VC Daily Digest - 11/09/2023

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📢 Top Venture Capital News

Venture capital hit Y Combinator for frothy valuations: Venture capitalists complaining about Y Combinator startup valuations being too high is a time-honored tradition. Now they're blaming it on a change the accelerator introduced in early 2022. This creates a new dilemma for founders: Either seek to raise cash at a (relatively) high valuation, or give up more of their ownership in the company (also known as dilution). More Here

Venture capital has a crypto obsession – See?: The crypto sphere has been a roller-coaster, with highs and lows often defining its trajectory. Venture capital, the perennial chaser of potential gold mines, hasn’t lost its hunger for this digital currency arena, regardless of the fluctuating fortunes of the crypto world. More Here

Air Street Capital Raises $121 Million for AI Startups: London-based venture capital firm, Air Street Capital, has successfully closed a $121 million fund, set to bolster early-stage AI companies. Founder Nathan Benaich emphasizes the firm's commitment to AI-first technology and life science companies, defining "AI-first" as a product that ceases to function without its AI component. Beyond investing, Air Street is also dedicated to challenging institutions and policies that hinder AI's progress. This news comes at a critical juncture for AI, with potential regulatory changes on the horizon and a renewed focus on AI's role in our society. More Here

A new VC fund backing early-stage medical and healthtech startups is on the hunt for investors: Emerging from the MedTech Actuator’s Origin program, Synthesis Capital is set to invest in deep tech health startups from pre-seed to series A+ in Australia and the Asia-Pacific. With a fundraising target between $50m-$100m, the fund aims to achieve an internal rate of return (IRR) of 25% net of all fees and offer co-investment opportunities for limited partners (LPs). As Dr. Buzz Palmer, Synthesis Capital investment partner and co-founder, puts it, "Synthesis Capital represents a fresh approach to investing, driven by our rich history and commitment to relentless impact in health innovation. More Here

📢 Top Startups News

Why some company can’t land a deal: The state of a startup sector is often reflected in its deals, whether they're funding rounds or acquisitions. However, sometimes, a lack of deals can be more revealing. Take for example the case of Perch, a startup that has raised over $900 million to acquire and aggregate Amazon brands. Victory Park Capital, one of its stakeholders, is reportedly struggling to find a buyer for its stake. While it's common for high-value companies to face challenges due to overinflated valuations or complex capital structures, the issue with Perch seems to be rooted elsewhere, indicating a potential shift in the Amazon aggregator space. More Here

Coinbase to discontinue services in India later this month: Coinbase, the global crypto exchange, has announced plans to cease all exchange services for users in India due to regulatory challenges. The company has advised its users to withdraw any funds they have in their accounts by September 25. Despite an 18-month effort to relaunch its service in India, Coinbase has faced difficulties with local authorities, leading to the departure of key executives. The company's CEO, Brian Armstrong, attributes the halt in trading services to "informal pressure" from the Reserve Bank of India, despite cryptocurrency trading being legal in the country. More Here

How founders can prepare for the fall fundraising ‘marathon’: As the fall season approaches, venture capital investors are back in action, signaling a potentially challenging fundraising season for founders. Sarah Kunst, managing director at Cleo Capital, suggests we're in "marathon territory" with higher bars for prospective investments. However, Eric Bahn, general partner and co-founder of Hustle Fund, views fall as an optimal time for fundraising, advising companies to kickstart the process post-Labor Day. Despite the potential hurdles, the watchword for founders this fall is "perseverance", with the assurance that standout companies will still secure funding. More Here

📢 Featured: Today’s Featured Article

Path to Product-Market Fit — Solve the Customer’s Problem, Then Write Code

Recently, I read an article by First Round where Christina Cacioppo, co-founder and CEO of Vanta, a security and compliance automation platform, shares her unconventional journey to success. She mentioned that most founders make mistakes while building the Product-Market Fit (PMF) for their product.

