Databricks Co-founder Launched VC Fund & KKR Acquired Indian Medical Device Startup at $1 Billion

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👋 Hey, Sahil here! Welcome to today's quick rundown in the Venture Daily Digest Newsletter. I've got the scoop on startup fundraising, fresh VC funds, and some cool tech – all in just 5 minutes! Today’s major updates include -

• Pete Sonsini, an early investor in Databricks, is launching a new venture capital firm by collaborating with Databricks co-founder Andy Konwinski.

• KKR is set to acquire Indian Medical Device - Healthium Medtech Ltd. Company at $1 Billion.

• Bluesky's most prominent backer, Jack Dorsey, has left its board without explanation.

• Coinbase Global swung to a $1.2 billion profit in Q1 2024 from a year-earlier loss.

• What Do You Think? : As an Investors - How many slides do you like in a startup pitch deck?

• Featured Article : Why Your Startup Idea Isn’t Big Enough for Some VCs? - RTF Analysis.

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STARTUP FUNDING UPDATES

Allozymes, a biotech startup based in the U.S., Europe, and Singapore, developing an ingenious method to rapidly test millions of bio-based chemical reactions. It has raised a $15 million Series A round led by Seventure Partners, NUS Technology Holdings, Thia Ventures, and ID Capital, with participation from existing investors. More Here

Volta, a Las Vegas, NV-based digital asset company providing Volta Circuit, a multi-signature, non-custodial platform, raised $4.1M in Seed funding. The round wad led by Fika Ventures and Haven Ventures, alongside support from Soma Capital, Dispersion Capital, and Uphonest Capital. More Here

Huzzle, a London, UK-based startup providing a careers network for students, societies, and employers, raised £1.4M in Pre-Seed funding. Backers included 10X Founders, and angel investors Verena Pausder, Leon Szeli, and Alexander Mrozek. More Here

SoBet, Nashville, TN-based provider of a sports betting creator platform, raised $3.7M in initial funding. The round was led by Third Kind Venture Capital. More Here

Made With Intent, a Manchester, UK-based provider of a segmentation platform for data-led retailers, raised £1.5M in Seed funding. The round was led by Mercuri, with participation from Portfolio Ventures and Haatch. More Here

EYWA, a Road Town, British Virgin Islands-based company providing a consensus bridge service that secures transactions across multiple protocols, raised $7M in Seed funding. The round was led by Curve Finance founder Michael Egorov with participation from Fenbushi Capital, GBV Capital, Big Brain Holdings, Marshland Capital, Mulana Capital and others. More Here

Deltia.ai, a Berlin, Germany-based startup that uses AI and computer vision to optimize picking processes in warehouses, raised $4.8m in seed funding. The round was led by Cavalry Ventures with participation from Merantix. More Here

Lamini, a Palo Alto, CA-based startup that is building a platform to help enterprises deploy generative AI applications, raised $25m in seed and Series A funding. Backers included including Amplify Partners (led Series A), First Round Capital (led Seed), Andrew Ng, Andrej Karpathy, Bernard Arnault, Pierre Lamond, Sarah Guo, Dylan Field, Lip-Bu Tan, Drew Houston, AMD Ventures, and others. More Here

AISAP, a Tel Aviv, Israel-based company providing an AI-powered point of care assisted diagnosis (POCAD)™ solution for the medical ultrasound industry, raised $13M in Seed funding. The round was led by Harel Insurance Investments & Financial Services Ltd. and Shoni Top Ventures, L.P. More Here

EnviroSpark, an Atlanta, GA-based electric vehicle (EV) charging company, received a $50M investment from Basalt Infrastructure Partners. More Here

Latus Bio, a Philadelphia, PA-based biotechnology company developing novel gene therapy candidates for disorders of the central nervous system (CNS), raised $54M in Series A funding. The round was led by 8VC and DCVC Bio. More Here

GroundGame.Health, a Tampa, FL-based provider of a social impact solution that fulfills unmet social and care needs for people everywhere, raised $17M in funding. The round was led by 7wireVentures. More Here

Amae Health, a Los Angeles-based startup focused on providing comprehensive care for individuals with severe mental illness, has raised a $15 million Series A round led by Quiet Capital, with participation from Healthier Capital, Baszucki Group, Index Ventures partner Mike Volpi, and former One Medical CEO Amir Dan Rubin's firm. More Here

WHAT DO YOU THINK?

VENTURE CAPITAL UPDATES

ICONIQ Growth, the late-stage investment unit of ICONIQ Capital, has raised $5.75 billion for its seventh growth fund family, surpassing its initial target of $5.75 billion. The impressive fundraise comes despite the challenging environment for growth investors, and the firm plans to invest the capital in 20 to 25 tech companies. More Here

Pete Sonsini, an early investor in Databricks, is moving closer to launching a new venture capital firm by collaborating with Databricks co-founder Andy Konwinski and a serial entrepreneur in his new venture Andrew Krioukov that will focus on making investments in software infrastructure and artificial intelligence startups at pre-seed, seed, and Series A stages. More Here

Front Porch Venture Partners, a Triangle-based venture capital firm started in 2019, has raised $20 million for its second fund to invest in startups in Southeastern states. More Here

FEATURED ARTICLE

Why Your Startup Idea Isn’t Big Enough for Some VCs? - RTF Analysis

During the startup pitch, investors focus on one question: "Can this startup become worth a billion dollars?" If they don't see that potential, the startup is often rejected. But how do they calculate this potential?

