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| Hey Insiders, Today's newsletter covers: - 🗳️ Creditors to vote on bankrupt crypto startup Celsius' repayment plan
- 👥 Away lays off 22 employees highlighting DTC struggles
- 💰 CodeScene's €7.5M funding round
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | U.S. Bankruptcy Judge Martin Glenn permitted Celsius to gather creditors' votes on the new proposal to revive the firm as a user-owned company led by investment firm Arrington Capital. Arrington-led consortium Fahrenheit LLC took over the crypto lender's assets through a bankruptcy auction earlier this year. The firm intends to distribute $2B worth of Bitcoin and Ether and repay customers in part with equity in the new company. More: - The new entity will assume Celsius' mining operations, institutional loans, VC investments, and $500M "liquid cryptocurrency" investments.
- Per Celsius lawyer Chris Koenig, the new firm would be able to start repaying creditors by the end of this year.
- Some individual creditors have opposed the repayment plan, pointing out that they would be forced to take equity in a new risky venture.
- With the Fahrenheit deal, retail borrowers could recover more than $0.85 on the dollar.
Zoom out: - The crypto lender declared Chapter 11 bankruptcy in mid-2022 after halting withdrawals on the platform a few weeks earlier.
- In the bankruptcy filing, the firm disclosed that it had $4.3B worth of assets and $5.5B of liabilities, giving it a $1.2B shortfall on the balance sheet.
Q: What are your thoughts on the repayment plan proposed by Fahrenheit? Let us know here. |     | |
| 2 | | Direct-to-consumer luggage startup Away laid off 22 employees in May, or 8% of its workforce. Away's chief commercial officer Laura Willensky was also let go as part of the previously unreported layoffs. The layoffs highlight the broader challenges faced by DTC brands, including scaling challenges, rising competition from incumbent retailers, and slowed growth. Adding to the complexities is a notable dip in venture funding. 
What the numbers say: VC funding for internet retail and B2C apparel startups has reverted to 2018 levels. Amidst the trend, Q2 2023 emerged as the only bright spot in recent quarters, closing out the three-month period with $3.9B. VCs have slowed dealmaking in the sector due to setbacks at fitness brand Peloton and mattress seller Casper. What happened: Away, co-founded by former Warby Parker executives Steph Korey and Jen Rubio, has raised $216M to date from investors, including Forerunner Ventures and Accel. The pandemic caused revenue to dip 50% to around $135M. The New York-based startup was last able to raise between $30M to $40M through a structured convertible note offering in 2020, which capped the valuation to $1.4B from the previous Series D fundraiser. DTC brands are now embracing retail options, as customer cost acquisition through digital mediums is proving to be more expensive and ineffective. | | | |
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| 3 | | Sweden-based SaaS company CodeScene has secured €7.5M in funding. Neqst led the round with additional participation from Luminar Ventures and Inventure. More: - CodeScene offers developers actionable insights tailored to their codebases and software organizations.
- Unlike traditional code analysis tools, CodeScene adapts its analyses for each customer and offers personalized recommendations based on their software practices, enabling teams to identify technical debt, optimize software architecture, and improve code quality.
- The capital infusion will enable CodeScene to further enhance its Software Engineering Intelligence (SEI) technology, expand its customer base, and solidify its leadership position.
- The company currently boasts users in more than 75 countries.
Why it matters: - Developers frequently constitute the most significant expenditure in non-senior corporate entities due to salaries and benefits, underscoring the importance of businesses leveraging their expertise efficiently and intelligently.
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| 4 | | SecureWorks, a cybersecurity company, is set to lay off 15% of its workforce in its second round of job cuts this year, totaling about 300 employees, aiming to streamline operations and achieve profitable growth. The company had previously undergone a 9% reduction in workforce in February. More: - The company expects to incur approximately $14.2M in costs related to the layoffs, covering employee termination benefits and real estate expenses.
- The affected employees' last working day is anticipated to be Aug. 25.
Why it matters: - SecureWorks' decision comes amidst a trend of other companies in the cybersecurity sector announcing layoffs, including Rapid7 and NCC Group.
- Despite the backdrop of decreasing inflation and historically low unemployment rates, the technology industry continues to face challenges due to increasing interest rates and sluggish growth.
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| 5 | | Vesttoo filed for Chapter 11 bankruptcy protection in the U.S. on Monday. The Israeli fintech startup argued that the move would allow it to pursue legal action against the perpetrators behind the alleged fake collateral scandal. The move comes days after Judge Paul Engelmayer issued a temporary restraining order freezing most of Vesttoo's assets. More: - Aon Plc's subsidiary White Rock Insurance brought about the restraining order after it was worried that the firm could move funds out of the business after news of the scandal emerged.
- Vesttoo provides insurance-linked securities backed by letters of credit which serve as collateral.
- White Rock accused the company of presenting $2B worth of counterfeit letters of credit.
- In response to these allegations, Vesttoo conducted a comprehensive internal and external analysis.
- Consequently, Vesttoo's board put CEO Yaniv Bertele on leave and appointed Ami Barlev as the interim replacement.
- Barlev said that the bankruptcy protection would allow it to put in place a "more sustainable capital structure" and "aggressively pursue all parties that harmed our business."
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| 6 | | Seattle startup Membrion has secured an extra $5.5M in funding, bolstering its Series B round to $12.5M. Investors contributing to the additional funding include Samsung Venture Investment Corporation, Lam Capital, Indico Capital Partners, Harvard Business School New York Alumni Angel Group, New York Angels, and GiantLeap Capital. More: - The Seattle-based startup emerged from the University of Washington, specializing in ceramic membranes for onsite wastewater treatment, focusing on serving Fortune 100 companies in industries like microelectronics, automotive, food and beverage, and oil and gas.
- Membrion has completed multiple pilot projects and is transitioning towards several commercial installations, hoping to deliver significant cost savings for each customer, amounting to hundreds of thousands of dollars annually.
- The company has raised a total of $23M in funding.
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| 7 | | Quick Hits: - The AWS Cookbook — packed with practical insights and hands-on examples — is a must-have for your cloud toolkit.*
- Estonian electric bike startup Verge Motorcycles hired Mark Wilson as the company's CFO. Wilson, formerly the EVP and CFO for Aston Martin Lagonda Plc, is tasked with scaling up the company's business in the international markets.
- Solar energy startup Carlux closed its Series A3 funding led by Temasek at $12M. The funding brings the total raised under the Series A round to $24M.
- Project management software startup Integrate secured $3.4M in fresh funding led by Hyperplane. Additionally, the firm secured a $1.25M contract from the U.S. Space Force.
- British open banking fintech startup Fronted is shutting down operations.
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Term of the Day Common area maintenance (CAM): CAM includes the fees tenants must pay to cover the expenses associated with the maintenance and operation of the common areas. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE STARTUPS LEADERBOARD (7 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.
Robel is a writer for Inside.com. He was born and raised in the Bay Area but now lives in the Midwest. He is passionate about all things tech, venture, city, and state government, and in his free time enjoys outdoor activities including biking, hiking, and running. | | This newsletter was edited by Vibha Chapparike | |
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