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| Here’s your daily VC briefing: - 📉 VC funding in Asia continued to slide in Q1 while the global venture market saw a small uptick
- 🇪🇸 The European Investment Bank (EIB) is set to back a new VC fund in Spain
- 🎯 Cornerstone Ventures has set a $200M target for its second fund
Thank you. Karan
p/karan-chafekar | |
| 1 | | Startups in Asia bagged $17.3B in VC funding in Q1 2024, per Crunchbase. While VC funding globally witnessed a slight uptick, it continued to slide in Asia, dropping 4% QoQ and 8% YoY. Deal count slumped by 8% QoQ and 22% YoY. More: - Late- and growth-stage startups witnessed the largest dip across all funding stages, plummeting by 43% compared to Q4 2023's tally of $9.6B and 41% from Q1 2023's total of $9.4B to $5.5B in the first three months of 2024.
- Meanwhile, funding for early-stage startups surged by 51% QoQ and 34% YoY to $10.2B.
- Chinese startups dominated the early-stage funding, securing the top three largest funding rounds.
- EV maker Zhiji Automobile raised a $1.1B Series B round, AI startup Moonshot AI bagged $1B, and low-orbit broadband satellite network company Yuanxin Satellite secured $943M in Series A financing.
- Within Asia, Singapore witnessed the biggest QoQ drop in VC funding, falling 54% from $1.7B to $800M in Q1.
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| 2 | | The European Investment Bank's (EIB) venture capital division plans to back a new VC fund in Spain. 
What happened: The new fund aims to invest about €1B ($1.1B) into growth-stage technology startups nationwide. The fund is part of the 2023 European Technology Champions Initiative (ECTI), which received €3.75B ($4.07B) in commitments from the European Union development institution and five member states, including Spain. Relevance: The ECTI has already earmarked €1B ($1.1B) to four funds, including ones launched by Atomico and Keensight Capital. EIB has received applications from 34 VC firms, of which it plans to invest in between 10 to 20 funds. What the numbers say: The new fund comes as VC funding in Europe slumped by 53% to €16.4B ($17.8B) in 2024. The funding slump has been less severe in Spain as the majority of its startups are still in the early stages and were less impacted by valuation cuts. However, there is a scarcity of investors that could back late-stage startups in Spain. | | | |
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| 3 | | B2B enterprise technology-focused VC firm Cornerstone Ventures launched its second fund with a target corpus of $200M. The fund also has a green-shoe option of $50M. Cornerstone's new fund has a 12-year lifecycle and will invest in about 15 to 20 startups developing software platforms and marketplaces for fintech, insurance, retail, consumer goods, e-commerce, supply chain, and healthcare sectors. More: - Initial check sizes will range between $5M to $15M.
- The second fund's target is four times its predecessor, which closed at $50M in 2021.
- Through the first fund, Cornerstone invested in 21 companies, including digital loans and cards platform Credilo, healthcare data-technology platform THB, reverse supply chain management platform Blubirch, and blockchain technology company Dhiway.
- The Department of Promotion of Industry and Internal Trade's Fund of Funds anchored the debut fund.
- Cornerstone claims to have facilitated about $1M to $2M in additional recurring revenue for portfolio startups.
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| 4 | | Last month, Santa Barbara Venture Partners (SBVP) started liquidating shares in portfolio startups on the secondary markets to generate returns for investors amidst a lack of exits due to a stalled IPO market and limited acquisition opportunities. SBVP sold off a quarter of its stake in Bark Technologies and a 10% stake in Rad AI, netting returns of 109% and 142%, respectively. The move will help demonstrate the firm's capability to generate returns as it sets out to raise capital for its second early-stage fund. More: - Traditionally, VCs are hesitant about selling shares in the secondary markets due to difficulties in finding buyers, potential markdowns, and letting go of potentially larger returns at a future date.
- However, several debutant fund managers are increasingly considering the strategy as it might otherwise take them as many as seven years to generate returns from a traditional exit.
Zoom out: - Per Pitchbook, historically, around 63% of early-stage fund managers successfully raised a second fund.
- However, this percentage has declined in recent years, with only 53% of fund managers who debuted in 2019 and 2020 being able to secure a second fund.
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| 5 | | Over the past five years, about 55% of the impact funds were raised by emerging fund managers, per Pitchbook. Despite their dominance in fundraising count, they could only nab 17.8% of the total capital in 2023. In contrast, experienced fund managers bagged 82.2% of the total impact capital. More: - Impact investing segment is still in its nascent stages, with none of the general partners in the sector crossing the fourth fund milestone.
- Last year, global impact-focused investors raised funds worth $43.8B, a third of the record-high of $149.9B from 2022.
- Impact investing fundraising activity fell by 70.8% between 2022 to 2023.
Zoom out: - Experienced fund managers dominated the overall funding environment, bagging 62.3% of the total fund count in 2023.
- Over the past five years, emerging fund managers accounted for 48.6% of the total fund count.
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| 6 | | Today's Funding: Blockchain - Ethereum blockchain developer Monad Labs closed its Series A funding round at $225M. Paradigm led the round that valued the firm at $2B. Electric Capital, Castle Island Ventures, Animoca Ventures, Coinbase Ventures, and CoinFund participated in the round.
Cybersecurity - Data security startup Cyera nearly tripled its valuation to $1.4B while raising a $300M Series C funding round from Spark Capital, Georgian, AT&T Ventures, Sequoia Capital, Accel, Redpoint Ventures, and Cyberstarts.
Healthtech - Mental health technology startup Grow Therapy secured $88M in Series C funding. Sequoia Capital led the round, with additional support from Goldman Sachs Alternatives and PLUS Capital.
- Lab automation robot builder Reshape closed its Series A funding round at $20M. Astanor Ventures led the round, joined by YC, R7, ACME, 21stBio, and Unity co-founder Nicholas Francis.
Transportation - HysetCo SAS, a startup that rents hydrogen-powered EVs to taxi drivers, bagged €200M ($218M) in fresh funding led by Hy24 and supported by Raise Impact and Eiffel Investment Group.
- Transportation-focused edge application startup Platform Science raked in $125M in fresh funding from C.R. England, Cummins, Daimler Truck, PACCAR, RyderVentures, Schneider, and other investors.
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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.*
- AlleyCorp, a VC firm founded by serial entrepreneur Kevin Ryan, secured $250M in commitments towards a new fund. This is the firm's first fund to secure capital from external investors, as Ryan personally funded all of the previous investments. To date, AlleyCorp has invested about $375M in more than 180 companies.
- British grocery supermarket chain Tesco, Australia's Woolworths Group, and Africa's grocery retailer Shoprite jointly launched a $125M venture fund, dubbed W23 Global, to invest in innovative retail startups. In addition to the three, the fund also counts Ahold Delhaize and Empire Company as its partners.
- Verod-Kepple Africa Ventures closed its debut fund at $60M to back 21 growth-stage startups across Africa.
- Early-stage digital health solutions-focused VC firm Define Ventures hired Evolent Health's co-founder and CEO Frank Williams as a venture partner.
- Former PayPal CEO Dan Schulman joined Valor Capital Group in the managing partner role.
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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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