Tamara enters unicorn club / Median round sizes increased in Q3 / Flyhomes conducts another round of layoffs

Plus, Improbable sells gaming unit to Keywords for $97M

Inside Startups For December 18, 2023

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Here’s a look at today’s Startups briefing. 🦄 Tamara cemented its unicorn status with a $340M equity round.  📈 Median round sizes increased across most stages in Q3, except the seed stage. 👥 Flyhomes conducted another round of layoffs.  Thank you. Karan p/karan-chafekar

1 Saudi Arabian fintech startup entered the unicorn club with a $304M equity round that pushed the firm's valuation over the $1B mark. Saudi sovereign wealth fund Sanabil and the kingdom's largest bank's unit, SNB Capital, provided the funding.  More: The latest equity funding comes just a month after Tamara availed an undisclosed debt facility from Goldman Sachs.  Tamara had previously secured a $150M debt facility from Goldman earlier this March.  Tamara has about 10 million users and 30,000 merchants across the United Arab Emirates, Saudi Arabia, and Kuwait.  The buy-now-pay-later solutions startup could probably hold an IPO a few years later, said CEO and co-founder Abdulmajeed Alsukhan.  Zoom out: In the first nine months of this year, VC funding for startups in the Middle East and North Africa dropped 44% compared to the same time last year, per Magnitt.

2 Median venture funding deal sizes increased at nearly every stage in Q3, except for the seed stage, per Carta.  What the numbers say: Series A median deal sizes increased by 25% QoQ to $9.6M. Median Series B and Series C rounds increased by 8% QoQ. Series B rounds increased from $12M to $15M, while Series C rounds grew from $23M to $25M. On the other hand, median seed rounds remained flat at $3M in Q3, the same as the previous quarter. While deal sizes are still far from the peaks of 2021 and 2022, rounds are still higher than in 2018 and 2019.  Relevance: Signal Peak Ventures and Oquirrh Ventures co-founder and general partner Ron believes that the venture funding landscape is set for a "seismic change." Heinz added, "Now, I think there's a lot more focus on profitability or path to profitability, a lot more focus on rigor and discipline."

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3 Real estate startup Flyhomes laid off an undisclosed number of employees, the company announced in a post on LinkedIn. "This decision comes in the face of persistent and worsening industry headwinds which have prompted us to restructure our business to best meet the needs of our customers in a rapidly evolving real estate market," the firm said in the statement. Flyhomes' VP of growth marketing, Kyle Munson, was let go a few weeks ago.  More: This is the firm's fourth round of layoffs in the past two years.  The firm held the first round of layoffs in June 2022, then in July and November.   Flyhomes fired 20% of its workforce in July 2022.  Flyhomes has raised $200M in total funding since its founding in 2016, of which $150M came in through a Series C round in June 2021.  Zoom out: The high mortgage interest rates and broader economic volatility have severely affected real estate startups, forcing many, including peers Redfin, Opendoor, and Compass, to announce cutbacks and layoffs.

4 British publicly-listed video game developer Keywords Studios acquired The Multiplayer Group (MPG) from metaverse startup Improbable for £76.5M ($97.1M). Keywords financed the acquisition through cash and its existing revolving credit facility. The acquisition will help Keywords strengthen its Create division.  More: Multiplayer game development studio MPG was founded in 2018 and has worked on popular gaming titles such as Fallout 76 and Medal of Honor: Above and Beyond.  Improbable acquired MPG in 2019 for £30M ($38M) as a part of its venture builder strategy, through which it invests and acquires businesses with the option of expanding or spinning them off later.  Improbable has raised $600M to date from investors, the last of which came in the form of a $150M round led by Andreessen Horowitz and SoftBank's Vision Fund 2 last year.  Zoom out: Keywords has 70 game development studios across the U.S., France, Brazil, Mexico, and Spain and has allocated $100M to new acquisitions.  Keywords' share prices dipped 49% YoY after it reported earnings per share of 18.48 euro cents in the first half of 2023, down 40% YoY.

