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The official channel of V3V Ventures. We share updates on our investments, portfolio companies, and fund activities. Buy Ads: @JamesCookTg (this is our only account).
🟢 U.S. Unicorn Growth Slows in June: A Shift in the Startup Landscape
➡️ June 2024 saw the addition of only four new unicorns to The Crunchbase Unicorn Board, all U.S.-based, marking the lowest monthly count this year. Interestingly, none of these newcomers are tied to the generative AI sector, signaling a potential shift in investor focus. These companies, aged 8-9 years, span diverse sectors including cybersecurity, sales & marketing, media & entertainment, and biotechnology.
➡️ Despite the slowdown in June, the first half of 2024 outpaced the same period in 2023, with 56 new unicorns compared to 50. The new entries added $104 billion in value to the board, with Elon Musk's xAI contributing a significant $24 billion. The U.S. continues to lead in unicorn creation, followed by China, with emerging markets also showing promise.
For venture capitalists, this data suggests a maturing startup ecosystem where achieving unicorn status is taking longer but potentially resulting in more stable, diverse companies. The slowdown in June might indicate a more cautious investment approach, but the overall growth in H1 2024 points to continued opportunities in the startup landscape, particularly in established tech hubs and emerging markets.
🟢 Exoticca Secures €60M Series D for Multi-Day Tour Package Platform
➡️ Spanish startup Exoticca has raised a €60 million Series D round led by Quadrille Capital, showcasing the growing interest in digitizing complex travel bookings. The company's platform aims to revolutionize multi-day tour packages by offering real-time pricing and potentially reducing costs by up to 30%. Exoticca has seen impressive growth, doubling sales year-over-year since 2015 and now operates in eight countries, with a strong focus on the North American market.
➡️ The startup differentiates itself from competitors by providing a comprehensive solution that connects various travel components in one platform. With this new funding, Exoticca plans to expand its reach into Latin America, the Middle East, India, and China, further solidifying its position in the digital travel sector.
Exoticca's success story highlights the untapped potential in modernizing traditional travel services. The substantial funding and ambitious expansion plans signal growing investor confidence in platforms that streamline complex travel arrangements, presenting exciting opportunities in the evolving digital travel landscape.
🟢 QA Wolf Raises $36M for Automated App Testing Revolution
➡️ QA Wolf, a startup revolutionizing app quality assurance, has secured $36 million in Series B funding led by Scale Venture Partners. The company offers an "outcomes-based test coverage" approach, allowing developers to focus on feature work while QA Wolf handles comprehensive testing. This model has helped customers ship 2-5x more often and reduce rework. QA Wolf supports automated testing for Android, iOS, web, and Salesforce apps, with built-in maintenance and bug reporting capabilities. The platform's unique pricing model charges a flat rate for test creation, unlimited parallel test runs, and 24-hour failure investigation, aligning with customer goals for efficient coverage.
QA Wolf's significant funding and innovative approach to app testing highlight the growing demand for efficient, automated QA solutions. As app development continues to accelerate, tools like QA Wolf that streamline the testing process while improving outcomes are likely to see increased adoption.
This investment signals a potential shift in how companies approach quality assurance in the fast-paced world of app development.
🟢 VCs Spot Opportunities in CrowdStrike Outage Aftermath
➡️ The recent global outage caused by a CrowdStrike update has VCs eyeing new investment opportunities in tech infrastructure and security. Key focus areas include:
— Non-kernel cybersecurity solutions (e.g., Wiz, Oligo Security)
— IT management and monitoring tools (e.g., Fleet)
— Cloud observability companies
— API integration management (e.g., Middleware)
➡️ VCs emphasize the need for "watching the watchers" in cybersecurity and exploring alternatives to deep kernel access. The incident highlights vulnerabilities in critical systems and opens doors for startups offering innovative solutions. Investors predict a rise in companies addressing system stability, security, and infrastructure management, especially in sectors like finance and healthcare still relying on outdated tech.
