VC Daily Digest - 17/08/2023

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📢 Top Venture Capital News

Two Reverse Trends Shaping The Future Of Venture Capital And Startups: In an increasingly deglobalized world, Judah Taub, Managing Partner at Hetz Ventures, believes that startups and investors need to be more strategic about where they choose to operate and raise capital. He suggests that geopolitical disruptions could lead to more regional winners in the tech industry, and that the trend towards consolidation in the VC industry could reverse, providing opportunities for smaller players. Taub also predicts that the importance of local partnerships will grow due to geopolitical tensions, and that founders and VCs may seek to de-risk capital by avoiding foreign investors. More Here

Founders Factory Africa to deploy $114M using learnings from past programs: Founders Factory Africa (FFA), an early-stage accelerator and investor, has raised $114 million in impact capital from Mastercard Foundation and Johnson & Johnson Impact Ventures. This funding will be used to scale FFA's hybrid investment and venture-building model, which provides hands-on support and investment to early-stage founders in Africa. Since its inception in 2018, FFA has backed 55 startups across 11 African countries, providing up to $250,000 in equity capital. The new funding will also support FFA's efforts to address gender imbalances in the VC market and provide nondilutive funding to startups. More Here

Peak XV eyes $50M investment in former Edelweiss executives’ Neo: Peak XV Partners is reportedly in advanced discussions to lead or fully finance a funding round for Neo Group, an asset management and financial advisory firm. The investment could be as much as $50 million, though the deal is not yet finalized. Neo Group, founded by industry veterans in late 2021, managed over $1 billion in assets by mid-last year. This potential investment comes at a time when India's asset management industry, with over $540 billion in assets under management, is attracting more players. Peak XV's potential investment in Neo Group follows its recent investments amid its split from venture firm Sequoia. More Here

Women-led VC firms are a bright spot in 2023’s fundraising slump: Despite a general slowdown in venture fundraising, it appears that women-led firms are bucking the trend. Notable successes include Monique Woodard's $17M debut fund at Cake Ventures, Adverb Ventures' $75M round led by April Underwood and Jessica Verrilli, and Supply Change Capital's $40M raise by Noramay Cadena and Shayna Harris. While comprehensive data is lacking, these instances suggest a promising shift in the landscape of venture capital. More Here

Women’s sports investment deserves the same consideration tech receives: In the face of economic volatility, investing in women's sports presents a stabilizing opportunity. Despite the high-risk allure of sectors like cryptocurrency, the steady growth and increasing value of women's sports leagues, teams, and brands offer a balance. With impressive social engagement figures, increasing fan involvement, and significant growth in partnership revenue, women's sports is poised to be the next market disruptor. It's time to reconsider investment strategies and recognize the potential of this often overlooked sector. More Here

Latin American Startups Turn to Venture Debt With Equity Deals Drying Up: Debt represented about one-third of all venture capital raised in the first half, the highest proportion on record, according to data from Lavca, a nonprofit association for private capital investment in Latin America. Startups are “rolling out the red carpet” for lenders, said Gabriel Carbonelli, a money manager for venture debt at Riza Asset Management in Sao Paulo, which loaned 70 million reais (about $14 million) in the past year. “In the prior years, we had to actively go out and explain all the details to companies. Now, they are coming to us.” More Here

WeWork Stock: 4 Lessons for Investors: WeWork is not the first stock to rise despite financial troubles. Other companies that hit meme stock status recently, such as Tupperware Brands Corp. (TUP) and trucking giant Yellow Corp. (YELL), also saw their share prices jump unexpectedly. YELL has since been delisted as of Aug. 16, following Yellow's bankruptcy. Do bankruptcy announcements provide buying opportunities? For most people, the answer is no. Still, WeWork's rise, fall and meme rally offer many lessons for investors about the stock market, startups and the remote work trend. More Here

📢 Top Startups News

As unicorns grow rarer, maybe it’s time to look toward revenue, not valuations: The era of abundant startup unicorns seems to be waning, according to recent data from Crunchbase. In July, only two new unicorns were minted, a stark contrast to the peak of 2021 when some months saw over 60 unicorns emerge. This slowdown isn't new; we noted in Q2 that billion-dollar valuations have become increasingly impractical for startups due to the devaluation of software revenue. However, the drop to just two new unicorns in a month is significant. As we look ahead, there's reason to believe this number may continue to decrease. More Here

OpenAI acquires AI design studio Global Illumination: OpenAI, the AI powerhouse behind the popular ChatGPT, has made its first public acquisition - Global Illumination, a startup that utilizes AI to create innovative digital experiences. This New York-based team, known for their work at Instagram, Facebook, Google, Pixar, and Riot Games, will now contribute to OpenAI's core products. While the financial details remain undisclosed, this move aligns with OpenAI's ambitious growth plan, aiming to increase revenue from $30 million to $1 billion within two years. More Here

Buy Now, Pay Later on continues on its slow decline: In the face of a declining buy now, pay later (BNPL) market, Splitit is pivoting with a $60 million capital commitment from strategic investors. This move aims to fuel growth, support strategic plans, and enhance Splitit's white label Installments-as-a-service. However, the terms include delisting from the Australian Securities Exchange and reincorporating as a private entity in the Cayman Islands, a move defended by CEO Nadan Sheth as a strategy to create long-term value for shareholders. More Here

