VC Daily Digest - 30/09/2023

Partners Are Quitting Indian VC Firms & Down Rounds Are Rising

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Venture Daily Digest
September 30, 2023

📢 Major News

  • Fund Managers, Partners Are Quitting VC Firms In India?

  • Down rounds are rising

  • Crypto’s First Year After the FTX Blowup: ‘It’s Been Miserable’

  • Featured Article: What Every Founder Should Know About Valuations?

📢 Venture Capital Highlights

Increasing number of new funds. What does it mean?: Liquidity Group, a growth-stage debt financier, raised $40 million and launched a $250 million debt fund for tech companies. Backers included Apollo (private equity, and Yahoo! owner) and MUFG (a Japanese bank). Liquidity is an interesting beast. It’s part tech platform and part lender, using its technology to make decisions on deploying debt facilities and other financial solutions from $5 million to $100 million. It claims its processes are relatively faster than more traditional approaches. More Here

Why Fund Managers, Partners Are Quitting VC Firms In India: The startup venture capital (VC) ecosystem in India is going through an unprecedented churn. Even as new funds are lining up for SEBI approval, the portfolio disarray of the past 24 months has caught up with VC firms in India, leading to partner exits and talks of fund mergers. In other words, the VC ecosystem is mimicking the trends prevalent among startups in the past year which has seen consolidation, founder exits and second-time entrepreneurs starting new ventures. More Here

Down rounds are rising. History shows things could get much worse: Nearly 11% of VC deals this year have been down rounds, a sharp reversal from the more than two-decade low of 6.64% in 2022 and the highest rate since 2020, according to PitchBook data. But history shows the worst could be yet to come. The rate of down rounds during the dot-com bust topped 58%; in the aftermath of the 2008 housing crash, it rose to nearly 36%, our latest quantitative perspectives report shows. More Here

📢 Massive Fundings Updates

EV startup Fisker raises $150 million from existing investor: Fisker Inc has raised $150 million from an existing institutional investor through the issue of convertible bonds with an additional $550 million in funding available, the electric-vehicle startup said on Friday. The EV company expects to use the proceeds to ramp up deliveries. Fisker earlier this month reiterated its plan to increase deliveries of its flagship Ocean sports utility vehicle to 300 units per day later this year. More Here

DeepMind Vet Raises $14 Million For AI Startups: A veteran of Google’s artificial intelligence (AI) unit has reportedly launched his own fund to back startups in that space. Vishal Maini, a one-time researcher for Google’s DeepMind, has founded Mythos Ventures and thus far raised at least $14 million for AI startups, Bloomberg News reported Tuesday (Sept. 26). The report noted he is among dozens of Google alumni who have the money, expertise and motivation to help shape AI, either through investing, entrepreneurship or a combination of the two. More Here

Character.AI Seeking Funding at Valuation Exceeding $5 Billion: Character.AI, a startup focused on generative artificial intelligence (AI) and chatbot technology, is reportedly in discussions to raise funding that could value the company at over $5 billion. The startup has garnered significant interest from investors and has achieved noteworthy milestones since securing $150 million in funding earlier this year, Bloomberg reported Thursday (Sept. 28), citing unnamed sources. However, the talks are still in the early stages and may not come to fruition. More Here

Nexusflow raises $10.6M to build a conversational interface for security tools: Nexusflow, a startup using generative AI to help companies make sense of cybersecurity data, today announced that it raised $10.6 million in a seed round led by Point72 Ventures with participation from Fusion Fund and several AI luminaries in Silicon Valley. The tranche, which values Nexusflow at $53 million post-money, will be put toward hiring, R&D and ongoing product development. More Here

Crypto’s First Year After the FTX Blowup: ‘It’s Been Miserable’: Feenan, whose stints over the years included a blockchain technology company and the Binance exchange, was excited to be part of a movement that promised to remake and improve seemingly everything. She even named her dog after the inventor of Bitcoin. Then came the convulsions of 2022, capped by the spectacular blowup of the FTX exchange last November. More Here

📬 Featured: Today’s Featured Article

What Every Founder Should Know About Valuations?🤔

I get a lot of questions regarding valuation from founders who are looking to fundraise for the first time. So, in our recent VCs newsletter I shared some key note on those questions.