For founders and VCs, this crisis presents opportunities in cybersecurity and IT management. As our digital world grows more interconnected, startups tackling these challenges could see significant growth. Keep an eye on innovations in non-invasive security and infrastructure resilience — they may shape the next wave of tech investments.
🟢 Alphabet's Potential $23B Wiz Acquisition: Implications for Venture Capital
➡️ Alphabet is reportedly in advanced talks to acquire cybersecurity startup Wiz for $23 billion, potentially marking its largest acquisition to date. This deal could significantly impact the venture capital and startup ecosystem:
1. M&A Catalyst: The acquisition could revitalize the stagnant startup M&A market, potentially encouraging other large tech companies to pursue similar deals.
2. Exit Opportunity: It represents a massive exit in a period of limited liquidity options for startups, especially late-stage ones.
3. Market Confidence: The deal's size signals strong market confidence in AI and cybersecurity sectors.
4. Limited Ripple Effect: While significant, the deal's uniqueness means it may not substantially alleviate the liquidity crunch for most late-stage startups.
5. Cybersecurity Focus: Highlights the growing importance and value of cybersecurity in the tech industry.
While Alphabet's potential acquisition of Wiz could inject much-needed energy into the startup M&A market, its impact may be limited due to the deal's exceptional size. Nonetheless, it underscores the enduring value of innovative tech startups and may encourage more strategic acquisitions in the near future. Investors and startups should closely monitor how this deal, if completed, influences market dynamics and valuations in the coming months.
🟢 28 US AI Startups Raise Mega-Rounds in 2024: A Venture Capital Surge
➡️ The AI sector continues to attract massive venture capital investments in 2024, with 28 US-based AI startups securing funding rounds of $100 million or more. Highlights include xAI's staggering $6 billion Series B, Scale AI's $1 billion round, and Xaira Therapeutics' $1 billion Series A. The funding spans various AI applications, from robotics and drug discovery to enterprise search and coding assistance. Notable investors include tech giants like Microsoft and Nvidia, as well as prominent VC firms such as Andreessen Horowitz, Sequoia, and Lightspeed Venture Partners.
This trend underscores the continued faith in AI's potential to transform industries and create significant returns for investors.
The sheer volume and size of these mega-rounds demonstrate that AI remains a hot sector for venture capital in 2024. As these well-funded startups develop and deploy their technologies, we can expect to see significant advancements and potentially disruptive innovations across multiple industries in the coming years.
🟢 Pro Rata Funds Emerge as New Trend in VC Investing
➡️ A new trend is emerging in venture capital: dedicated funds to help seed VCs exercise their pro rata rights in later funding rounds. Companies like Alpha Partners, SignalRank, and SaaS Ventures are raising capital specifically to support early-stage investors in maintaining their ownership percentages. This trend addresses the challenge seed VCs face when larger firms lead later rounds and try to squeeze out earlier investors.
➡️ SaaS Ventures, for example, recently closed a $24 million fund for this purpose. The strategy allows smaller VCs to continue participating in their successful portfolio companies' growth, even as valuations skyrocket. This approach is gaining traction as later-stage deals become more competitive and early investors seek ways to maintain their stakes in potential unicorns.
This trend could mean more support from your early investors throughout your startup's growth journey. It may also lead to more complex cap tables and negotiations in later rounds. Consider how you can leverage this trend to maintain strong relationships with your seed investors while still attracting larger VCs for growth rounds.
Be prepared to navigate the potential conflicts between new and existing investors, and consider how pro rata rights might impact your future funding strategies.
🟢 Sequoia Capital Confirms Stripe's $70B Valuation, Offers Liquidity to Early Investors
➡️ Sequoia Capital, a major investor in payments giant Stripe, has made a significant move to offer returns to its limited partners (LPs) in funds raised between 2009 and 2011. The venture firm has proposed buying up to $861 million worth of Stripe shares, reflecting both investor demand for liquidity and Sequoia's confidence in Stripe's future.
➡️ This development comes amidst a dry IPO market, with only four venture-backed tech IPOs in 2024 so far. Stripe, once valued at $95 billion in March 2021, saw its valuation drop to $50 billion in 2023 before climbing back to $70 billion, as confirmed by Sequoia's recent 409A valuation.