VC functions with a power law where the majority of a fund’s returns come from a small % of investments. Because of this, VCs need to know if a single investment can return the entire fund. 💹 

Remember: Venture capital is not a home run business, It’s a grand slam business.” This is where the Return The Fund (RTF) analysis comes into play.

For a venture fund, most investments deliver 0–2x returns, with some reaching 2–5x. The real game-changer is a rare "unicorn" outcome of 10x+, essential for the fund to achieve top-tier 3x returns.

Venture success hinges on a few grand slam investments that "return the fund,".

The math for a RTF (Return The Fund) analysis is pretty simple: 💡 

Fund Size / % owned at exit = Minimum Viable Exit

Let's understand this with simple example, Consider startup XY AI is raising a $2M seed round at a $10M post-money valuation (selling 20% of their company).

1️⃣ VC Fund A is a $50M seed fund investing $1M

• $1M/$10M valuation = 10% ownership

• In order to return the fund, XY AI must exit for (50/.1) = $500M

• A $50M fund, likely unable to maintain pro-rata in all rounds, may face 20% dilution. Assuming this, the actual return to the fund is $625M ($50M/.08). It accounts for potential dilution impact on returns.

To pass RTF analysis, Fund A must believe XY AI's exit at a minimum of $500M, preferably $625M. ✅ 

2️⃣ Now let’s look at a larger fund model.

VC Fund B is a $250M seed + series A fund investing $1M in XY AI

• $1M/$10M valuation = 10% ownership

• In order to return the fund, XY AI will exit for $2.5B ($250M fund / 10% ownership).

• VC Fund B, maintain at least 10% ownership in XY AI and anticipates an additional 5% on average. For a favorable exit, they are banking on a $1.66B valuation, representing a 15% stake.

As an investor, the difference between a company exiting for $500M vs. $2.5B is not trivial. The startup number with this exits always at the lower end.

As a Founder consider investors' philosophies, noting that some startups are suited for exits in the millions, larger funds may push for riskier strategies, aiming for rare grand slam successes that defy natural exit.

RTF analysis is a useful quick check for ownership and investment size, but it's just one part of the larger DD. It helps investors plan their positions, but in the world of startups, there are always outliers.

(We have shared the detailed writeup in our Venture Curator Newsletter)

STARTUP’S LATEST BUZZ

ACQUISITION & EXITS

KKR is set to acquire Healthium Medtech Ltd., a leading Indian medical devices company, from Apax Partners for a deal potentially valued at around $1 billion. More Here

WSO2, a company that provides API management and identity and access management (IAM) services for enterprises, has been acquired by Swedish investment giant EQT at $600 Millions. More Here

LAYOFFS & BANKRUPTCY

Kim Godwin, the first Black president of ABC News, has announced her resignation amidst internal turmoil and criticism of her leadership. Her departure follows reports of controversial comments and a tumultuous tenure marked by scandals and executive turnover. More Here

A 92-year-old trucking company, Arnold Transportation Services of Grand Prairie, Texas, ceased operations recently and filed for Chapter 7 bankruptcy liquidation. More Here

STARTUPS & PEOPLE

Bluesky's most prominent backer, Jack Dorsey, has left its board without explanation. Dorsey first announced the decentralized social network project in 2019 while CEO of Twitter. Despite Dorsey's departure, Bluesky assures it remains committed to building an open social network where users control their experience. More Here

LATEST IN EMERGING TECH

The US government alleges Google pays Apple over $20 billion annually to be the default search engine on Apple devices, stifling competition. The antitrust lawsuit argues this creates an illegal monopoly, with Google hoarding valuable user data. A ruling against Google could reshape the tech industry, particularly in AI development. The judge remains undecided, questioning if any competitor could realistically challenge Google's dominance. More Here

Coinbase Global swung to a $1.2 billion profit in Q1 2024 from a year-earlier loss, propelled by surging cryptocurrency trading volumes of $312 billion following the launch of U.S. bitcoin ETFs. Despite concerns over Bitcoin's recent price drop, Coinbase's low costs and interest income from USDC stablecoin reserves boosted performance. However, shares fell 2.5% after-hours, reflecting investor worries about future trading activity. More Here

ESSENTIAL READS

• Framework: How a Seed VC Makes Investment Decisions? Read Here

• The Startup Pricing Guide By Bessemer Venture Partner. Read Here

• Sam Altman - ‘Don't Run Toward Ideas Where There Is Oversupply of Founder Relative To Market Demand.’ Read Here

• All-in-One Startup Ideas Validation Guide By Board of Innovation. Read Here

HOW CAN I HELP YOU?

• Build Your Pitch Deck : We write, design and model your pitch deck into a storyteller book within 4-5 days.

• Get Your MVP In 15 Days: Have an Idea? Turn your idea into Reality. Move fast before your competitors.

• Break Into VC: Join Our VC Enthusiast slack Community to learn, network and craft path to venture capital.

That’s It For Today! Will Meet Tomorrow. Happy Monday! 🥂

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