Weekly update #27

Welcome to this edition of the weekly newsletter. The idea behind this activity is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market.

This week I’ve been across a couple of very interesting pieces of content, both related in some way to the startup ecosystem, and more specifically to valuations. The first one, is a report shared by Docsend, one of the main tool used by founders and investors to share pitches.

Given that this is one of the main tools used to share pitch decks among investors and founders, they thought it could also be interesting to understand the main KPI behind this very critical activity in the startup ecosystem. As you can see, there were some very interesting changes from 2022 to 2023: average read time went from 2.25 to 1.56 minutes, a reduction of 30% approximately. The average meetings set also reduced from 56 to 38, as well as the number of slides, 18 to 15, and the number of startups actually completing a fundraise, from 20% to 10%. Among this wave of reduction, was there actually something raising up? Sure, the average fundraising time, from 13 to 16 weeks.

I think that this report shows exactly the kind of shift we saw on the market from 2022 to 2023, with less and less investors willing to invest, and a very hard environment for founders looking for capital.

The second resource I’ve read is actually a study by Adventis Advisors on “SaaS Valuation Multiples 2015-2024”, released in Q1 2024. The study takes in consideration different SaaS companies been acquired, sold, merged or went public, and relative valuation multiples at the time.

I think that everyone involved in the VC and startups ecosystem remembers the period between 2019 and end of 2021, where valuations went totally crazy, with SaaS companies acquired for 30x and even 50x the revenues. In this graph we can see the quantitative proof behind that time, with a 1st and 3rd quartile of the EV/Revenue multiple touching 35x on the highest peak.

Then, after a time of total craziness, we saw a return to wisdom, and to basic economic. Here you can see the median quarterly margin in percentage, both for net income and EBITDA. And it is clear in my opinion, when the market started to ask for sustainability instead of growth, from the rock bottom of Q4 2021 to actual days.

Finally, a screenshot of how different markets are evaluating companies based on different multiples. Very interesting, but also not surprising, is how the United States stands above all in terms of median size of deals when coming to acquisition, while they are surpassed by Canada when coming to median EV/Ebitda. But I strongly believe that this last metric is highly impacted by the geographic proximity of the two countries.

Concluding the report, we can see how the actual average multiplier for SaaS nowadays is a far more sustainable 7.2x EV/Ebitda, coming closer to the reality of basic economic and interest rates at the present moment in time. But we should always remember that mr. market is always right, and there some specific reasons behind the crazy valuations of 2020 and 2021.

For everyone interested in this topic, you can find here the full report.

Anyway we saw some very interesting news in the market this week. Monzo Bank expanded his last fundraising to $500 million thanks to some of the top tech investors in the market, while Getir is exiting both US and Europe markets. xAI is closing a first $6 billion funding round, while Goldman Sachs is trying to transfer his General Motors partnership to Barclays . In the meanwhile, federal persecutors in the US have been very busy this week, investigating Cash App and Square for some suspicious transactions, while convicting Binance CEO Zhao to 4 months in prison. In the VC world, we saw Isomer Capital raising a $100 million fund, TLcom Capital LLP raising $154 to invest in African startups, and Norrsken VC raising $205 million to invest in the african fintech ecosystem, while Novo Holdings wants to create a quantum hub in Denmark, backed by a $188 million fund. Quite a couple of good news from the italian market, with Qromo and Glaut raising funds. Finally, some very interesting funding round from fintech startups like Altruist , Lunar , Ageras , BRISKPE , Ansa , Pleo and Tuza.

But let's take a closer look at the main news of the last seven days:

Closed deals

• Monzo Bank expands his latest fundraising reaching $500 million in a deal with top tech investors;
• OpenAI startup fund quietly raised $15 million to invest in early stage startup;
• BillEase raised $5 million to boost his BNPL consumer solution;
• xAI is closing a $6 billion fundraising, with X between the main shareholders;
• Danish based fintech Ageras raises $82 million to back his acquisition strategy;
• Capify UK secures a $100 million credit facility from Pollen Street Capital ;
• Treefera raises a $12 million series A for his fintech forestry data platform;
• Backed Finance AG raises $9.5 million to accelerate his private tokenisation offering;
• X10 raises $6.5 million for his revolutionary crypto exchange;
• Backflip raises $15 million to innovate House flipping in Real estate;
• BRISKPE raised $5 million from PayU to innovate India's cross-borders capabilities;
• Goldman Sachs is leading a $1.5 billion loan to SumUp;
• Nordic challenger bank Lunar raises $24.1 million;
• Wallet as a service startup Ansa raises a $14 million series A;
• Canza Finance raises $2.3 million for his web3 neo bank;
• Baselayer emerges from stealth and announces a $6.5 million funding round;
• Wealth management platform Altruist raises $169 million at the valuation of $1.5 billion;
• Pleo secured a $40 million credit line from HSBC;
• Payments comparison startup Tuza (formerly Statement) just raised $4 million to support SMEs;
• Fintech startup Dexif raises a $4 million round led by RTP Global.

Insights on the VC industry

• Isomer Capital launches a $100 million secondary funds;
• TLcom Capital LLP raises $154 million to fund seed African startups;
• Novo Holdings, parent company of Novo Nordisk, is investing $188 million to create a quantum startup ecosystem in Denmark;
• Norrsken22 wants to invest $205 million in Africa's growing fintech sector.

News on the market

• Spendesk acquires Okko in the spend management industry;
• Grocery delivery startup Getir quits Europe and US markets;
• Australian based fintech BidFin has been acquired by humm group;
• Goldman Sachs is in talks with Barclays Investment Bank to transfer the GM credit card partnership;
• Nubank just introduced a credit portability feature in Brasil;
• Binance founder Changpeng Zhao has been sentenced to 4 months in prison;
• Federal prosecutors are investigating two of the main payments app in the US, Cash App and Square, owned by Block;
• Monese and XYB announce the separation on two different entities and the closing of a new funding round;
• Bancolombia is venturing into crypto launching his new platform, Wenia;

A special look in the Italian market

• Milan based Qromo raised $1 million to boost payments in food retail and hospitality market;
• Italian startup Glaut raises $1.4 million for his conversational survey platform.

Startups raising funds

• Fantalegends - a Fantasy Football free-to-play mobile game that aims to provide an enjoyable and safe experience, user-centered, with more than 2k daily active users. Raising $1M.
• PopulaRise - The platform that allows companies of every dimension to promote themselves on social media through the collaboration with their clients. B2B2C SaaS. Raising $1M.
• Bitcoin People - Fintech company focused on crypto payments between corporate and cross countries. B2B, SaaS. Raising $500k. Round closed!
• Tutornow - Edtech that provides an online tutoring platform for students with learning disorders. Raising $500k to $1M.
• Recivu - Fintech  startup trying to digitize the receipt flow by getting rid of papers. Looking for $150k in SAFE, already $50k committed.
• Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.
• Reach Finance - Reach is the fintech platform for wealth accumulation for the Y&Z generations, they provide users with the tools to build wealth such as a budget tracker, a financial plan and a systematization of investments. Looking for $700k, with already $500k committed;
• wrapp.ai - A fintech startups that offers a virtual accountant and CFO that can help SMEs scale globally. Looking for $1 million, $750k already granted from public funds, looking to close the last $350k.

If you are a startup and want to be present in this list, please contact me directly.

If you are an angel investor or a VC interested in those companies, contact me for an intro!

Take also a look at the last edition of the newsletter, Weekly update #26