➡️ Sequoia's total investment in Stripe since 2011 amounts to $517 million, with their current position valued at $9.8 billion. The firm remains optimistic about Stripe's durability across economic cycles and its future prospects. This move by Sequoia, along with Stripe's recent tender offer, suggests that the fintech giant may not be planning an IPO in the near future.
Sequoia's creative approach to offering liquidity highlights the evolving dynamics in the venture capital world, especially for long-held private investments. As Stripe continues to grow impressively, crossing $1 trillion in total payment volume in 2023, it remains a key player to watch in the fintech space, whether it chooses to go public or remain private.
⭐️'BOOOM' - the new €17m fund from solo GP Felix Plapperer
#VentureNews
💡 This week Felix Plapperer is officially joining the ranks of Europe’s solo GPs, as his VC firm, BOOOM, announces a final close of its first fund at €17m.
⭐️ The Berlin-based fund will invest in European B2B software startups at pre-seed and seed, with a particular focus on supply chain and procurement tech startups.
If you’re thinking that sounds familiar, it is — this is far from the only B2B SaaS-focused solo GP fund in Europe — but BOOOM has a twist. The three founders of German logistics unicorn sennder — David Nothacker, Julius Köhler and Nicolaus Schefenacker — “co-initiated the fund” and have committed to mentor all of its portfolio companies, Plapperer tells Sifted.
🍔 AI-powered Regard nabs $61M to find missed illness, boost hospital revenue
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👍 People in tech often say that data is the new oil. That phrase, coined by British mathematician Clive Humby, of course implies that data is valuable.
The results of the last quarter can be found in the Crunchbase analysis.
👍 Data about a person’s health can also provide meaningful insights and improve outcomes, but only 3% of patient data is currently used by physicians, according to the World Economic Forum. Although doctors know they can glean useful information from patient data, they don’t have the time to review every detail in the medical record.
Regard, a digital health startup founded in 2017, wants to help physicians save time and increase the accuracy of diagnosis by analyzing patients’ health data using AI. Regard announced on Thursday that it raised a $61 million Series B round led by Oak HC/FT, with participation from Cedars-Sinai Health Ventures and existing investors TenOneTen, Calibrate Ventures and Techstars. The company is now valued at $350 million, according to a person familiar with the matter.
⭐️Investments in the late-stages have increased
#VentureNews
💡 Financing for late-stage startups reached $36 billion, compared with $33 billion in the second quarter of 2023. Large sums were received by companies that work in the field of developing basic AI models and infrastructure, autonomous driving, electric vehicles, cybersecurity, drug development and quantum computing.
🔗 Source
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📎 Central eastern Europe’s most active early-stage VCs
#VentureNews
📱 In central eastern Europe’s young startup ecosystem, early-stage investments make up the vast majority of VC transactions. In 2023, 92% of the 818 deals closed in the region were at pre-seed (611) or seed (144), according to data platform Dealroom.
Europe’s economic downturn has hit the region hard — and 2023 saw startups raise less early-stage funding than 2022. In 2022, CEE startups raised €140m in pre-seed funding and €324m in seed funding; in 2023, that dropped to €99.8m at pre-seed and €278m at seed, according to Dealroom.
📱 Local investors have been involved in most of those deals, with two Bulgarian VCs — Vitosha Venture Partners and Innovation Capital — doing more deals than any other investors in the region in the past 12 months.
Using data from Dealroom, Sifted has selected the CEE investors that did the most new (not follow-on) pre-seed and seed deals in the last 12 months:
1/ Vitosha Venture Partners
2/ Innovation Capital
3/ Baltic Sandbox Ventures
4/ Metaplanet
5/ SMOK Ventures
6/ Specialist VC
7/ Sofia Angels Ventures
⭐️AI startup Hebbia raised $130M at a $700M valuation on $13 million of profitable revenue
#VentureNews
💡 Hebbia, a startup that uses generative AI to search large documents and respond to large questions, has raised a $130 million Series B at a roughly $700 million valuation led by Andreessen Horowitz, with participation from Index Ventures, Google Ventures and Peter Thiel.