This article is great for those who want to know what mistake to avoid while building multi billion dollar business. So Have a Look! 👇

📢 Top AI News

Elon Musk's AI-Dominated Future: For the past decade, Elon Musk has invested heavily in a slew of progressively weirder businesses, many of which have a dystopian hue to them. From his computer-to-brain interface startup Neuralink, to his pet Tesla project “Optimus,” the bipedal robot, to ChatGPT creator OpenAI (which Musk co-founded), Musk has helped spawn a pantheon of weird, sci-fi-tinged businesses that are actively flirting with the fringes of technological innovation. More Here

Microsoft and Paige partner to create world's largest AI model for cancer detection: 'Unprecedented scale': Microsoft is joining forces with digital pathology company Paige to create the world's largest image-based AI model for cancer detection. Leveraging Microsoft's supercomputer infrastructure, this model will utilize billions of parameters and millions of digitized histology slides, making it significantly larger than any existing models. The aim is to reduce misdiagnoses, which currently lead to hundreds of thousands of deaths and disabilities annually. This groundbreaking partnership is set to revolutionize cancer imaging, potentially improving the lives of millions affected by cancer. More Here

Meta is developing a new, more powerful AI system: Meta Platforms is developing a new artificial intelligence system, aiming to rival the advanced models of OpenAI. Expected to be ready next year, this AI model will be several times more potent than Meta's current commercial version, Llama 2. This move comes as businesses increasingly turn to generative AI to refine processes and unlock new capabilities. The new AI system, whose details may still evolve, is set to assist other companies in creating sophisticated text, analysis, and other outputs. More Here

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📢 Top Startup’s Fundraising News

Perfios raises $229 million for its real-time credit underwriting solutions: Indian fintech Perfios, a provider of real-time credit underwriting solutions, has successfully raised $229 million in a new funding round. This significant investment, led by Kedaara Capital, will fuel Perfios' expansion into North America and Europe. With a strong presence in 18 geographies and a total of $384 million raised in primary and secondary transactions, Perfios is preparing for an IPO within the next 18 to 24 months. More Here

Google-backed Edtech Company Mathpresso Secures Strategic Investment from Telecom Giant KT: Google-backed edtech company Mathpresso has raised $8 million (10 billion KRW) from Korea's telecom giant, KT. This brings the total funding to about $130 million. Previous backers include Google, GGV Capital, Goodwater Capital, and SoftBank Ventures Asia. The partnership aims to accelerate the development of an education-specific Large Language Model, leveraging Mathpresso's proprietary AI technology and data along with KT's infrastructure prowess. More Here

Tradeteq secured $12.5M Funding: Tradeteq, the innovative provider for securitisation-as-a-service and bank asset distribution, has successfully completed a $12.5 million A Plus funding round, led by US-based MS&AD Ventures and Interlock Partners. This strategic investment marks a significant milestone for Tradeteq, as it prepares to enter the US, the world's largest private credit and securitisation market. More Here

Base Ecosystem Fund, Hashed Emergent invest $1.9M in Nestcoin to scale its Onboard product: Nestcoin, the development company behind the modern finance project Onboard, has secured $1.9 million in strategic funding led by Hashed Emergent. The company, which faced significant losses after the cryptocurrency exchange FTX's implosion, is now focusing on developing Onboard, a noncustodial wallet aiming to provide equitable economic access to individuals in frontier markets. More Here

$2M raise marks beginning of 'rapid' growth phase for this Santa Fe biotech startup: After showing off its drug delivery technology at a national biology conference in late July, Mercury Bio announced it raised $2 million in a move that could signal rapid growth for the Santa Fe-based biotech startup. The startup, which changed its name in 2022, closed the $2 million seed financing round — typically the earliest stage of venture funding for companies — in early June. That close came just under two months before its Chief Science Officer Richard Sayre, Ph.D., presented Mercury Bio's biomolecular drug delivery platform at the mRNA-Based Therapeutics Summit, a large gathering of bioscience professionals — including those from companies like AstraZeneca and Moderna — held in Boston. More Here

🗞️ Interesting Weekend Reading On: Startups, Technology & VC

• 📑 How Do LPs Evaluate VC Fund Performance? Read Here

• 📰 Why Your Startup Idea Isn’t Big Enough for Some VCs? Read More

• 📮How Much Should You Raise For Your Startup? Read More

• 📪 The Game-Changing Clause For Entrepreneur. Read More

• 🗃️ How Do Investors Protect Themselves from Down rounds ? Read Here

• 📪Hidden Trap Of Convertible Note and Liquidation Preference Multiples Read More

• 📜 Decoding Startup Valuations with the Venture Capital (VC) Valuation Method Read More

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✍️Written By The Venture Crew Team

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