VC Daily Digest - 12/09/2023

👋 Welcome to Today’s VC Daily Digest!

Your Monday to Saturday Daily Morning Dose of Venture Insights, Funding Updates and Startup Stories Delivered Straight to Your Inbox🚀. Stay Informed and Stay Ahead In the World of Venture Capital !

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📢 Top Venture Capital News

Prioritizing founders' mental health could pay off for VCs: Mental health has rarely been discussed in the venture capital community but the issue has garnered more attention recently, particularly among startup founders finding themselves under increased pressure in the current downturn. The pressures of raising funds, meeting performance targets and coping with a stressful work-life balance are taking their toll on many entrepreneurs' mental well-being. According to a survey by data-sharing platform Startup Snapshot, some 72% of founders reported that launching their own business had a negative impact on their mental health. More Here

AI Is Killing Crypto Venture Capital Interest, Vinod Khosla: The venture capital space has lost significant momentum over the last few quarters. Global venture funding is nearly half of what it was last year. Whatever remains of the market is now being directed toward AI funds. AI has become the golden goose for VC firms after the turbulence in crypto in the last year. More Here

Temasek-Backed Singapore VC Snags $541 Million Despite Tech Woes: Vertex Ventures Southeast Asia and India closed its fifth and biggest fund at $541 million to back startups in the region, defying a slowdown in the global technology sector during a tumultuous year. The sum includes a $50 million vehicle that will pump in additional capital alongside its main fund into startups led by women founders, the Singapore-based firm said in a statement on Tuesday. New investors include Japan Investment Corp. and International Finance Corp., while most of the investors in its previous funds — such as Cathay Life Insurance Co. — put in capital again. More Here

NordicNinja raises €200M fund for climate, deep tech startups: NordicNinja, the largest Japanese VC in Europe, has successfully raised a €200mn fund to support early-stage startups in the climate and deep tech sectors. This initiative, focusing on the intersection of sustainability and digitalisation, will provide startups with not just funding, but also access to a network of over 120 blue chip Japanese corporations. More Here

📢 Top Startups News

Instacart targets up to $9.3 bln valuation for much-awaited US IPO: Instacart, the San Francisco-based grocery delivery company, is gearing up for its much-anticipated IPO, targeting a valuation of up to $9.3 billion. Despite a previous valuation of $39 billion, the company is looking to raise up to $616 million by offering 22 million shares priced between $26 and $28 each. Cornerstone investors, including Norges Bank Investment Management and venture capital firms TCV, Sequoia Capital, D1 Capital Partners, and Valiant Capital Management, have agreed to buy up to $400 million worth of shares. The IPO, expected to take place in September, could signal a recovery in the U.S. IPO market amid growing expectations of a pause in rate hikes by the Fed. More Here

Divvy Homes, a16z & Tiger Global backed startup struggling for existence : Divvy Homes, a rent-to-own startup, is facing significant challenges as it lays off 94 employees, marking its third round of layoffs in the past year. This comes as a result of surging mortgage interest rates, which have severely impacted the company's business model. The layoffs span across various roles and locations, with the terminations taking effect as of November 7. Despite having raised over $700 million in debt and equity from high-profile investors, the company's economic viability is being questioned due to the current macroeconomic climate. More Here

📢 Featured: Today’s Featured Article

How VCs Make High-Quality Investment Decisions? & Why Top 1% Of Founders Quit Their Startup?

Understanding how leading investment firms like Tiger Global, Sequoia Capital, and Antler make investment decisions is a subject of great interest to many.

For a founder, understanding this process can be beneficial as it will help them to get the investor’s mindset and eventually help them to pitch in front of investors. Recently, we shared this in our VC’s Newsletter - Have a Look! 👇

📢 Top AI News

Funding for AI Chipmakers Plummets as Nvidia Ascends: Nvidia's dominance in the AI chip market has reportedly led to an 80% drop in deals for US chip startups since last year. The company's GPUs are cited in research 90 times more than top AI chip startups combined, and its data center GPU revenues totaled $3.8 billion in 2022. Despite AI's growing importance across industries, many consumers remain unclear about its role in their lives and work, with only 37% expressing interest in AI impacting their jobs. However, Generation Z workers are more likely to acknowledge AI's potential to replace some skills and show interest in AI-augmented work. More Here

AI app Character.ai is catching up to ChatGPT in the US: Character.ai, the AI app maker, is rapidly gaining traction with 4.2 million monthly active users in the U.S, closing in on ChatGPT's 6 million. Despite ChatGPT's broader web presence, Character.ai's mobile-first approach is resonating with a younger demographic, with nearly 60% of its audience falling within the 18-24 age bracket. While ChatGPT still leads globally with 22.5 million monthly active users, Character.ai's impressive growth since its May 2023 launch, backed by a $150 million Series A funding, signals a promising future. As the school year resumes, both platforms are seeing a resurgence in traffic, further highlighting the growing interest in AI chatbot experiences.