⭐️And its funding demonstrates that 50x annual recurring revenue (ARR) is becoming the norm for AI startups, especially ones that have booked millions of profitable revenue early in their journey.
The formal funding announcement confirmed most of the details previously reported by TechCrunch, although Hebbia continued to raise more funds, another $30 million, after our report. But Hebbia has not yet filed an updated disclosure on this funding round to the SEC, and the latest one at this time still says it was raising around $100 million of new equity.
🔔 Deep tech startups with very technical CEOs raise larger rounds, research finds
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💻 SaaS founders trying to figure out what it takes to raise their next round can refer to Point Nine’s famous yearly SaaS Funding Napkin. (The term refers to “back of the napkin” plans or calculations.)
Now, European hardware deep tech teams have a similar resource from First Momentum, a pre-seed fund investing in technical B2B and deep tech startups.
💻 With its Deep Tech Hardware Napkin, the German VC firm hopes to democratize knowledge and benchmarks on funding, team, product and commercialization, broken down by stage.
Benchmarks are particularly helpful to first-time founders or those without a big network in startups and VC. This is especially true in deep tech, where many entrepreneurs come from a research background. “They don’t know what’s a wrong decision or a good one, because they don’t have data on it; they are not in entrepreneurial circles, they don’t have 10 to 15 friends who have started companies before,” general partner David Meiborg told TechCrunch.
⭐️89% of corporate investors plan to increase or maintain level of startup investments
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💡 Back in 2010, corporates were by no means a go-to investor for European startups, accounting for just 10% of the funding they raised. Nowadays, the picture is quite different; so far, in 2024, corporates account for over a quarter of startup funding, in terms of volume of capital invested, according to data platform Dealroom — a huge uptick in interest.
⭐️ And that share is likely to only increase, finds a new report from advisory firm Mountside Ventures and VC firm Love Ventures published today and exclusively shared with Sifted. 89% of corporate investors plan to increase or at least maintain the number of startup investments they do in the next three years compared to the last three years.
The report surveyed 104 CVCs around the world, with a collective £20bn in assets under management. Over 60% invested via the balance sheet; less than a third have a separate fund vehicle. Respondents include Aviva, DMG Ventures, BMW i Ventures, FT Ventures, ING, Legal & General, Schenker Ventures, Societe Generale and Wayra.
🗣️Mayo Clinic Leads Hospital AI Readiness Index
➡️ CB Insights has released its Hospital AI Readiness Index, ranking top US health systems on their preparedness for AI adoption. The index evaluates health systems based on innovation (patents, acquisitions, and deal-making) and execution (AI implementation in clinical practice and internal operations). Mayo Clinic tops the list with a score of 46.21, excelling particularly in innovation. Intermountain Health and Cleveland Clinic follow closely.
➡️ Key activities driving AI readiness include investments in AI startups, patent filings in areas like cardiovascular health and oncology, and partnerships with AI companies for clinical decision support and pathology platforms. The index highlights the growing importance of AI in healthcare, from ambient documentation to surgical tools and digital wound care.
For venture capitalists and healthcare innovators, this index provides valuable insights into which health systems are leading in AI adoption and where opportunities for partnerships and investments may lie. It also underscores the accelerating integration of AI across various aspects of healthcare delivery and management.
🗣️ Reality Check: The Harsh Truth About Startup Outcomes
➡️ Data from 3,067 US startups incorporated in 2018 reveals a sobering reality: 49% have closed, 45% are ongoing, only 5% were acquired, and a mere 0.2% reached IPO. This underscores the challenges startups face in achieving successful exits. To navigate these odds, focus on:
*️⃣Becoming a category-defining business like Uber or Netflix
*️⃣Choosing investors who offer guidance, not just capital
*️⃣Balancing growth with profitability for sustainability
➡️ The journey to building a formidable enterprise is a marathon, not a sprint. Reaching a sustainable model could be more valuable than chasing "unicorn" status. For AI Security startups and others, applying these principles can help create lasting value, regardless of exit outcomes.
