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| Here’s a look at today’s VC briefing. - 🇺🇸 Klarna is gearing up for an IPO listing in the U.S.
- 📉 VC funding for Black-founded startups slumped by 71% YoY in 2023.
- 🛍️ Shein is considering a U.K. listing amidst regulatory pushback in the U.S.
Thank you. Karan
p/karan-chafekar | |
| 1 | | Swedish fintech startup Klarna is gearing up for an IPO listing in the U.S., which could happen as soon as the third quarter of this year. The firm is eyeing a $20B valuation at the IPO, about half its peak valuation of $45B in 2021. Nevertheless, the target valuation is much better than its most recent valuation of $6.7B from 2022. More: - Klarna's listing has the potential to become the largest listing in the U.S. this year.
- After four years of losses, the buy-now-pay-later startup returned to profitability in Q3 2023.
- It has been profitable in the U.S. for four consecutive quarters.
- Klarna gets its largest revenue share from the U.S., where it has more than 37 million customers.
- It caters to about 150 million customers globally and handles approximately 2 million daily transactions across 45 nations.
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| 2 | | For the first time since 2016, VC funding for Black-founded U.S. startups failed to cross the $1B mark in 2023, per Crunchbase. 
What the numbers say: Black-founded startups raised just $705M in VC funding last year. VC funding for Black-founded startups dropped by 71% YoY, significantly higher than the 37% dip in overall U.S. venture funding. Out of the $140.4B VC funding deployed in U.S. startups, Black-led startups received just 0.5% of the share. The share of funding was 1.4% in 2021 and 1.1% in 2022, despite several VC firms and strategic investors pledging to increase funding for diverse founders four years ago. Relevance: Early-stage and late-stage startup funding dropped by 73% and 74%, respectively. The drop was slightly gentler for angel and seed-stage startups, which saw a 51% drop compared to 2022. Only one startup was able to raise more than $100M funding round. Investment management platform Juniper Square secured a $133M funding round led by Owl Rock. What happened: Incubation center TechSquare Labs' co-founder Paul Judge believes that Black-founded startups should receive about $18B in VC funding, considering they make up 13% of the U.S. population. Judge adds, "Minority-led companies consistently outperform," often having high cash efficiency and low burn rate. Investors have not realized the return potential of backing startups led by founders from diverse backgrounds. | | | |
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| 3 | | The Financial Times set up its VC division to back media and tech startups that align with the interests of the broader FT Group. The newly formed division, FT Ventures, has already invested in a future-of-work media startup, Charter. FT Group allocated £30M ($38M) capital for the investments through its balance sheet. More: - The firm will invest in media, data, intelligence, and technology startups.
- FT Ventures will take over the firm's previous strategic minority investments, including its investment in the Business of Fashion.
- However, larger investments where FT takes a controlling stake will still be made through the FT Group.
Zoom out: - FT Ventures is participating in a $1M round being raised by Charter, which adds to its existing $3M seed round.
- Bloomberg Beta and Precursor Ventures are also participating in the round along with FT Ventures.
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| 4 | | Chinese fast fashion startup Shein may list in the U.K. amidst fears that it may fail to receive approval from the U.S. SEC to list in New York. U.K.'s finance minister, Jeremy Hunt, met up with Shein's chairman, Donald Tang, to persuade the company, although the firm's first preference is the U.S. Earlier this month, U.S. Senator Marco Rubio urged the SEC to block Shein's listing in the U.S. unless the firm provides additional disclosures about its operations. More: - Shein had confidentially filed for a U.S. IPO in November last year.
- Per reports, the firm was targeting an IPO valuation of between $80B and $90B.
- At the time, Shein's valuation had dropped by a third from the peak of $100B to about $66B when it raised a $2B funding round last May.
Zoom out: - If Shein does list in the U.K., it might be the second-largest listing held at the London Stock Exchange after Glencore International's debut.
- Several British companies, including chipmaker Arm, have gone public on foreign shores, causing a dip in public listings in the U.K.
- Arm debuted on Nasdaq at a valuation of £48.5B ($61.5B).
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| 5 | | Zacua Ventures secured $56M in capital commitments towards its inaugural fund, which aims to invest in early-stage startups in the construction technology sector. The fund closed above its initial target of $50M. More: - Zacua will invest in startups addressing sustainability, productivity, and urbanization challenges in the construction sector.
- The debut fund received backing from 19 companies from across the globe, including construction management software maker Procore, truck and bus maker Volvo, and sustainable construction materials firm Cemex.
- Zacua has already backed over a dozen construction startups from the debut fund.
- It recently led a $9M seed round into data infrastructure startup Flexnode.
- Another portfolio startup is Construex, a startup developing a SaaS marketplace for the construction and design industries.
- Hilti Corp.'s executive Vivin Hegde founded Zacua in 2022, along with Cemex Ventures' executives Mauricio Tessi Weiss and Juan Nieto.
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| 6 | | Today's Funding: AI - AI-powered enterprise search engine Glean Technologies secured $200M in Series D funding at a $2.2B valuation. Kleiner Perkins and Lightspeed Venture Partners led the round, with additional backing from venture capital divisions of Databricks, Workday, and Capital One Financial Corp.
- Lightspeed led a $64M Series B funding round into Intenseye, an AI startup that prevents workplace accidents. Existing backers Insight Partners, Point Nine, and Air Street Capital participated in the round.
Agtech Graphic design - French photo-editing generative AI startup Photoroom raised a Series B round worth $43M led by Balderton Capital and Aglaé Ventures. Y Combinator backed the round, which valued the firm at around $500M.
- Greylock and DST Global co-led a $30M Series A round into the photo-sharing platform Lapse. Existing investor GV participated in the round.
Software - Underground mapping software maker Exodigo raised $105M in Series A funding, which includes $75M in fresh funding and $30M from SAFEs from the seed round that were converted into equity. Greenfield and existing investor Zeev Ventures co-led the round, with additional backing from SquarePeg, 10D VC, JIBE, and National Grid Partners.
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| 7 | | Quick Hits: - Discover the trends shaping 2024 and learn how trust will be the key to business success. Shape your strategy and get ahead with this latest report.*
- Early-stage VC firm Pari Passu Venture Partners launched the PariPassu initiative, which will help founders and accredited individual investors to co-invest in startups alongside top VC firms, including Sequoia Capital, Upfront Ventures, and Sierra Ventures.
- Seed stage VC firm Homebrew is raising a $50M fund, per SEC filing documents seen by VCWire.tech.
- Qatar Emir Sheikh Tamim Bin Hamad Al Thani pledged to invest €10B ($10.9B) into French startups and funds from 2024 to 2030. The fund will be primarily directed towards energy transition, semiconductor, aerospace, AI, health, and tourism sectors.
- Saudi Arabia-based investment firm CoreVision acquired a strategic stake in investment management platform VeFund to increase access to the startup community and provide AI technology to its portfolio companies.
- Visa and Mastercard have come to a historic $5 billion settlement, marking a pivotal moment for small business owners. If your business accepts Visa/MC, Claim your share today.*
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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