initial target of $75M. The duo will use the capital to scoop up discounted venture funds and portfolio startup stakes being liquidated by limited partners.
- Edtech-focused VC firm hired DreamBox Learning's former CEO and president, Jesse Wooley-Wilson, as its operating partner.
- French VC firm Quantonation Ventures held the first close of its second fund at €70M ($75M). The second fund will back early-stage startups working on quantum technologies. Quantonation expects to close the fund at €200M ($214M).
- Early-stage VC firm Floating Point closed its second fund at $70M to back startups focused on complex sectors.
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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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