While IPOs and acquisitions are rare, focusing on fundamentals like category leadership, strategic partnerships, and sustainable growth can lead to success. Remember, building a strong, profitable business is often more valuable than chasing elusive exit strategies.
🗣️ SPVs: The Backdoor to Hot AI Startup Investments
➡️ Venture capitalists are leveraging Special Purpose Vehicles (SPVs) to offer smaller investors access to shares in coveted AI startups like Anthropic, OpenAI, and xAI. This trend is driven by high demand and limited access to these companies' shares. Early backers create SPVs to exercise pro-rata rights, selling portions of their allocations to external investors.
➡️ The terms and fees vary widely, with some SPVs charging up to 2% of invested capital and 20% of profits. Multiple layers of SPVs can exist for a single company, each adding fees. Notably, Anthropic shares became widely available due to FTX's bankruptcy sale, while xAI's recent $6 billion round included SPVs with high fees. While these vehicles offer rare access to hot AI investments, they come with significant risks, including lack of direct company information and potentially high fee structures.
SPVs present a unique opportunity for smaller investors to access high-profile AI startups, but caution is crucial. Always conduct thorough due diligence and carefully consider the terms and fees before investing through these vehicles.
🗣️ SAFEs Dominate Pre-Seed & Seed Fundraising: Key Trends for Founders
➡️ Recent data reveals SAFEs (Simple Agreement for Future Equity) are now the preferred financing instrument for pre-seed and seed rounds across most startup sectors. Industries like Education, AdTech, and Fintech show over 90% SAFE usage, while more tangible asset-focused sectors like Medical Devices still lean towards Convertible Notes.
📌 Key SAFE trends include:
1. Valuation caps are nearly universal, with 62% having caps only and 29% including both caps and discounts.
2. Post-money SAFEs have become standard, accounting for 85% of 2024 agreements.
3. When discounts are used, 20% is the typical rate for both SAFEs and Notes.
4. SAFEs are more prevalent in major tech hubs, but their adoption is growing across all regions.
Founders, understand these trends to navigate your early-stage fundraising effectively. While SAFEs offer simplicity and founder-friendly terms, consider your industry norms and investor preferences when choosing between SAFEs and Convertible Notes.
🟢 28 US AI Startups Raise Mega-Rounds in 2024: A Venture Capital Surge
➡️ The AI sector continues to attract massive venture capital investments in 2024, with 28 US-based AI startups securing funding rounds of $100 million or more. Highlights include xAI's staggering $6 billion Series B, Scale AI's $1 billion round, and Xaira Therapeutics' $1 billion Series A. The funding spans various AI applications, from robotics and drug discovery to enterprise search and coding assistance. Notable investors include tech giants like Microsoft and Nvidia, as well as prominent VC firms such as Andreessen Horowitz, Sequoia, and Lightspeed Venture Partners.
This trend underscores the continued faith in AI's potential to transform industries and create significant returns for investors.
The sheer volume and size of these mega-rounds demonstrate that AI remains a hot sector for venture capital in 2024. As these well-funded startups develop and deploy their technologies, we can expect to see significant advancements and potentially disruptive innovations across multiple industries in the coming years.
🗣️ Climate VC Funds Gain Traction with Institutional Investors
➡️ Climate-focused venture capital funds are experiencing a significant surge in popularity among institutional investors. In the first half of 2024, 3% of all VC funds were dedicated to climate startups, tripling from five years ago. These funds have attracted nearly 5% of all LP capital commitments this year, defying the general fundraising slowdown.
➡️ Notable climate funds raised include Chevron Technology Ventures' $500 million Future Energy Fund III and Norrsken VC's $342 million Fund II. The sector's resurgence is attributed to influential players like Bill Gates' Breakthrough Energy Ventures and Chris Sacca's Lowercarbon Capital. Factors driving this trend include strengthening regulations, public pressure for ESG adoption, successful exits, and increased federal and state grant funding for climate tech startups.