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📢 Top AI Startup’s News

Abnormal Security’s CEO explains how ‘defensive A.I.’ will someday defeat cyber attacks: The rapid advancement of AI technology is a double-edged sword, as noted by Evan Reiser, co-founder of cybersecurity startup Abnormal Security. While AI's potential for good is immense, it also poses new challenges in cybersecurity, with AI-generated cyber attacks becoming increasingly sophisticated. However, Reiser remains optimistic, believing that defensive AI will ultimately triumph due to its access to both public and internal private data. He also highlighted the recent launch of CheckGPT, a tool by Abnormal Security that helps companies identify suspicious emails generated by AI tools. More Here

NVIDIA's: How It's Beating Competition in AI in US and Overseas: NVIDIA's CEO, Jensen Huang, underscored the economic advantages of the company's AI chips over traditional CPUs in data centers. The Grace Hopper Superchip, a fusion of CPU and GPU, promises substantial energy savings and enhanced performance for generative AI tasks. Huang illustrated that this Superchip could curtail a data center's power consumption by a factor of 20 and cut costs by 12 times when compared to Intel's. More Here

Ex-Google CEO Eric Schmidt starting AI firm to solve scientific challenges: Former Google CEO, Eric Schmidt, is leveraging his experience and resources to pioneer a new frontier in artificial intelligence (AI). He's building a nonprofit initiative, recruiting distinguished scientists Samuel Rodriques and Andrew White, to tackle scientific challenges and potentially create breakthroughs from drug discovery to material sciences. More Here

📢 Top Startup’s Fundraising News

Highlight, now flush with $18M, helps CPG brands automate product testing: Highlight, an innovative in-home product testing company, has successfully raised $18 million in Series A funding. Co-founded by Dana Kim and Ethan Kellough in 2020, Highlight is revolutionizing the product testing process by automating it, making it quicker, more efficient, and cost-effective. The company's unique platform has already attracted hundreds of top brands, including Nestlé, Estée Lauder, P&G, and Target. With the new funding, Highlight aims to further enhance its product roadmap, improve user experience, and expand its team. More Here

Lindus Health, a UK clinical trials startup backed by Peter Thiel, raises $18M: Lindus Health, a next-gen contract research organization, aims to streamline the lengthy and costly process of clinical trials. Recently securing $18 million in Series A funding, Lindus leverages AI and machine learning to automate and improve the end-to-end clinical trial process. With a focus on common conditions like depression, diabetes, and insomnia, Lindus is committed to making clinical trials more scalable and efficient, ultimately accelerating the journey of new treatments from R&D to patients. More Here

DynamoFL raises $15.1M to help enterprises adopt ‘compliant’ LLMs: DynamoFL, a software provider specializing in large language models (LLMs) for enterprises, has successfully raised $15.1 million in a Series A funding round, bringing its total funding to $19.3 million. The funds will be used to expand the company's product offerings and grow its team of privacy researchers. DynamoFL's mission is to address critical data security vulnerabilities in AI models and provide private, compliant LLM solutions without compromising on performance. The company's unique approach has already attracted several Fortune 500 customers across various sectors. More Here

Caden lands $15M to let users monetize their personal data: As the digital world evolves, so too does our understanding of data privacy. Startups like Datacy, Pogo, and Tapestri are enabling users to monetize their data, but a new player, Caden, is taking a unique approach. Backed by Yahoo founder Jerry Yang, Caden allows users to control which data they share with third parties and offers them the opportunity to monetize it. More Here

Meet Marqo, an open source vector search engine for AI applications raised $60M: Vector databases, the backbone of AI, are gaining traction with startups like Marqo, Pinecone, and Weaviate securing significant funding. Marqo, founded by ex-Amazon engineers, aims to streamline the handling of unstructured data, which makes up 90% of all data. Offering an end-to-end system, Marqo bypasses third-party vector-generation tools, providing vector generation, storage, and retrieval via a single API. This holistic approach to vector search could revolutionize how we manage and make sense of the vast amounts of data generated daily. More Here

Crypto Custody Startup BitGo Hits $1.75B Valuation After $100M Series C: BitGo, a California-based crypto custody firm, has successfully raised a $100 million Series C at a $1.75 billion valuation, marking a significant increase from last year's proposed valuation by Galaxy Digital. This funding will be channeled towards strategic acquisitions and the expansion of BitGo's regulated custody, wallet, and infrastructure solutions. Despite a challenging year for crypto funding, BitGo's growth, including a 60% increase in new clients this year, underscores the rising global demand for regulated crypto solutions. More Here

Aether developed a cheaper, greener way to extract lithium for EV batteries rasied $49M: Mining lithium for EV batteries is usually a messy, inefficient process—one controversial project in Nevada will bury 1,300 acres of public land under waste rock, digging up as much as 20 to 30 million tons of earth each year to produce 60,000 tons of lithium. In South America, massive lithium mining operations are damaging wetlands and shrinking local water supplies. And right now, the work can only happen economically in places where there are high concentrations of the metal. More Here

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