The Up Round #13
Rash of European Fund Announcements, Forum Ventures Report, Talent Moves Galore
The Memo
Hello from cold and snowy Tallin, Estonia where I welcome you to the 13th issue of The Up Round. As a reminder, this is a "round-up" of relevant news and resources for fund managers building a best-in-class firm. Expect us to land in your inbox every other weekend.
I spent the weekend with some of the Dynamo team in Tallin, Estonia after Slush 2023 in Helsinki. It was pretty awesome to walk around in the cold and scale castles and cathedrals while taking in some medieval history that’s less accessible in the US. We’re off to Berlin shortly!
A few interesting things from the past week amongst European GPs:
- European GPs are much more active in publicly announcing their funds. This is true even as they are in-flight (as seen below)
- European LPs are still seen to be on the sidelines in support emerging managers and the broader asset class. Most funds end up taking money from the EU FoF but GPs tend to gripe around the controls and reporting requirements of doing so
- There are still signs of “froth” in the EU seed market with some companies showing up and raising outsized rounds and outsized valuations to the tune of €4M in the €20M+ valuation range without proving much
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X’s & O’s of Firm Building
Forum Ventures’ State of the Market Report (link). Forum Ventures released a report that sheds light on this and more, exploring the evolving dynamics of startup funding in 2023. Featuring perspectives from leading investors at B Capital, Atento Capital, High Alpha, Right Side Capital Management and more, this report is your guide through the complexities of today's VC market.
US Emerging Managers Seeing Fundraising Rebound? (link). Despite a tougher fundraising landscape in 2022, emerging venture managers have fared better in 2023, raising $11B across 170 funds in the U.S. While they won't match the 2022 total, their resilience and unique focus areas have allowed them to maintain a significant share of the capital raised compared to established VCs.
📽️ Newcomer: Cerebral Valley with Vinod Khosla. (link). At 68 years old, Khosla works 80 hours a week and has ambitions to invest for another 25 years. More specific to the X’s and O’s, Khosla believes that there is still great opportunity for investments despite high valuations and also notes that America is in a techno-economic war with China that brings large opportunities with it. Interestingly, Khosla is anti open source AI due to the national security risk is brings with it.
How to Overcome Poor Data Quality When Applying ML to Early-stage Venture (link). “In essence, applying machine learning to venture capital is an exercise in applying ML to a complex problem space. It's less about the data volume and more about the deconstruction of problems into machine-learnable components, and then, over time, reconstructing them into a cohesive, end-to-end process – or as near to that goal as is possible or desirable.”
Fund Debuts
NP-Hard Ventures Raises Debut €12M Fund (link). The Amsterdam-based fund will focus on founders solving very big and hairy problems, focused on creating the building blocks of tomorrow. The fund has made 15 investments with plans to add 20 more.
Spanish Bcombinator Raising €40M Fund (link). The fund is targeting 100 companies with the majority coming through it’s acceleration program. The fund will invest €50k-€100k initially with €500k of follow on given it has 50% of AUM dedicated to reserves. Bcombinator has historically run it’s accelerator and my take is that there wasn’t a formal fund with the ability to invest in companies sourced outside of the program.
Tritemius Announces €50M Web 3.0 Fund (link). The fund will invest €150k-€3M in companies using Web 3.0 in application areas such as digital identity, decentralized finance, infrastructure, gaming, and social.
SEVA Debuts with $85M Growth Fund. (link). SEVA means “selfless service” in Sanskrit and core the values of the fund led by 28-year old Shalin Mehta. LPs include institutional investors, university endowments, charitable foundations, family offices and founders the team previously invested in. The fund was oversubscribed and while it has not made any investments yet, will invest $5M-$15M in profitable, founder-led companies.
Failup Ventures Announces First Close of €50M Fund I (link). With €30M in hand, Failup will invest in “mission driven founders” with €200k-€1M checks. The fund touts it’s strong networks in the US as a differentiating point.
53 Stations Announces $190M Fund (link). Supported by The Prizker Organization, as the sole LP, the new fund will focus on early stage startups across industries. The fund has invested in seven companies including: Altana, Black Buffalo, Collective, Flux.AI, and Whisper Aero.
Newlands, Backed By Jan Koum of WhatsApp Fame Ramping VC Investments (link). It’s unclear if Newlands is a family office or a proper fund but what is clear is it’s $10B of public equity investments, mostly tech stocks, and that it’s beginning to make investments in the early-stage startup ecosystem. Led by Michael Abramson, formerly a Partner at Sequoia, Newlands has three other employees and has not responded to requests for comments.
Other Fund Stuff
Molten Acquires Forward Partners (link). “The proposed acquisition will bring 43 new early stage, disruptive technology companies into the Molten portfolio, and expand the resources, expertise, and networks available to Molten in support of some of Europe’s most innovative firms.”