I tried to answer some common questions like - What determines a company’s valuation? | Is it mandatory to calculate a company’s value to fundraise? | Should companies aim for the highest valuation they should get? & More. Have A Look 👇

📢 The Latest In Emerging Tech: AI

Will AI Kill The Low-Code Market?: TuringBots (AI and generative AI that assist in software development tasks) are a major trend, and tools like GitHub Copilot (a Coder TuringBot for pair programming in common languages such as Java or C#) or Test Rigor (a Tester TuringBot for intelligent automated testing) are gaining huge market interest. In a nutshell, the ChatGPT phenomenon and rapid vendor investment into TuringBots based on generative AI and LLMs have made natural language a key authoring mechanism for tools across the entire software development lifecycle. More Here

Eliminating Algorithmic Bias Is Just the Beginning of Equitable AI: From automating mundane tasks to pioneering breakthroughs in healthcare, artificial intelligence is revolutionizing the way we live and work, promising immense potential for productivity gains and innovation. Yet, it has become increasingly apparent that the promises of AI aren’t distributed equally — it risks exacerbating social and economic disparities, particularly across demographic characteristics such as race. More Here

Mistral AI Launches Open-Source LLM, Mistral 7B: Mistral AI, a burgeoning startup in the AI sector, has set out on a mission to revolutionize generative artificial intelligence (AI) with its first large language model (LLM), Mistral 7B. The company hopes the new 7-billion-parameter model will become an open-source alternative to current AI solutions. More Here

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📢 Startups Snap: The Latest Buzz

It’s not clear X CEO Linda Yaccarino knew about Elon Musk’s plan to charge for X: CNBC’s Julia Boorstin, who was conducting the interview, wanted to know how such a shift would impact X’s business, which today is largely reliant on ad revenue. Yaccarino, who joined X from NBCU, where she had been chairman of its advertising and partnerships group, would surely have known if X was attempting to shift away from its largely ad-supported model to one that also relied on user subscriptions to generate revenue. More Here

Napster’s new CEO has a big, crypto-based idea for the next phase of music: If you’re a music fan of a certain age, you’ll remember the night that tech entrepreneur Shawn Fanning trolled Metallica on national TV by wearing the band’s T-shirt onstage at the MTV Video Music Awards. The stunt was a clever diss to the band, which was trying to sue Fanning’s file-sharing platform Napster out of existence, but also a seminal moment in music history that symbolized the beginning of the end of the industry’s longtime business model that revolved around selling records and CDs. More Here

Dear Mark Zuckerberg, Gen Z doesn't want your celebrity AI chatbots: Meta has announced plans to unleash a host of new AI assistants, with a number of chatbots featuring familiar famous faces. The new AI chatbots will be available on Instagram, WhatsApp and Messenger and will cover a range of topics, moving Meta's AI technology into the realms of 'fun' not just functionality. But I'm not convinced anyone wants it. More Here

Startups may have trouble finding their enterprise footing: The software spend squeeze is lessening, new data from Battery Ventures indicates. According to the venture capital firm’s survey of enterprise firms with 100 C-suite leaders at companies around $35 billion in annual IT spend, contract approval timelines are no longer stretching longer, and focus on cutting SaaS spend more generally is fading. For startups that sell software, the market may be stabilizing. More Here

WestBridge evaluates buying stake in Meesho at a discount: WestBridge Capital is in advanced stages of talks to purchase shares of Meesho worth tens of millions of dollars in the secondary market, according to two people familiar with the matter, as the high-profile venture firm looks to broaden its bet on e-commerce. The crossover fund, with a two-decade history of focusing on startups in India and Southeast Asia, is engaging with Venture Highway to buy out the younger firm’s stake in the social commerce startup, the people said. More Here

Blue Apron's IPO Fail To Excite Investors: News that Blue Apron is selling itself to Wonder Group — Marc Lore’s latest — for around $100 million marks the end of the former startup’s life as a public company. Blue Apron raised a $135 million Series D back in 2015 for its meal kit business before going public in mid-2017 with a valuation of just under $1.9 billion. That figure had fallen to double-digit millions before Wonder agreed to buy it for $13 per share, cash. More Here

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What Do You Think Of Today's News Updates? 🤓

✍️Written By Sahil R | Venture Crew Team

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