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| Here’s a look at today’s Startups briefing. - 🦄 Unicorn creation rate in Europe dropped in 2023.
- 🧪 Biotech startups rake in a larger share of VC funding.
- 👥 Palmetto conducted multiple layoffs this year.
Thank you. Karan
p/karan-chafekar | |
| 1 | | 10 European startups reached the coveted €1B ($1.1B) valuation mark and cemented their unicorn status in 2023, per Pitchbook. The unicorn creation rate has slowed significantly compared to the 46 minted last year. The slowdown can be attributed to the lack of mega-funding rounds and continued valuation corrections across all stages. More: - Investors expect the unicorn creation rate to increase in 2024.
- Pitchbook highlighted five European startups closing in on the €1B valuation and could probably enter the unicorn club as early as next year.
- Code writing chatbot tool Poolside AI, which raised a $126M seed round in August, is the first candidate that could achieve the €1B valuation next year.
- Other startups on the verge of becoming unicorns are quantum computing firm Pasqal, sustainable rocket maker Isar Aerospace, medical logistics smart container SkyCell, and DNA synthesis startup DNA Script.
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| 2 | | VC funding share for biotech startups increased in the first nine months of this year, per Carta. 
What the numbers say: Biotech startups increased their VC funding share from 11.9% in 2022 to 16.9% in 2023. Besides biotech, even hardware and energy sectors were able to increase their funding share. Meanwhile, the funding share for SaaS and fintech startups declined this year, accounting for 28.4% and 6.2% of the total funding, respectively. Relevance: Biotech startups also asserted their dominance in the seed stages, raking in 13.6% of the total seed capital. This heightened funding in biotech is due to the sector's rising prominence, which can be attributed to the recent advancements in vaccines and the growing demand for weight-loss medications like Ozempic and Wegovy. As a result, median pre-money valuations of seed-stage biotech startups surged to $20.3M in Q3 2023, representing a 190% increase in less than four years. Seed-stage SaaS startups proved to be resilient in the face of the economic downturn, bagging a 39.2% share of the total seed funding deployed. | | | |
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| 3 | | Cleantech unicorn startup Palmetto conducted at least two rounds of layoffs this year, with the latest one occurring just last week, sources informed Business Journals. The actual number of employees laid off is currently unknown. However, the layoffs did not impact employees working in the new headquarters in Charlotte, N.C. More: - A company spokesperson said, "Palmetto unfortunately implemented layoffs in response to the national market slowdown in one of our divisions, which is the residential solar and energy storage installations."
- At the end of September, the firm had about 400 employees.
- The same month, the firm relocated its headquarters from Charleston, S.C. to Charlotte, N.C.
- Palmetto entered the unicorn club in 2021.
- To date, the firm has raised $555M, including a $375M Series C round from Feb. 2022 led by Social Capital.
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| 4 | | Energy industry software developer Kraken Technologies acquired Sennen for an undisclosed amount. The acquisition of Sennen, which makes advanced software for operating large-scale renewable energy generation machinery, will expand Kraken's energy generation and storage assets sixfold. More: - After the acquisition, Kraken will manage 36 GW of energy generation and storage assets, up from 6.5 GW earlier.
- This will be the first time Kraken will manage offshore wind farms.
- Kraken, a part of the Octopus Energy Group, will also leverage Sennen's technology to develop more innovative products and services.
- Per Crunchbase, Sennen had raised £780,000 ($985,383) in total equity funding before the acquisition from Caygan Capital, Vala Capital, FuturePlay, and Sustainable Ventures.
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| 5 | | Fintech startup Vestwell raised $125M in fresh funding led by Lightspeed Venture Partners. The New York-based firm was valued at $1B at the latest round, sources informed Bloomberg. Vestwell will use the proceeds to expand its sales and engineering teams and develop new products. More: - Existing investors Fin Capital, Primary Venture Partners, and FinTech Collective participated in the round, joined by new investors Blue Owl and HarbourVest.
- Lightspeed's partner Justin Overdorff will join Vestwell's board as part of the Series D round.
- Vestwell is looking to develop additional emergency and health savings account products.
- Founder and CEO Aaron Schumm expects the company to be profitable over the next 18 months.
- Schumm also hinted at the possibility of an IPO listing soon.
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| 6 | | Carbon capture startup Entropy secured a $200M investment from the Canadian government through the Canada Growth Fund (CGF). Entropy also received a carbon credit purchase agreement for up to one million tons per year. More: - CGF will purchase nine million tons of carbon credits from Entropy over 15 years, with the option to purchase an additional 400,000 tons per year for other projects.
- Entropy was founded by natural gas company Advantage Energy and professional services provider Allardyce Bower Consulting.
- The startup captures pre-combustion and post-combustion emissions from industrial sources.
- Last year, the firm received a $300M investment from the Brookfield Global Transition Fund.
Zoom out: - CGF expects to mobilize up to $15B in capital to further develop the clean economy in Canada.
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- Biopharmaceutical startup Sudo Biosciences closed its Series B round at $116M. Enavate Sciences and TPG co-led the round, joined by Sanofi Ventures, Surveyor Capital, Monograph Capital, and Eventide Asset Management.
- Startup EtaVolt and researchers from the Nanyang Technological University Singapore have jointly developed a high-intensity illumination device using advanced regeneration technology that can reportedly excite and rearrange polysilicon molecules in solar panels to reduce their degradation.
- Israel's largest VC investor, OurCrowd, has earmarked $50M towards an Israel Resilience Fund to invest in startups impacted by the nation's war with the Palestinian militant group Hamas.
- Nectin Therapeutics, an Israeli biotech startup developing treatments for cancer, is expanding its clinical trials to the U.S.
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*This is sponsored content. | | | |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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