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| Hey Insiders, Today's newsletter covers: - Former Argo AI founders' new startup
- Slight uptick in early-stage startup valuations
- Cendana Capital's $470M seed-stage fund
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | The founders of defunct self-driving tech company Argo AI announced they secured $1B from SoftBank to launch an autonomous trucking startup. "They obviously aren't starting from zero, and they have some built-in advantages. But there's still a lot of work to become competitive," Mike Ramsey, VP at Garner, told Freightwaves. More: - The new company, Stack AV, is based in Pittsburgh, the former HQ city of both Argo AI and Uber's Advanced Technologies Group.
- Stack AV currently has 150 employees in 15 states.
- Argo AI shut down in Oct. 2022 as it was unable to find new funding, resulting in Ford, its main investor, deciding to shift further resources to building Level 2 and Level 3 ADAS technology in-house.
- Volkswagen and Lyft also held stakes in Argo AI.
Q: What are the most important insights founders can take away from their initial startup failures to ensure their later businesses succeed? Join the conversation here. |     | |
| 2 | | Seed, Series A, and Series B startup valuations increased slightly in Q2 2023, per data from Carta seen by Kruze Consulting. 
What the numbers say: Valuations of seed, Series A, and Series B startups touched $13.7M, $39.6M, and $100M, respectively, in Q2 2023. Series B startup valuation surged from the low of $81M in Q1 2023. Despite the surge, valuations are still far from the peak figures of around $160M from Q1 2022. Series A valuations stabilized near the $40M mark in Q2 2023, rising quarter-on-quarter since the low of $36.6M in Q4 2022. Seed stage valuations increased from the low of $13M in Q1 to $13.7M in Q2. What happened: Startup valuations started declining from mid-2022 as investors exercised caution due to global economic instability, rising inflation, heightened interest rates, and lack of exit opportunities for VC firms. Seed stage valuations initially showed resilience to the venture funding dip. However, seed-stage startup valuations eventually started declining from Q4 2022. Despite the recent tailwinds, challenges in fundraising are expected to continue throughout 2023, meaning that startups will need to be revenue-oriented and work on achieving milestones. | | | |
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| 3 | | Cendana Capital announced it secured $470M to allocate to seed-stage investors. $340M out of the funds will be sent to U.S.-based investors and $67M for VC firms abroad. More: - Cendana plans to invest $30M directly into startups.
- The median seed round in Cendana's current portfolio is $4M.
- The firm says its first fund had a net return to investors of 4.2x, having distributed back 2.2x of LP capital.
- "There is actually this green space relating to the addressable market versus the actual funds there. So I think you'll actually see more secondary activity and more secondary firms being started, actually, over the next couple of years," said Michael Kim, founder at Cendana.
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| 4 | | Xuan Jiang, the former chief technology officer and director of Run The World (RTW), countersued the event management software startup, its founder Xiaoyin Qu, and its investor Andreessen Horowitz in late August for discrimination. Jiang alleges that she was "coerced" into resigning after medical complications impacted her job availability. More: - Jiang also named EventMobi — the firm that acquired RTW's assets shortly after she left — in the suit.
- RTW had sued Jiang two months after her departure for computer fraud, breach of contract, and breach of fiduciary duty, claiming that she tried to "sabotage" the firm and changed the internal domain, which led to outages.
Zoom out: - RTW had raised $12M from investors, including A16z, Founders Fund, Caffeinated Capital, Dreamers VC, GGV Capital, Green Bay Ventures, and Pear VC.
- The startup had touched a peak valuation of $60M.
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| 5 | | Indian edtech startup Byju's is exploring the sale of its subsidiaries, Epic! Creations Inc. and Great Learning Education Pte., in order to pay off its outstanding debt obligations. The sale is part of its broader repayment proposal to pay off the $1.2B term loan in less than six months. If successful in selling off the divisions, Byju's will not only be able to pay off its loan but also have enough cash to expand the business, sources informed Bloomberg. More: - Byju's had acquired digital reading platform Epic for $500M in 2021.
- In the same year, it acquired professional training and higher education platform Great Learning for $600M in a cash-and-stock deal.
- Byju's expects the sale of the two divisions to net more than a billion dollars.
Zoom out: - The edtech startup has had a tumultuous past few months after it skipped payments on the term loan and failed to submit audited financial statements on time, prompting representatives of Prosus, Sequoia India, and the Chan Zuckerberg Initiative to resign from the board of directors.
- The firm claims that it will finalize the audited statements for fiscal year 2022 by the end of September and for the subsequent year by December.
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| 6 | | Sweden-based Fintech startup Treyd announced it raised a $12M Series A extension led by Nineyards Equity. The company plans to expand its existing markets (U.K. and Nordics) and core products to attain profitability. More: - Treyd works primarily with small and medium retail businesses, enabling them to sell their products before paying suppliers.
- The company has over 600 retailers as clients, having grown 6x in the past 15 months.
- Treyd gives companies 120 days to pay the balance owed to suppliers.
- The startup raised its SEK100M ($9M) Series A led by Nineyards Equity in May 2022, which included participation by Antler, J12 Ventures, and Zenith Venture Capital.
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| 7 | | Quick Hits: - How much should you pay influencers in Q4? Get the benchmarks in this blog.*
- British climate change monitoring satellite startup Open Cosmos secured $50M in Series B funding. ETF Partners, Trill Impact, A&G, Accenture Ventures, Banco Santander InnoEnergy Climate Tech Fund, and Claret Capital Partners provided the funding.
- Temasek-backed medical device startup Advanced MedTech has opted to pursue an IPO listing in Singapore instead of the U.S. The firm expects to raise up to $300M from the transaction.
- Home-buying company EasyKnock acquired home maintenance startup Onder for an undisclosed sum.
- B2B AI startup Vitreus added Brian Evans as the newest member of its board of directors.
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Term of the Day 51% attack: A 51% attack occurs when an entity takes control of more than 50% of a blockchain network's hash rate. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE STARTUPS LEADERBOARD (30 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.
Nicolas is a Sr. Analyst at Inside, covering startups and transportation trends. He is an avid map maker and data nerd. Nicolas has worked in the shared-scooter space, as well as advised e-bike and moped start-ups. | | This newsletter was edited by Vibha Chapparike | |
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