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| Here’s your daily VC briefing: - 🎯 DCVC expects to reach the $400M target for its debut climate-focused fund
- 🚀 Median revenue multiple for AI startups surged to 25.8x
- 📉 Group 11 reported a 16% loss in 2023 due to valuation markdowns of portfolio startups
Thank you. Karan
p/karan-chafekar | |
| 1 | | DCVC expects to close its first climate-focused fund, DCVC Climate Select, at $400M, sources informed TechCrunch. The VC firm is confident about reaching the target after recently receiving a $50M commitment from the New Mexico State Investment Council. More: - Co-founded by Matt Ocko and Zachary Bogue, DCVC typically invests in the deep tech sector.
- The firm broadened its investment thesis after realizing the investment opportunities in climate technologies, tech bio, and robotics.
- Despite this being DCVC's first dedicated climate fund, the firm has already invested $360M from other funds into startups over the last decade.
- DCVC initially planned on raising $500M, per SEC filing documents from the fund's launch in Dec. 2022.
- A year later, the firm lowered the fundraising target to $300M after receiving commitments worth just $157M from limited partners.
Zoom out: - Climate-focused funds have raised about $710M in capital so far this year, per Preqin.
- At the current rate, climate-focused funds could cross last year's tally of $2.17B but might not be able to match the record-high of $2.9B from 2022.
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| 2 | | The median revenue multiple for AI startups has surged to 25.8x, per a new report published by M&A advisory firm Aventis Advisors. 
What the numbers say: The surge can be attributed to the AI funding frenzy since the launch of OpenAI's ChatGPT platform in 2022. In 2023, Series A, B, and C startups in the AI sector bagged median pre-money valuations of $63M, $150M, and $450M, respectively. The median deal sizes have increased by three times in the past seven years. In 2023, median deal sizes of Series A, B, and C funding rounds were $7M, $18M, and $28M, respectively. Relevance: Tech giants have surpassed VC firms as the most active investors in the sector, leveraging AI startup investments to streamline operations, bolster decision-making processes, and add new revenue streams. Microsoft, Amazon, Google, and Intel are the most active corporate investors in the sector. Microsoft committed $10B to OpenAI. Last month, Microsoft announced a long-term partnership with French AI startup MistralAI. Last year, Anthropic received a $4B commitment from Amazon and $2B from Google. Funding for the sector reached a record-high of $93B in 2021. | | | |
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| 3 | | Bitkraft Ventures secured $275M in capital commitments from investors towards its third fund. The Denver, Colo.-based VC firm will use the capital to invest in seed and Series A stage gaming studios and game production platforms. More: - The new fund pushes Bitkraft's assets under management to over the $1B mark.
- Founded by gaming industry veteran Jens Hilgers, the VC firm has backed over 130 startups to date, including gaming studio Frost Giant, in-game ad platform Anzu, Africa-focused mobile gaming platform Carry1st, social platform InWorld, martial arts league platform Karate Combat, and crypto-based game studio Immutable.
- Hilgers said, "The strategy we pursued with the second fund is about 30 to 35 companies, average ticket size about $4M, 50% of the initial capital, and 50% follow-on."
Zoom out: - Per a recent Pitchbook report, VC investments in the gaming industry declined by 72% YoY in 2023.
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| 4 | | Group 11 reported a negative return of 16% in 2023, losing almost $40M, per Calcalistech. Last year's losses bring the total losses incurred by the firm since the beginning of 2022 to $43M. The losses lowered the value of Group 11's assets by $39M to $204M. More: - Most of the losses were due to a drop in valuations of portfolio startups, amounting to $33.6M.
- In addition, the firm experienced a $4M loss due to declining values of stakes held in public fintech companies.
- Group 11 also reported an operating loss of $3.7M.
- The Israeli VC firm invests in fintech startups between seed to pre-IPO stages.
- Notable portfolio startups include digital insurance company Next Insurance, traveltech company Navan, and unicorn startup Tipalti.
- Group 11 sold its stake in Papaya Global at a 90% discount compared to its value at the last funding round.
- The firm had acquired a 3% stake in the firm after investing about $13M.
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| 5 | | Technology-focused VC firm Filter Capital held the final close of its debut fund at $100M (8B rupees). The firm typically invests in Series B to Series C stage startups, writing checks ranging from $7.2M (600M rupees) to $12M (1B rupees). Filter Capital aims to invest in IT services, software, fintech, consumer and B2B tech, financial services, and education sector startups. More: - The Indian investment firm has already invested 30% of the fund's capital in four portfolio companies.
- Filter Capital aims to use the remaining funds to back four to six more startups in the tech services, software, and fintech sectors.
- 60% of the fund's capital came from domestic investors, with the remaining 40% from foreign investors.
- Institutional investors provided about half of the total sum.
- Limited partners that have committed to the new fund include HDFC Fund of Funds, SIDBI, SRI Fund, and Oister Global.
- 75% of the capital is reserved for initial investments and the remaining for follow-on rounds.
- Notable current portfolio companies include enterprise loyalty SaaS firm Capillary Technologies, bus mobility platform Chalo Mobility, logistics firm LoadShare Networks, and healthcare enterprise SaaS firm THB.
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| 6 | | Today's Funding: Computer vision - No-code computer vision AI platform Robovision bagged $42M in Series A funding. Astanor Ventures and Target Global co-led the round at a post-money valuation of $180M.
E-commerce - E-commerce startup ikas raised $20M in Series A funding led by the International Finance Corporation and Re-Pie Asset Management.
Spacetech - Varda Space Industries, a startup manufacturing medicines and other materials in microgravity, closed its Series B funding round at $90M. Caffeinated Capital led the round, with additional backing from Lux Capital, General Catalyst, Founders Fund, and Khosla Ventures.
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| 7 | | Quick Hits: - When it's time to grow your company, make Ohio your competitive advantage with better sites, sharper talent, earlier funding, and less red tape.*
- Apple's former chief designer Jony Ive and OpenAI CEO Sam Altman are in talks with SoftBank, Thrive Capital, Emerson Collective, and other investors to raise $1B for a new unnamed startup, which aims to develop a new AI-powered hardware device.
- Raiffeisen Bank International's (RBI) venture capital arm Elevator Ventures announced a new €70M ($76M) fund. The EV II fund will invest between €1M ($1.1M) to €3M ($3.25M) in Series A to Series B stage startups within the fintech, AI, cybersecurity, and green transformation sectors.
- India's leading investment bank Avendus plans to raise a $300M fund. The firm raised its $50M debut fund and followed it up with a $185M second fund in 2021.
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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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