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| Here’s your daily VC briefing: - 🌎 VC funding for Latin American startups slumped by 39% QoQ
- 💰 Poor distributions of VC funds are stifling fundraising activity
- 📉 Indian social media startup Sharechat’s valuation plummetted to less than $2B
Thank you. Karan
p/karan-chafekar | |
| 1 | | The first quarter of 2024 saw a significant decline in funding for Latin American startups, with a total of $579M invested across seed to growth-stage rounds, representing a 17% decrease from a year ago and a 39% drop from the previous quarter. Fintech emerged as the favorite sector in the recent quarter, bagging the top four deals. Colombia experienced a surge in investment, while Brazil and Mexico faced steep declines. The number of deals also fell, with only 111 seed-through growth-stage rounds reported in Q1. More: - Brazilian startups raked in $223M in total funding this quarter, while Mexican startups bagged $33M.
- Financial and accounting tasks automation firm Simetrik's $55M Series B, electronic payments firm Bold's $50M Series C, corporate card and expense management platform Conta Simples $40M Series B, and payment technology company Pomelo's $40M Series B rounds were the top funding rounds to close in the recent quarter.
- VCs invested over $7B into Latin American startups in a single quarter in 2021, setting the record for the highest quarterly total.
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| 2 | | The slow pace of distributions in the venture capital industry is stifling fundraising activity, per Pitchbook. 
What the numbers say: Distributions, which refer to returns on investments for limited partners, have slowed down due to a lack of exits, limiting the capital available with limited partners to be reinvested in new funds. So far this year, 100 venture funds have secured commitments worth just $9.3B. What happened: Due to the poor exit environment, VCs have been unable to translate theoretical paper gains into tangible cash distributions. While the recent IPOs of Reddit and Astera Labs, which accounted for about three-fourths of the total $18.4B exit value generated in Q1 2024, have been a success, their ability to revive the frozen IPO market remains to be seen. | | | |
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| 3 | | Lakestar, a VC firm known for backing Revolut and Spotify, secured $600M in capital commitments towards two new funds. $280M has been earmarked for the Lakestar Early IV fund and $320M for the Lakestar Growth fund. The former aims to back about 20 to 25 seed to Series A stage startups, while the Growth fund will invest in 10 to 12 Series B rounds and later. The Switzerland-based VC firm will focus on sectors such as AI, digitalization, deep tech, healthcare, and fintech across geographies, with a particular emphasis on Europe. More: - The firm has already backed energy supplier Fuse Energy, preventative healthcare technology firm NEKO Health, AI text-to-video platform Colossyan, and embedded finance solution Swan with the new funds.
- The new funds pushed Lakestar's assets under management over the €2B ($2.13B) mark.
- Lakestar has backed 137 startups to date, 24 of which have turned into unicorns, including travel startup GetYourGuide, health insurtech firm Alan, and transport booking platform Omio.
- Due to global headwinds, the firm took three years to raise the new funds, both of which were incorporated in 2021.
- Lakestar's first early-stage fund has an IRR of just under 10%, while all other funds have an IRR ranging between 22% and 44%.
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| 4 | | Indian social media startup ShareChat's valuation plunged below the $2B mark in a recent funding round, sources informed TechCrunch. ShareChat reportedly raised a $49M convertible round. The firm has strongly denied the valuation cut, but sources claim that the debt will convert into equity at a $2B valuation in the next equity funding round. The valuation markdown comes despite doubling the revenue and cutting expenses. ShareChat was previously valued at $4.9B in mid-2022. More: - Existing backers, including Lightspeed, Temasek, Alkeon Capital, Moore Strategic Ventures, and HarbourVest, participated in the current round.
- Over the past two years, the company has managed to reduce its monthly cash burn by 90%.
- ShareChat, which boasts 400M users, has raised $3.1B in total funding to date from Google, X, Snap, Tiger Global, Tencent, and other investors.
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| 5 | | Former Catalant co-CEO Rob Biederman's VC firm Asymmetric Capital Partners is looking to raise $125M for its second fund. The VC firm aims to back startups in the software, marketplaces, health IT, and fintech sectors. The firm typically writes checks ranging from $500,000 to $2M in pre-seed stage startups. Asymmetric is known to double down on startups with additional investments ranging from $1.5M to $4M. More: - Asymmetric's portfolio consists of about 60 companies.
- In Q4 2023, 80% of the firm's total investments went to startups based in Boston or New York.
- Asymmetric closed its debut fund at $105M two and a half years ago.
- The debut fund received backing from Bain Capital's former managing director, Mark Nunnelly.
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| 6 | | Today's Funding: Blockchain - DeFi-focused Layer 1 blockchain startup Berachain raised a Series B round of $100M led by Brevan Howard Digital and Framework Ventures. Other participants in the round include Polychain Capital, Samsung Next, Hack VC, Animoca Brands, and Hashkey Capital.
Insurtech - Brazilian digital insurance startup Akad Seguros closed its Series A funding round at $22.5M. Valor Capital Group led the round, with additional backing from Across, Endeavor Scale-Up Ventures, Endeavor Catalyst, and Actyus.
- Agriculture insurance startup Pula bagged $20M in Series A funding led by global investment manager BlurOrchard. Other investors participating in the round include IFC, the Bill & Melinda Gates Foundation, and Hesabu Capital.
Materials - Building insulation materials startup CleanFiber secured a $28M Series B funding round led by Spring Lane Capital. In addition, the firm also bagged a $31.5M project financing facility. Ahlström Invest, AXA Investment Managers, Climate Innovation Capital, and Tokyu Construction/Global Brain participated in the round.
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- Schroders Capital Global Innovation Trust marked up the value of its stake in fintech startup Revolut from £5.44M ($6.8M) a year ago to ($9.8M) at the end of December. The surge in valuation improves Revolut's implied valuation by 45%, from $17.7B to $25.7B. Schroders attributed the markup to "solid progress" in the last year and its ambitious international expansion strategy.
- Regeneron Pharmaceuticals established its venture capital division, dubbed Regeneron Ventures. The pharmaceutical company has committed $100M annually for a period of five years. The newly formed VC division will invest in biopharmaceutical, healthcare, and health technology startups.
- Lightspeed Venture Partners' India subsidiary witnessed the departures of two top executives last month, namely Vaibhav Agrawal and Abhishek Nag. Nag joined 360 One, while Agrawal is reportedly planning to set up his new venture firm.
- Former Formula One champion Nico Rosberg secured commitments worth €30M ($31.9M) for the debut fund-of-funds launched by his VC firm Rosberg Ventures. The firm expects to reach a final close of €75M $79.9M) by the end of this year.
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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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