The Road Ahead
With a steep contraction in later-stage funding across all industries, except AI, seed-stage deals have been least impacted by public markets. The S&P is up 11% YTD and 10% off its peak from December 2021, meanwhile, early-stage pre-money valuation ranges have ticked up 30%. New VC investment into fintech has been concentrated at the early-stages (Seed and Series A).
Market Insights
LPs say venture capital ‘may not be worth the risk’ in 2023: Preqin (Fortune)
The VC funding market is showing signs of improvement – but not for everyone (Carta)
Crossover investors dip their toes back into venture with pre-IPO secondaries (Pitchbook)
Battle of the funds: Do VC specialists outperform generalist? (PitchBook)
VC-backed IPOs now average sub-8x revenue multiples amid economic conditions favoring more modest valuations, according to Pitchbook, marking a considerable decline from the 2021 peak of 24x. This indicates investors may be moving away from a historical preference for growth over profitability. Instacart, for example, has a $9.3 billion target valuation for its IPO, down from its 2021 peak of $39 billion (Pipe Newsletter)
Startups shutting down: highest number of shutdowns yet in Q3 2023 (LinkedIn – Peter Walker)
VC Fundraises
Lowercarbon raises $550 million, blasts VC rivals for taking “blood money” (Axios)
Dawn Capital defies venture capital downturn with $700M fund (CNBC)
VC firm Fuse closes $250M fund to invest in Pacific Northwest startups (TechCrunch)
Industry Ventures has $1.7 billion more for secondary stakes and tech buyouts (TechCrunch)
Mercury Fund closes largest fund to invest in SaaS startups between the coasts (TechCrunch)
Editorial
New York is a tech startup hotbed after almost a decade-long run of IPOs (CNBC)
When the valuation hangover finally hits (Janelle Teng – Bessemer Venture Partners)
Why we’re seeing so many seed-stage deals in fintech (TechCrunch)
Notable Capital Raises
Alza emerges from stealth to offer affordable and inclusive financial tools to immigrants (TechCrunch)
Brazil’s Mottu closes $50M Series C to expand its last-mile logistics ecosystem (PR Newswire)
Swan secures $40 million to bring embedded banking to Europe (TechCrunch)
ZayZoon, which lends employees money for a fee, raises $34.5M (TechCrunch)