Google.org to invest $20M into AI-focused grants for think tanks and academic institutions: Google has launched the Digital Futures Project, a $20 million initiative aimed at supporting AI research and policy solutions. The fund, managed by Google.org, will provide grants to think tanks and academic institutions exploring AI's impact on global security, labor, productivity, and governance. The inaugural grantees include the Aspen Institute, Brookings Institution, and MIT Work of the Future, among others. This move underscores Google's commitment to fostering responsible AI innovation and addressing complex societal challenges. More Here

Are AI models doomed to always hallucinate?: Large language models (LLMs) like OpenAI’s ChatGPT, while impressive, are known to "hallucinate" or invent facts due to their probability-based training methods. These models, though not malicious, can generate misleading or incorrect information, posing potential risks. However, experts believe there are ways to reduce these hallucinations, such as reinforcement learning from human feedback (RLHF) and curating high-quality knowledge bases. Despite the challenges, LLMs can also serve as creative partners, generating unexpected outputs that can lead to novel ideas. More Here

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📢 Top Startup’s Fundraising News

KKR invests $250 million in Reliance Retail at $100 billion valuation: Private equity firm KKR is reinforcing its confidence in Reliance Retail with an additional $250 million investment, bringing the valuation of India's largest retail chain to a staggering $100 billion. This move follows on the heels of a $1 billion investment from the Qatar Investment Authority last month. As Reliance Retail expands into new categories and contemplates a public listing, KKR's investment underscores the company's impressive vision, resilience, and performance. More Here

Common Trust grabs $2.6M to give business owners employee-focused succession plans: Common Trust, a company offering employee ownership buyout options for small businesses, recently raised $2.6 million in seed funding. Founded by Zoe Schlag and Derek Razo in 2022, the company works with business owners to design, finance, and execute employee ownership buyouts. This approach allows businesses to become employee-owned upfront and stay independent, a solution that preserves generational businesses and quality jobs across America. More Here

Pahdo Labs Raises $15M to Let Players Make Anime Games With AI Tools: Andreessen Horowitz (a16z) has led a $15M Series A funding round for gaming startup Pahdo Labs, the creators of the upcoming anime-style action RPG, Halcyon Zero. The game will feature generative AI tools, allowing players to create their own game worlds, a move that aligns with the growing trend of user-generated content (UGC) in online games and metaverse platforms. This investment underscores a16z's belief in the potential of anime-style games and AI-assisted UGC to transform IP into dynamic, never-ending game franchises. More Here

0xPass raises $1.8M from Balaji Srinivasan and others to build secure login systems for web3: 0xPass, a startup incubated at the Stanford Blockchain Club, is revolutionizing the crypto wallet space by enhancing security and user experience. Despite the "crypto winter" following the collapse of FTX, the team has been diligently building an infrastructure that supports non-custodial wallets, giving users full control over their assets. Today, they announce a $1.8 million pre-seed round from investors across the U.S. and Asia. With a focus on multi-person computation (MPC) for key distribution. More Here

Open Cosmos, a UK satellite startup focused on sustainability, raises $50M: UK startup Open Cosmos, specializing in building sustainable low-earth orbit satellites and managing the data they gather, has raised $50 million. The funding aims to democratize access to satellite data through a platform that allows multiple organizations to use and share data from single or multiple satellites. The funding round was led by impact investors ETF Partners, Trill Impact, and A&G, with participation from Accenture Ventures, Banco Santander/InnoEnergy Climate Tech Fund, IREON, Wille Finance, Claret Capital Partners, and entrepreneurs turned investors Taavet Hinrikus and Kheng Nam Lee. More Here

Battery recycling heats up with Ascend Elements’ $542M Series D : Ascend Elements, a pioneer in recycling lithium batteries into sustainable, battery-ready materials, has secured a whopping $542 million in Series D funding, adding to its previous $480 million in DoE grants. This eight-year-old company is set to invest these funds into a manufacturing facility in Kentucky, aiming to produce 20 kilotons of precursor cathode active materials (PCAM) per year by the end of 2024. With significant backing from BlackRock-linked Decarbonization Partners, funds managed by Singapore and Qatar, and climate-tech investor Fifth Wall, Ascend Elements is leading the charge in the battery recycling space, a sector that's seeing a surge in venture funding. More Here

Scala Biodesign makes it easy to re-engineer proteins one molecule at a time – or 50 raised $5.5M: Scala Biodesign, a spin-off from the Weizmann Institute of Science, is leveraging AI and other tools to improve existing drugs and treatments. With a fresh injection of $5.5 million in funding, the company is focusing on making promising drugs more practical by modifying them at the molecular level. By combining protein structure prediction with clinical data, Scala's system can pinpoint changes that enhance stability, amplify effect, and ease manufacture. This innovative approach aims to accelerate the slow and complex process of therapeutic molecule engineering, potentially revolutionizing the biotech industry. More Here

DetraPel Closes $7.6M Series A Funding Round Led by Material Impact with participation from INX International, and others: DetraPel, a pioneer in sustainable coatings, has successfully completed a $7.6M Series A funding round led by Material Impact, with participation from INX International, Touchdown Ventures, FitzGate Ventures, Boro Capital, Icebook Investments, and others. This capital will be used to scale up DetraPel's industrial arm, Impermea Materials, which is revolutionizing the industry with PFAS-free and plastic-free platform coatings for food packaging and textiles. More Here

India’s Kale Logistics raises $30M in global expansion push: Kale Logistics Solutions, an Indian startup revolutionizing logistics with its cloud-based software tools, has secured $30 million in a fresh funding round led by Bengaluru-based private equity fund Creaegis Advisors. The funding will fuel its expansion into the U.S. and Europe, as well as enhance its Cargo Community Platform, a solution that streamlines data exchange among logistics stakeholders. With a presence in over 100 airports and ports worldwide, Kale Logistics is at the forefront of the digital disruption in the logistics industry, providing end-to-end visibility and intelligent automation. More Here

🗞️ Interesting Tuesday’s Reading On: Startups & Venture Capital

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

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

• 📮How Does the Venture Capital Fund Cycle Work ? 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

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

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What did you think of today's newsletter?

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✍️Written By The Venture Crew Team

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