Despite the delay in venture capital activities, there is still a mountain of money flowing through startups today. businessupdates.org+ is launching a series of posts that look at recent notable corporate rounds, exit activities, and other news pertaining to the financial side of building new technology companies.
While banks are dealing with the crisis started by the bankruptcy of the well-known, startup-friendly Silicon Valley Bank, technology startups are still more than busy raising capital. They also look for exits. More former than latter given the frozen IPO market. But while we wait for an important starting point for startups to wake up, we can still keep an eye on where and how the money flows into their world.
Notable rounds of the week
Etoro reloads with a valuation of $3.5 billion
- After the SPAC deal fell through, consumer trading service eToro was left without an expected new tranche of capital and a new valuation. However, it had previously made a commitment for new funds if its SPAC deal fell through, capital it has now raised.
- The round matters because of its size (nine digits), industry (fintech has faced appreciation in recent quarters), and underlying financials. Despite some growth since 2020 in 2022, the company shrank compared to the 2021 period last year. This means that we see a huge consumer fintech company setting a new valuation under difficult circumstances. Fintech founders should take note.
Seed Club Ventures secretly sneaks away with $25 million to make DAO dreams come true
- Many people assumed that interest in DAOs, or decentralized autonomous organizations, had faded over the past year along with the fortunes of crypto brethren. But it turns out there are still some people very interested in the concept of communities making their own decisions about how to spend millions of dollars.
- Seed Club Ventures, a 63-member consortium of VCs, individual investors, family offices and various entities that still believe in web3, recently came out of nowhere with a $25 million fund to help DAOs do just that.
- This matters because that $25 million goes to really early-stage projects to build much-needed tooling for DAOs. It has already supported projects like Guild, Stability AI, Lens and Metalabel. Such tooling will actually help take DAOs to a level where they can realize some, if not all, of the potential of fully decentralized systems.
IntegrityNext raises $109 million to help companies ensure their supply chain is ESG compliant
- There is a lot of politics around environmental, social and governance (ESG) investment policies for a reason: compliance with ESG standards requires companies to examine the breadth and depth of their activities to ensure things are being done responsibly. That can be expensive, tedious and take a very long time.
- Munich-based IntegrityNext is doing something very special to help companies solve that problem: it helps companies monitor their supply chains so they can quickly discover where and how to optimize the supply chain and meet ESG requirements.
- This fundraiser is really good news for European companies as it will be easier for them to adopt ESG policies that were previously “nice-to-have” and will soon become “must-have” as EU regulations tighten is becoming.
Kream rushes to a $742 million valuation because fashion nerds love the circular economy
- In a world of abundance, some things are rare, which is why luxury goods reseller platforms exist. Kream, which spun out of Korean e-commerce giant Naver, has only been around for two years, but the company has achieved incredible success as fashion-conscious shoppers flooded the store in search of high-end, rare sneakers, watches, bags, accessories and clothing.
- Kream’s $168 million fundraiser is interesting because the company will invest heavily in its peers to build a reseller network that covers much of Asia — meaning someone in Japan can buy limited edition sneakers that are only available in Japan have been launched.
- It’s also good news for the growing resale market in Asia, as it signals consumer interest in collectibles and other luxury items, which could spur further investment in this space.
Kredivo Raises Massive $270 Million Series D to Make Credit More Accessible for Asians with Low Bank Accounts
- It’s no secret that the massive underbanked population in Asia’s emerging economies is a big market for fintech to disrupt, and Kredivo, which aims to increase access to credit in Indonesia and Vietnam, has certainly struck gold with a user base that about the size of Indonesia. credit card-holding population.
- The company’s $270 million oversubscribed Series D is proof that growth can be achieved by making people’s lives easier and helping them access banking services easily and seamlessly.
Other startup and venture capital news
The enterprise slowdown slows down even the fastest startup categories
- It’s a sad reality of the world that sometimes even diamonds don’t have buyers, and that seems to be working out well in startup land right now: Even formerly hot API startups are suffering from the slowdown in business.
- According to data from GGV, which tracks funding from 63 API companies, startups in this category raised about $2.15 billion in 2022, less than half of what they raised a year earlier. The number of deals has also fallen. In the fourth quarter of 2022, such startups raised a paltry $134 million, which is lower than the previous three quarters of the year. That must be tough.
- This is important to us because while API startups are at the forefront of usage-based pricing models, which is arguably the future of software sales, they are still subject to broader market pressures. Their struggles indicate that no matter how hot you are in an industry, dollars are likely to become increasingly difficult to come by.
Coinbase executives are angry at the SEC’s rain on their parade
- The crypto world is not happy with how lawmakers are handling it. Coinbase’s CEO recently pretty much said that the government should make a decision on regulation already after the SEC sent her a message from Wells, which basically means the government will go after Coinbase and similar companies for “violations of the law.” federal securities laws. ”
- We more or less agree with Coinbase here: there really isn’t much precedent for what the crypto world is going through, and adapting the SEC’s nearly age-old laws to the crypto economy feels very much like a squared-off situation. pens and triangles.
- Clearly, the SEC really needs to strengthen its beliefs about how crypto should be traded so that the broader ecosystem can just follow the rules.
Roofstock is cutting 27% of staff in second round of layoffs
- Proptech startups are having a moment and their employees seem to be paying for it. Rising mortgage rates and the general housing slowdown have not been good for companies that depended on people living their American dream.
- But buying a house in this economy? A lot of people basically said “yeah, right,” which actually led to Roofstock, which lets people buy and sell rental properties in dozens of U.S. markets, and decide that for the second time in the U.S., it needs to lay off 27% of its workforce. less than two quarters.
- The company is trying to stay afloat in a sinking housing market, which makes sense, but what doesn’t work is that it was valued at $1.9 billion just a year ago. This is currently not good news for the wider proptech market.
4 Indian investors explain how their investment strategy has changed since 2021
- Indian startups started 2022 with pretty good prospects as the global business slowdown had not yet penetrated the country. But it happened, leading to a 70% fall in funding in the second half of the year.
- While we’re sure investors in the country saw it coming, how did they recalibrate their sensors for the new climate? After questioning some investors Jagmeet found that they slowed down to begin with, opting to make safer bets and generally making sure their portfolio companies have enough runway to hold out for however long this downturn is going to last.
- Indian investors are also telling their startups to step back, solidify their business models and focus on the basics to reach the next milestone. And if necessary increase a down round, because life > death.
Keep an eye out for HR unicorns when the tech IPO market reopens
- Do you hear that? That’s Alex giggling in excited anticipation of all the S-1s we’re likely to get if HR unicorns continue to grow as fast as they have.
- The startup group’s ARR growth and regular EBITDA output — and therefore valuations — seem almost immune to the slowdown, as unicorns like Deel, Velocity Global, Gusto, and Ripple continue to grow into new markets and categories.
- This means HR technology companies will likely be among the first to go out the door in IPO season. However, we are curious about one thing: how long can the startups in question grow without going to war with each other, perhaps in the form of price cuts?