As the energy transition gains momentum, climate VC funds are becoming increasingly attractive to institutional investors. This trend signals a growing recognition of the potential in climate tech innovations and the crucial role of venture capital in driving sustainable solutions. Keep an eye on this space for potential high-growth opportunities in the coming years.
🟢 Menlo Ventures and Anthropic Launch $100M 'Anthology Fund' for AI Startups
➡️ Menlo Ventures, a major investor in AI startup Anthropic, has announced a collaboration to create a $100 million initiative called the "Anthology Fund". This fund aims to invest in pre-seed, seed, and Series A artificial intelligence companies, leveraging Menlo's close relationship with one of the world's leading foundational model companies.
➡️ The Anthology Fund will write checks starting at $100,000 and provide startups with $25,000 worth of credits to use Anthropic's models. This move comes after Menlo's recent investment of over $750 million in Anthropic, making it one of the company's top backers.
➡️ Tim Tully, a partner at Menlo Ventures, emphasized the opportunity to identify great companies building on Anthropic's technology or AI more broadly. The fund will use a proprietary machine learning tool to score and rank applications, with a more streamlined due diligence process compared to typical investments.
The Anthology Fund represents a strategic move by Menlo Ventures to capitalize on its strong position in the AI sector and foster innovation among early-stage AI startups. By offering both capital and access to Anthropic's models, this initiative could play a significant role in shaping the next generation of AI companies and technologies.
🟢 Halo Industries Secures $80M for AI-Driven Semiconductor Innovation
➡️ Thomas Tull's US Innovative Technology Fund has led an $80 million Series B funding round for Halo Industries, valuing the company at $300 million post-money. Founded by Stanford researchers in 2014, this Bay Area startup is revolutionizing silicon wafer production for semiconductors using cutting-edge laser manufacturing technology.
➡️Halo's innovative approach to creating silicon carbide wafers is crucial for powering AI data centers, EV charging infrastructure, and electric grids. The company's environmentally friendly and cost-effective process offers a significant advantage over traditional mechanical and thermal methods. With revenue generation beginning in Q2 2023, Halo aims to scale its technology commercially and potentially go public within 3-4 years.
📌 This investment highlights the growing interest in next-generation semiconductor startups, driven by the increasing energy demands of AI technologies and the push for onshore semiconductor production. As AI continues to reshape various industries, the need for more efficient and powerful semiconductors becomes ever more critical.
The substantial funding secured by Halo Industries underscores the potential for significant growth in the AI infrastructure sector. As we witness the rapid advancement of AI technologies, investments in companies like Halo become crucial for sustaining this progress.
Keep an eye on this space, as innovations in semiconductor technology will play a pivotal role in shaping the future of AI and its applications across industries.
💎 More ex-military officials are becoming VCs as defense tech investment reached $35B
#Venture
💻 The distance between Silicon Valley and the Pentagon just keeps getting smaller. As venture capitalists continue to pour money into defense tech startups, they’re turning to a new hiring pool: veterans and ex-Department of Defense officials.
Andreessen Horowitz hired Matt Shortal, an ex-fighter jet pilot, as its chief of staff; Lux Capital brought on Tony Thomas, former head of U.S. Special Operations Command, as an adviser; and Shield Capital’s managing partner Raj Shah served in the Air Force.
ℹ️ From Ethan Choi to Spencer Peterson, venture capitalists continue to play musical chairs
#VentureNews
© When Keith Rabois announced he was leaving Founders Fund to return to Khosla Ventures in January, it came as a shock to many in the venture capital ecosystem — and not just because Rabois is a big name in the industry.
© It was surprising because unlike in many other fields, venture capitalists don’t traditionally move around very much — especially those who reach the partner or general partner level as Rabois had.
VC funds have 10-year life cycles and partners have good reason to stay that course. In some instances, they may be a “key man” on a firm’s fund, meaning that if they leave, the fund’s LPs have the right to pull their capital out if they choose. Many partners and GPs also have some of their own money invested in their firms’ funds, which gives them further reason to stick around.
