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| Here’s a look at today’s Startups briefing. - 🇨🇳 Graphcore stops operations in China citing U.S. export controls.
- 🚀 Fresh Factory, Kiwify are the fastest-growing startups that emerged from accelerators.
- 💳 Real-time payments platform Volt expands into Australia.
Thank you. Karan
p/karan-chafekar | |
| 1 | | British AI chip unicorn startup Graphcore is pulling out from China, citing the recent U.S. export controls that restrict the sale of technology into the nation. The firm will lay off most of its staff and discontinue sales in China. In October, Graphcore's CEO Nigel Toon confirmed that sales from China accounted for "maybe 20 to 25%" of the company's business. More: - Graphcore, once valued at $2.8B in 2020, has struggled to gain commercial traction and failed to materialize on its promise of being a viable alternative to Nvidia.
- The firm reported a $204.6M loss in 2022 after revenue dropped by 46%.
- Notable investor Sequoia Capital marked down the value of its stake in Graphcore to zero, highlighting the company's struggles.
- Last month, the firm said it would require additional capital to keep operating.
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| 2 | | Cold chain fulfillment center startup Fresh Factory and online course development platform Kiwify have both increased their workforce by over 300% in the 12 months preceding Jun. 2023, per CB Insights. 
What the numbers say: The high employee growth rate of 405% gives Fresh Factory the honor of being the startup with the fastest-growing employee count that emerged from accelerator programs. Kiwify was in second place in the standings, registering a workforce growth rate of 326%. Both startups have completed Y Combinator's winter accelerator programs. The top 25 startups on the list each reported a workforce growth rate of more than 150% in the same period. Relevance: Additionally, CB Insights accessed the management quality of the founding and management teams, including their past achievements, industry experiences, and educational background. The firm concluded that waste management platform Dimension–backed by 500 Global's accelerator–was the startup with the strongest management team, getting a Management Mosaic score of 970. | | | |
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| 3 | | British real-time payments platform Volt is expanding its global footprint by setting up operations in Australia. The firm already has a presence across the U.K. and Europe. In 2021, it expanded into the South American market through Brazil. More: - Volt has partnered with the Australian digital payment platform PayTo.
- The firm's technology has also been integrated with the ticketing platform Megatix.
- Volt's expansion to Australia comes just months after it raised a $60M Series B round led by IVP.
- The firm had raised the funding to expand internationally in APAC and the Americas.
Zoom out: - Australia is still a relatively new market for real-time payments, and there is a growing demand for innovative payment solutions.
- A new report from Cognizant showed that Australia is the second leading market in the adoption of new payment technology, behind China.
- Per Juniper, the value of open banking transactions globally is projected to reach $330B by 2027.
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| 4 | | British medical equipment manufacturing company Smith & Nephew (S&N) acquired Israeli medical device company CartiHeal for up to $330M. $180M of the sum will be paid upfront, with the remaining $150M tied to financial milestones. More: - One of the financial milestones includes CartiHeal reaching $100M in annual recurring revenue over a consecutive 12-month period.
- All of CartiHeal's employees will join S&N, with CEO and founder Nir Altschuler set to serve as a consultant for six months after the deal is closed.
- CartiHeal has raised $74M in total funding to date from aMoon, Elron, Peregrine Ventures, Access Medical Ventures, Pertec, Accelmed, and JJDC.
- Elron is set to receive $47M after the completion of the transaction and an additional $40M upon reaching certain sales milestones.
Zoom out: - S&N's acquisition of CartiHeal comes just months after Bioventus backed out of a $450M acquisition of the firm.
- Bioventus was planning to raise $415M in debt funding to pay the transaction amount, which included a $315M upfront payment.
- It later revised the payment structure to just $100M upfront and another $215M in regular installments before backing out of the deal entirely earlier this April.
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| 5 | | Former Goldman Sachs bankers George van Dorp and Koen van Vlijmen launched a new platform called Fundflow. The platform aims to match lenders with overlooked smaller firms to increase access to private capital. More: - "A lot of these businesses struggle accessing the capital markets because they lack relationships. That frustrated me because I don't think raising money should be based on relationships — it should be based on merit," said van Dorp.
- The platform aims to broker private equity deals starting as low as €1M ($1.1M).
- Fundflow will charge less than a 1% transaction fee, which is less than the 5% fees typically levied by other platforms.
- Lenders registered on the platform include VC and venture debt fund Hambro Perks, middle market lender SME Capital, and VC firm Flow Capital.
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| 6 | | GPS tracking, telematics, and fleet management solutions startup Linxup availed a $50M debt facility from Runway Growth Capital. The firm will use the new credit facility to refinance existing debt and for working capital purposes. More: - Linxup, formerly known as Agilis Systems, provides vehicle and asset-tracking solutions to several industries.
- Linxup's CEO, Drew Reynolds, said the company opted for non-dilutive financing to execute its ambitious plan and accelerate growth.
- Runway's managing director, Brian Sapp, said, "We are excited to invest in Linxup as we believe the company is uniquely positioned as a leading provider of IoT solutions that are tailored to SMB-focused fleets."
Zoom out: - Runway Growth Capital provides senior-term loans ranging from $10M to $100M to startups across the U.S. and Canada.
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- Middle Eastern e-commerce startup Floward is gearing up for a public debut and recently hired Goldman Sachs and HSBC Holdings to assist with the IPO listing in Saudi Arabia.
- Adobe Systems acquired Indian startup Rephrase.ai for an undisclosed sum.
- Flagship Pioneering led a $50M funding into Quotient Therapeutics, a biotech startup that just emerged from stealth to develop drugs using sensitive genetic sequencing.
- Italian vertical farming startup Planet Farms bagged $40M in fresh funding at a $500M valuation. The firm will use the capital to complete the construction of a new factory located just outside Milan.
- Experience exciting new stories of innovation from prominent brands like LEGO, Ben and Jerry's, Delta, and VMware on Season 2 of Adobe's The Power of Teamwork podcast.*
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| Upcoming Events | | NOV
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Term of the Day Request for Proposal: A request for proposal (RFP) is a project announcement by an organization indicating that bids for contractors to complete the project are sought. Question of the Week What perks would convince you to return to the office? Join the conversation |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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