A lot has been discussed regarding the state of venture capital – are there less deals than before? Is it harder for startups to get funded now? One thing that remains clear is that venture capital’s role in the commercialization of innovative companies and technologies is as prevalent as ever, increasing the need for venture capital PR strategies to highlight firms’ successful deal flow and industry authority.
“The news surrounding investment in proptech, and much of technology in general, has been consistently bad through much of 2023. Now, however, some investors and entrepreneurs are beginning to see some green shoots amid the autumnal browns.
Over the first half of 2023 in particular, the funding news ran the gamut from bad to horrible. But, like a Major League team making a playoff wildcard run after a bad first half of the season, even tepid performance seemed to tease some hope.
Among the proptech companies already reaping the financial benefits of funding opening up from various types of investors is Clockworks Analytics, a Boston-based provider of software as a service (SaaS) building analytics that closed a funding round of $16.1 million in August”.
“Large, public companies, under pressure from the capital markets, aren’t always geared toward long-term thinking. Yet there is one part of the corporate realm in which strategic horizons of a decade or more have a place: corporate venture capital.
Global corporate venture capital funding rose 4% during the most recent quarter to $14.6 billion, reversing a slide that began in 2021, according to research firm CB Insights, even as overall venture funding for the same period fell 13% to $60.5 billion, the lowest level in three years.
Since that time, TDK Ventures has focused on making direct investments in early stage startups that are relevant to TDK’s core lines of business in digital and energy transformation. Its first two funds—the first for $50 million, the second for $150 million—invested in 31 companies and have had four exits so far, according to Sauvage. TDK Ventures just launched a new $150 million fund with two limited partners, focused on energy transformation in North America and Europe, including electrification and decarbonization.
The approach to risk diverges from the corporate norm in several ways. Investments are less concentrated, for one thing. Instead of investing $200 million in a merger or acquisition, TDK Ventures can make an investment in the range of $2 million to $2.5 million. But those individual bets tend to be much riskier than a corporate bet”.
“A tougher fundraising environment reveals which companies and sectors investors have real conviction in, and which areas aren’t attractive outside of a bull market. AI startups dominated dealmaking this year, but there is another sector that VCs have stayed committed to: defense tech.
We saw the latest example of this trend just this week. On Tuesday, Shield AI raised a $200 million Series F round led by Thomas Tull’s US Innovative Technology Fund, with participation from Snowpoint Ventures and Riot Ventures, among others. The round values the San Diego–based autonomous drone and aircraft startup at $2.7 billion.
Brandon Tseng, the co-founder and president of Shield AI, told TechCrunch+ his company was able to raise in this environment largely because of its metrics. The company’s revenue is growing 90% year over year, per Tseng, and it is on the path to becoming profitable in 2025”.
“Venture-capital firms that once provided supply-chain technology startups with hefty backing at gaudy valuations have been tightening their pursestrings this year, pushing some of the businesses to slash costs, cut staff and look for other ways to survive in a weak freight market.
Thinning investor support contributed to the collapse of digital freight startup Convoy, which ceased operations in October just 18 months after topping out at a $3.8 billion valuation.
New York-based Transfix, which uses technology to match trucks to available loads from retailers and manufacturers, bucked the trend last month when it raised $40 million at an undisclosed valuation. The backing came after the 10-year-old startup pushed back plans last year to go public through a merger with a special-purpose acquisition company.
Uber Freight, the truck brokerage arm of San Francisco-based
Uber Technologies, acquired technology-focused logistics services provider Transplace in 2021 for about $2.25 billion, expanding its revenue stream from straightforward load-matching—similar to the business Convoy was in—into higher-end transportation management”.
The great startup cash crunch is underway — and it’s forcing late-stage companies to face their demise | Business Insider
“Recent third-quarter data from the equity ownership platform, Carta, points to a grim state of affairs for startups that use its platform: the time between funding rounds is getting longer.
For those startups that raised a Series C in the third quarter of 2023, the average time since they last raised a Series B was 1,090 days, or about three years.
And for those startups that raised a Series A, the average time from its seed round was 787 days, or a bit more than two years — though, that average wait was much shorter earlier this year, according to Carta’s data.
Many of those startups last raised capital around mid-2020, just as the venture capital industry was recovering from the pandemic shock to the markets, or were lucky enough to raise during the 2021 to early 2022 funding boom.”
“The annual MadTechMoney event in London from investment firm First Party Capital is always fittingly apropos.
During the event’s sessions, speakers from OMAC Investments, Wilson Sonsini, Azerion and Dentsu, to name a few, were pretty up-front about one of the market’s not-so-secret secrets — investors are playing it safe. They’re worried about higher capital costs, economic roller coasters, ad spending slowdowns and all the uncertainty caused by Google’s third-party addressability switch.
But the reality check didn’t stop there for founders. Even when an investor is feeling a bit adventurous, it’s still not a walk in the park, the speakers said. Often, their valuations don’t match up with the companies they’re eyeing to buy.
This is quite a departure from the boom era that marked numerous deals from 2020 to 2022. At that point, even unprofitable businesses with growth potential could secure funding. Now, it’s safe to say that it’s much harder for a loss-making venture to look appealing. This point was driven home repeatedly during the event, and some candid insights were shared.
When it comes to the discussions Mathieu Roche, co-founder and CEO of ad tech company ID5, has been having with investors, the word “stability” seems to be popping up quite a bit. They’re delving deep into his company’s financial structure and path to profitability, which is making him ponder the future. Is ID5 ready to stand on its own financially, or does it need more funding? If it’s the latter, well, that’s going to involve significant research to find that cash and some realistic conversations about the terms of any potential deal”.
American AI Startups Quietly Raise Money From Top Chinese VC Firms, Including Sequoia Capital China | The Information
“Major Chinese venture capital firms are quietly investing in American artificial intelligence startups, undeterred by growing concerns from U.S. officials about Chinese involvement in local technology firms.
For example, Sequoia Capital China, the biggest VC firm by assets in mainland China, recently invested in UTA, or Universal Travel Assistant, a California-based stealth startup that’s developing an AI chatbot to help people plan and book trips, according to two people with knowledge of the matter. Sequoia China also has invested in Opus Clip, a California-based startup founded last year whose AI video tool helps podcast creators such as Scott Galloway generate short video clips from long episodes, according to two people with knowledge of the matter.
Sequoia China is not alone. Prominent Chinese VC firms including ZhenFund, Source Code Capital, Capital Today and MiraclePlus, formerly a Chinese affiliate of Y Combinator, have also invested in AI startups in the U.S. over the last year or so, said people with knowledge of the deals. Neither the firms nor the startups have announced the deals”.
“Enable, a startup that sells rebate software to trading partners, has raised $120 million in a latest funding round that valued it at $1 billion, the company said on Tuesday.
The funding round was led by its existing investor Lightspeed Venture Partner. Its previous capital raise over a year ago had put Enable’s value at over $800 million. The fresh private funding in a slowing market for growth stage financing comes as the software firm more than doubled its revenue, according to the company.
The company said it plans to invest in research and development to apply artificial intelligence (AI) in its products, from generating contracts to extracting pricing insights from data to help customers drive more sales.
It is also eyeing geographic expansion of its global presence. Enable now employs about 550 workers across the U.S., Canada, Europe and Australia. The U.S. accounts for less than half of its revenue. Butt, who ran the company without venture capital funding in its early years, said he is still paying attention to unit economics, but that the focus at this stage is on growth.”
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