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5 Norwegian private equity firm Verdane is acquiring an 11% stake in media monitoring startup Meltwater for $65M. The transaction gives the startup a valuation of $592M (€542M).  More: Verdane indirectly acquired the stake after taking a substantial stake in Fountain Venture, the investment vehicle founded and controlled by Meltwater's chairman, Jørn Lyseggen.  Verdane opted for the indirect investment path as that would provide it more opportunities to invest in startups in the future alongside Fountain Venture.  The deal also gives Verdane an equity stake in HR startup Jobylon.  PE firms Altor, Marlin, and Fountain took Meltwater private earlier this year.  The firm debuted on the public market at a $1B valuation in Dec. 2020.  Its current valuation is less than the over $700M equity funding it raised as a privately-held startup.  The firm has an annual recurring revenue of €500M ($546M).

6 The European Innovation Council (EIC) Work Programme 2024 will invest €50M ($54.65M) to help startups and small businesses scale up the production of alternative proteins. The program will support startups working on precision fermentation, animal-free foods, and foods that can be produced using existing sidestreams.  More:  The program is part of the broader Horizon Europe initiative to "improve the sustainability, efficiency, and resilience of the European food supply chain." Funding will be allocated to startups through EIC's Accelerator Challenge.  The program will open applications in May next year.  In addition to working on precision farming, the startups will need to have scalable technology and ensure a closed-circle production process to prevent the release of contaminants into waste streams.  Zoom out:  Last year, the precision fermentation sector bagged $842M in funding, per the Good Food Institute.  So far this year, the sector bagged a $273M investment, nearly double the amount raised by plant-based proteins and triple that of cultivated proteins.

7 Quick Hits: Smart investors are generating passive income by selling their shareholder voting rights. Register on Shareholder Vote Exchange to start earning.* 3D laser engraver maker startup Glowforge laid off 30 employees. The firm is offering the affected employees "outplacement support, severance, visa assistance, and 12 months of paid medical coverage to support them." Croatian cloud communication firm Infobip has supported 327 startups across 64 countries through its Startup Tribe Programme since its launch in May 2021. The firm has provided startups with products and services worth more than €1.8B.  Four-dimensional cardiac imaging and navigation platform maker LUMA Vision raised $22M in Series A3 funding. Existing investors EQT Lifesciences, ABV Uni Fund, and imec.xpand led the round.  Waste management payments software platform CurbWaste secured $10M in Series A funding led by Flourish Ventures, with additional support from TTV Capital, Mucker Capital, and B Capital.  100k companies automate scheduling with Calendly. Teams are seeing 2x conversion rates, 30% increased customer retention, and 323% ROI. Sign up free.* *This is sponsored content.

Karan Chafekar Analyst Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.  This newsletter was edited by Vibha Chapparike

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Europe’s Biggest Telecom Buys Polkadot