ℹ️ The growth of investments in AI
#VentureNews
© As the Crunchbase data analysis showed, And became the leading sector for the first time since the launch of ChatGPT from OpenAI. Despite investor concerns about revenue and high valuations, total funding in the second quarter was $24 billion, the largest amount raised in the AI sector in recent years.
© AI companies have received five of the six rounds of funding in the amount of $1 billion or more.
💎 Elon Musk's xAI raised $6 billion, and AI infrastructure provider CoreWeave raised $1.1 billion.
💎 The developer of Wave driverless driving technologies, the Scale AI data preparation campaign and the BioTech company Xaira Therapeutics have each raised $1 billion.
💎 Beyond And the $1 billion round was closed by the cybersecurity company Wiz.
💎 Index Ventures raises $2.3bn across two new funds to double down on AI
#Venture
💻 Global VC investor Index Ventures, a backer of German AI unicorn DeepL and UK neobank leader Revolut, has raised $2.3bn across two new funds to double down on AI investments.
Along with its new $800m venture fund and $1.5bn growth fund, Index is also still investing out of a separate $300m seed fund.
💻 The firm says that the new funds will have a strong focus on AI, at a time when the technology is developing at pace and the availability of talent globally is increasing.
“AI alone will revolutionise virtually every sector of the economy and open up whole industries to venture that have remained virtually untouched,” said Shardul Shah, partner at Index Ventures. “Meanwhile, hundreds of thousands of people have worked in hypergrowth startups globally and can transfer those lessons to the next generation of companies.
ℹ️ Iceland is dodging the VC doldrums as Frumtak Ventures lands $87 million for its fourth fund
#VentureNews
© Iceland’s startup scene is punching above its weight. That’s perhaps in part because it kept the 2021 hype in check, but mostly because its tech ecosystem is coming of age. Iceland attracted the most venture capital per capita of all Nordic countries in 2023, but that stat is somewhat skewed by its relatively small population of fewer than 400,000 inhabitants.
More tellingly, foreign co-investments in Icelandic startups reached a record in 2023. In this context, it makes sense to see VC firms raise more funding.
© Frumtak Ventures is a perfect example. The firm just closed an $87 million fourth fund that was oversubscribed — and significantly larger than its third $57 million fund.
Most of Frumtak’s limited partners are Icelandic pension funds. “We were in a very good position that all our existing LPs were happy to back us again,” Kristinsson said. As for geographic scope, he added, Frumtak will back Icelandic founders, but “focus on local innovation with global potential.”
ℹ️ Corporate venture firms are a steadily growing presence in Europe's startup scene
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© Most CVCs don’t have a long shelf-life: their median life span is a mere four years, according to business school LBS. The reasons for that are well-trodden. If the parent company has a tough year, or has a change of leadership or strategic direction, the CVC can be one of the first things to get the chop.
© Recent victims include British telecoms giant BT’s venture arm, which has stopped making new investments, and UK software and IT services provider Capita’s venture arm Scaling Partner, which has dropped from 16 to 4 employees over the course of this year, according to LinkedIn, and also stopped new investments. The parent company’s share price has also plummeted since January.
This year German software giant SAP also shut its CVC arm SAP.io — which has invested in five unicorns and seen 70 exits — although it still invests in startups via VC firm Sapphire Ventures.
Danish shipping giant Maersk is another which has shaken up the focus (and team) of its CVC, Maersk Growth, in the past year. The move came as a new CEO took the helm of the parent company, and thousands of job cuts were announced.
🔔 Europe's profitable startups
#VentureNews
💻 Two years ago, the US stock market tanked, growth-at-all-costs went out the window and get-to-profitability-ASAP came in.
Startups scrambled to follow the new VC mantra. More than 140k tech workers were laid off around the world in 2022; expansion plans were put on ice and markets were shut; and getting into the black became priority number one for founders.
Now, after an undeniably tough few years for our industry, more and more scaleups are announcing profitability.
Sifted hopes to track Europe’s biggest profitable private tech companies in this new database. We’ve included companies that have raised £100m+ and made an annual profit of £10m+. Data comes from news articles and data platform Dealroom.