Riverwood Closes $1.8B Growth Fund (link). The fund will continue the focus on growth stage investments that are either profitable or with positive unit economics - both in a minority or majority structure. Having interacted with the team, I’d say that Riverwood is focused on the strong companies that may not get love from the traditional Sand Hill Road firms due to <100% YoY growth but still have strong long-term prospects.
Tola Capital Closes $230M Fund III (link). The new fund will invest in 25-30 companies, globally with $1M-$4M checks for seed-stage companies and $5M to $15M for Series A and B companies. The firm has already deployed capital into eight companies, including Arcus, ESG Flo, FeatureByte, Fetcher, Holistic AI, Langsafe, Lumeus and Zilla.
Oxx Partners Raises $190M Fund II (link). Oxx invests in companies that have reached P/M-fit and leans into go-to-market to drive growth.
Twelve Below Closes $108M Across Two Funds (link). The fund aims to lead or co-lead pre-seed and seed rounds with the goal of having 10-15% ownership in it’s $80M core fund. The balance of the capital raised was for it’s opportunity fund. LPs include university endowments, institutional fund of funds, and family offices.
TIIN Capital Announces First Close of €100M Fund V (link). The fund plans to invest in 12 portfolio companies focused on cybersecurity across Europe with one already made thus far in the Netherlands.
NXTP Closes $98M Fund III for B2B LatAm Opportunities (link). NXTP invests in LatAm fintech, payments, eCommerce enablement, B2B marketplaces, data, and AI. It will seek to invest at pre-seed through Series A with initial checks ranging from $500k-$5M. Capital is also being held for follow-on investments.
Talent Tracker
Defy.vc Welcomes Medha Agarwal as General Partner and Amy Yin as Venture Partner (link). The news follows Defy’s $300M Fund III that was announced earlier in the year. Agarwal joins from Redpoint where she led investments across vertical SaaS, fintech, marketplaces, and healthcare over seven years. Yin joins from Defy, portco, OfficeTogether that was acquired by Envoy. Prior to OfficeTogether, she spent a decade at Facebook and Coinbase while also angel investing.
Scott Shleifer Steps Down as Head of Private Equity at Tiger Global (link). Shleifer was one of the leaders behind Tiger’s agressive push into venture in the last few years. He will remain an advisor with the firm but not part of the new $6B fund they are raising. One reason for the departure was that Shleifer was based in Florida (living Trump’s old home) whilst the core Tiger team was based in NYC.
Anna Patterson Leaves Gradient Ventures (link). Perhaps a signal of the times where we’re seeing turn over across funds, Patterson announced her exit from the Google-backed, AI-focused fund after founding it, seven years ago.
MG Siegler Steps Into Venture Partner Role at GV (link). With the arrival of his second child, Siegler will step back into a Venture Partner role at GV in the midst to his relocation to London.
Ensemble Adds Two New Members (link). Ian Heinrich joined as an Associate from Collaborative Fund while Rooney Pitchford joined as Chief of Staff from Makena Capital Management.
Signal Fire Adds Nine New Team Members (link). “We’re excited to welcome Sooah Cho as a Partner, focused on early-stage health and life sciences tech; Veronica Mercado as a Principal and Chief of Staff to CEO Chris Farmer, focused on enterprise AI through SignalFire’s AI Lab; Lisa Liu as a Principal, focused on venture and growth-stage software investments; Bradford Jones as a Principal, focused on early-stage AI/ML and vertical SaaS; Lauren Nguyen as the Head of Marketing, using AI and integrated systems for founder outreach; Asher Bantock as the Head of Research, developing data insights from our AI to support our investment team and portfolio companies; Sadasia McCutchen as our Head of Ecosystem, cultivating our corporate, advisor, and mentor network; and Mario Espindola as the Senior Director of Talent, who will shape our portfolio companies’ talent strategies, and Andrew Reid as Director of GTM Recruiting, will be assisting portfolio companies with talent acquisition initiatives across go-to-market functions.”
Paul Graham Fired Sam Altman from YC in 2019 (link). The Open AI saga that unfolded in the prior weeks raised questions into Altman’s departure from YC several years ago. It turned out that Altman was dismissed personally by Graham for investing in startups personally that were found via the YC platform. Governance has since been tightened at YC, avoiding this conflict of interest amongst partners.
LP Radar
RWJBarnabas Health Appoints Kathleen Jacobs as CIO (link). “The ex-NYU CIO will manage ~$8B in assets for RWJBarnabas Health. She will help formulate the strategy for the health system’s myriad portfolios, which include long and short-term capital, ERISA plan assets, and endowment pools of capital.”