PLUS: BitMEX's airdrop, Ethereum's latest testnet and more |

The biggest crypto news and ideas of the day  Dec. 21, 2021 If you were forwarded this newsletter and would like to receive it, sign up here. Sponsored by     Welcome to The Node.   Questions? Feedback? We'd love to hear from you! Simply reply to this email.   –Daniel Kuhn Today's must-reads Top Shelf BEARISH TURN? Between hawkish U.S. Federal Reserve positioning and a general de-risking across markets recently, CoinShares reported $142 million in crypto outflows across the industry last week. This is the largest weekly downturn on record, the digital-asset manager said, more than the previous record of $97 million last June. This bearish turn follows a 17-week run of inflows, and more than $9.5 billion in fresh capital pumped into crypto this year. Further, strangely, NFT web searches are up (even if the non-fungible market is down).   STABILITY WANTED: Fitch Ratings said that regulatory clarity could moderate stablecoin credit risks. In a new report the prominent credit rating agency said the fiat-pegged digital assets could create new market opportunities, and that uncertainty has deterred financial institutions from using them. Fitch notes that the European Union is the first major economy to publish draft regulations for the sector and has called for issuers to be regulated like banks or electronic money institutions.   BIT DERIVATIVE? BitMEX, the storied, bitcoin-only derivatives giant, will airdrop a new exchange token to account holders in early 2022. The BMEX token is similar in design and purpose (to reward users and pay for exchange services) to Binance's BNB and FTX's FTT token, two global crypto exchanges that have eaten into BitMEX's market share. One-fifth of all BMEX, out of a capped supply of 450 million tokens, will be reserved for BitMEX employees.   TANZE DIE POLKA: Europe's biggest telecommunications company, Deutsche Telekom AG, is throwing its weight behind the interoperable blockchain platform Polkadot. Deutsche Telekom's digital innovation subsidiary has purchased a significant  trove of Polkadot's native cryptocurrency, DOT, to participate in its proof-of-stake (PoS) consensus mechanism and will also provide node-running infrastructure for other stakers. The telecoms company has existing stakes in oracle network Chainlink, NFT-geared blockchain Flow and mobile-first payment network Celo – all of which are PoS.   TESTING GROUND: Ethereum opened the Kintsugi testnet to the public on Monday, Tim Beiko, a developer for the blockchain, announced in a post. Named for the Japanese art of mending broken pottery with gold, Kintsugi is one of the final public testnets before Ethereum 2.0, the long-awaited, ambitious upgrade to make the most used blockchain cheaper, faster and more scalable. Earlier testnets were available only to developers, but this "longer-lived public testnet" will allow developers and the community to test applications and features in a controlled setting. A message from Nexo When it comes to buying, borrowing or earning on your crypto, you won't find and easier, safer way to do it than Nexo. Right now you can earn $25 worth of Bitcoin for each friend you refer. And the best part is that your referral gets $25 in BTC too! How it works? It's quite simple – sign in to your Nexo account, copy your unique link and start referring like your life depended on it!   And here's what'll happen next: you and your referrals will both get $25 in BTC within 30 days of them passing Advanced Verification and topping up the equivalent of $100 or more of any asset supported on the Nexo platform.   There's no limit on the number of people you can refer, so invite as many friends as you'd like! Join Nexo and start earning free BTC with your friends! What others are writing... Off-Chain Signals Brian Eno on NFTs & Automaticism (Crypto Syllabus) Secret bitcoin miners in China could still make up 20% of global hashrate (Protos) US Goes to Court to Recover $154M Stolen From Sony, Converted to Bitcoin (Decrypt) Twitch co-founder's Fractal NFT project gets hijacked — $154,000 stolen (The Block) Crypto mayors on the rise (Tech Crunch) A message from NowRX This company's share price increased 1,650% from 2016 – Own a piece today!   NowRx is disrupting the $480B retail pharmacy industry using proprietary software and robotics to provide a more personalized, hassle-free pharmacy experience.   In 2020, the company saw revenue grow 90% YoY and this year they're on pace to top $22M. Oh and did we mention their telehealth service grew over 3,000% since January?   Don't miss your chance to own shares of this high-growth startup!   Invest in NowRx Sponsored Content   FBG Capital: Why Investors Are Excited About the DeFi-zation of GameFi   Splitting the ownership and utility of gaming assets opens huge investment opportunities for GameFi, potentially making game finance bigger than decentralized finance (DeFi). The GameFi sector is young but booming, and this is very exciting for investors. The financial components of GameFi include on-chain leasing solutions, fractionalization, staking, game non-fungible tokens (NFT) dedicated marketplaces, layer 2 solutions for blockchain games and others.   GameFi and DeFi have many similarities but there are also some crucial differences. The Chaser... The Node A newsletter from CoinDesk Were you forwarded this newsletter? Sign up here. 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