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| Here's your daily Startups briefing: - 📝 Geothermal startup Eavor received a contract from the U.S. Air Force to power its base in Texas
- 📉 Venture-backed startup acquisitions slumped to a three-year low
- ↩️ Throne returned capital to investors after achieving profitability
Thank you. Karan
p/karan-chafekar | |
| 1 | | The United States Air Force awarded a contract to geothermal technology startup Eavor to power the Joint Base San Antonio facility in Texas. Per an earlier report from Recharge, Eavor aims to deliver renewable energy for less than $50 per megawatt-hour by the end of the decade. More: - Eavor demonstrated the technology at a facility in Alberta, Canada.
- The Canadian startup has developed a closed-loop geothermal system, where cold water is poured down a hole in the ground, converted into steam that powers its electricity-generating turbines, and turned back into water for reuse.
- If the pilot project is successful, the Air Force may deploy the technology at other U.S. bases and facilities located internationally.
- Eavor has raised over $364M in funding to date from OMV, BP Ventures, and the Microsoft Climate Innovation Fund, per Crunchbase data.
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| 2 | | The number of global venture-backed startups acquiring other funded startups dipped to a three-year low in 2023, with just 650 such transactions completed in the year, per Crunchbase. 
What the numbers say: The slowed pace of venture-funded startup acquisitions has continued into this year, with just 109 deals closed so far. Crunchbase estimates the disclosed value of M&A transactions involving venture-backed acquirers and acquirees was $5.6B in 2023, about half compared to 2022's tally of $10.6B. Relevance: The median size of venture-backed startup acquisitions slumped from $40M in 2022 to $30M in 2023. There were a few exceptions with outsized transaction values, including Databricks' acquisition of MosiacML for $1.3B. What happened: Large-cap technology companies largely avoided scooping up startups even though several were available for lower valuations. Just 142 of the startups were bought by public companies since the beginning of last year. About 80% of the startups, about 766 companies, were sold to another startup. Large companies avoided startup acquisition due to antitrust regulatory scrutiny and concerns over adding new tax burdens, particularly amidst challenging economic conditions. | | | |
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| 3 | | Creator wishlist startup Throne returned capital to investors in December 2023 after realizing it might not be able to provide a venture-backed outcome in the market it operates within. The company opted to become profitable and canceled plans to raise a Series A round. More: - Co-founder Patrice Becker said, "We know of many companies with a limited market size but healthy revenues that could operate profitably — but they are 'stuck' in the VC cycle. For them, liquidation preferences and investor pressure to deploy the capital they raised (often creating a high-cost basis) put them in a position where they have no choice other than to hope for a unicorn outcome."
- Throne had raised $830,000 through SAFE notes at a valuation cap of $30M in early 2021.
- Ryan Hoover's Weekend Fund, Z Fellows' Cory Levy, and Vibhu Norby participated in the round.
- The company has 400,000 creators on its platform and crossed the $1M mark in gift purchases for a month through its platform.
- Throne is launching Happy Wishlist, a new wishlist-based gifting platform for friends and family.
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| 4 | | Trading platform eToro is weighing options for an IPO listing in either New York or London. The brokerage services startup is targeting a valuation of more than $3.5B. Despite counting the U.K. as its biggest market, the firm is leaning toward a U.S. listing as that would give it access to a broader range of investors, founder and CEO Yoni Assia told the Financial Times. More: - eToro has 3 million customer accounts and about $11.3B of assets under management.
- 70% of the firm's revenues come from Europe.
- The startup's expected valuation is in line with its $3.5B valuation from its $250M funding round from March 2023, led by ION Group and SoftBank's Vision Fund 2.
- However, the target valuation is far from its peak of $10.4B when it agreed to go public via a SPAC merger in 2021, ultimately terminated by the broker in 2022 when market conditions soured.
- In recent weeks, eToro witnessed a surge in retail trading activity in the U.S. and European stock markets.
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| 5 | | Private equity firm Estancia Capital Partners LP acquired a minority stake in British savings product startup Flagstone by investing £108M ($139M). The startup will use the proceeds to expand in the U.K. and internationally. Flagstone will also provide some returns to existing investors, as the current round involves both primary and secondary funding. More: - Flagstone helps customers capitalize on interest rate changes and offers by splitting their savings into different accounts from various providers.
- The startup manages over £11B ($14B) assets for about 600,000 business and retail customers.
- It witnessed a growth of £1B ($1.3B) in assets each quarter in 2023 and has been profitable for the past five quarters.
- To date, Flagstone has raised £149M ($191.5M) from investors, including OMERS Ventures, Kindred Capital, Volution, and Moneysupermarket Group.
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| 6 | | AI-powered fraud detection software provider Inscribe.ai laid off 40% of its employees after missing revenue targets for the last year. Inscribe's board of directors recommended the layoffs, which primarily impacted the go-to-market and operational roles. The layoffs come as the firm pivots to a new product strategy to capitalize on the advances in AI in the financial services industry. More: - Co-founder and CEO Ronan Burke believes, "The advances in AI in 2023 present one of the largest opportunities for the financial services ecosystem."
- Burke highlighted that Inscribe has a new product launch planned for later this year.
- The San Francisco, Calif.-based startup last raised a $23M Series B round in Jan. 2023.
- Threshold Ventures led the round, joined by Crosslink Capital, Foundry, and Uncork Capital.
- At the time of the funding round, the company expected to double its 50-person workforce over the next 12 to 18 months.
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- Banking-as-a-service platform Griffin Bank extended its Series A round with an additional $24M (£19M) funding led by MassMutual Ventures, NordicNinja, and Breega. Existing investors Notion Capital and EQT Ventures participated in the round.
- Index Ventures led a $20M seed funding round into Adaptive, a new startup making it easier for businesses to train large language models. Investors participating in the round include ICONIQ Capital, Motier Ventures, Databricks Ventures, and HuggingFund by Factorial. The startup was valued at $100M.
- Jack Dorsey declared Tuesdays as a "no-meeting day" at his financial technology startup Block.
- AI2 Incubator secured cloud computing credits worth $200M from several cloud providers and data centers. AI2 will allocate the credits for free to portfolio startups incorporating AI models into its software products.
- Jeplan is gearing up to go public on the New York Stock Exchange via a SPAC merger with AP Acquisition Corp. The deal is expected to value Jeplan at about $300M, which would give the merged entity a valuation of $429M, per Bloomberg.
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Aaron Crutchfield | |
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