Weekly update #29

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 reading a very interesting report from Carta , about the number of startups shutting down after raising funds in the last couple of years. In Q1 2024 254 startups shut down, compared to 161 in Q1 2023, an increase of 58%. But before you call this a failure rate, let’s be specific: we do not have enough data to calculate a real failure rate yet, but we use it to understand a potential trend here. And most importantly, to extract some important key points.

First key point: shutdowns increased across the board, but the rise was more significant for companies that had already raised a priced round compared to those that had not yet entered priced equity fundraising. Furthermore, failures rose 102% from Q1 2023 to Q1 2024 for companies in the priced seed stage, making this a particularly challenging period for founders at this stage. Finally, shutdowns increased by 133% for series B companies over the past years, indicating  that it’s not just smaller companies closing down.

In the first quarter of the year, companies on Carta closed 1,064 new funding rounds, marking a 29% decrease compared to the previous quarter. The decline was most pronounced at the early stages of the venture lifecycle, with deal counts falling by 33% at the seed stage and 36% at Series A. Instead of pursuing new primary funding events, many companies opted for bridge rounds. At both the seed and Series A stages, over 40% of all financings in Q1 were bridge round.

Series B wasn't far behind, with 38% of financings being bridge rounds. Despite the drop in the number of rounds, VCs were still willing to invest significant amounts in certain deals. Total cash invested slightly increased in Q1, reaching $16.3 billion. However, many startups had to compromise on their valuations: 23% of all new rounds in Q1 were down rounds, the highest rate in over five years.

To me, this is a clear signal that we are still in a very troubled market, where everyone is looking for less risk and more liquidity. And obviously only startups that had a sustainable and solid business model were able to survive this wave, as we can see in the data.

Anyway we saw some very interesting news in the market this week. OpenAI released a new version of his famous tool, Chat-GPT, called GPT-4o. Microsoft , along with other famous tech companies, committed to invest $4 billion in the French startup ecosystem, willing to sustain over 27000 startups in the upcoming years, while Visa is releasing a bunch of new feature willing to transform your debit card into a credit card. In all of this, we also saw some nostalgic behavior on the market, with GameStop stocks surging 74% after a tweet from roaring kitty, the famous trader who caused the short squeeze a couple of years ago. In the VC world, SoftBank Group Corp. liquidated some positions on his famous Vision fund to focus on AI and chips, while Accel raised $650 million to invest in early stage European startups. But they weren’t the only ones, as other VCs raised funds this week, with Pitchdrive | Early-stage VC 🚀 , blisce and PeakBridge ge announcing new funds. In the italian ecosystem, Milan based CheckSig raised a $2.7 million funding round. Finally, some round from very interesting fintech startups like Lune® , Aeropay , Agora RE , Plenty , MNZL , Aplazo, Alpine, Anapaya , Sikich and many others.

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

Closed deals

• Wealthtech platform Plenty just raised a $5 million seed round to transform financial management for couples
• Linnovate Partners secures $40 million to boost alternative investments services
• Egyptian based MNZL secures a $3.5 million seed round
• Archive Intel raises a $1 million pre-seed to enhance wealth firm communication solutions
• CoverTree raises a $13 million series A to innovate home insurance solutions
• Aplazo secures $70 million to boost BNPL in Mexico
• Swiss based Alpine secured a CHF76 million series C funding round to boost his digital banking solution
• Anapaya secures CHF10 million to drive international expansion and consolidate Swiss market
• Sikich secures $250 million from Bain Capital to fuel expansion and growth
• Saudi fintech Rasan is looking for $224 million in a first IPO in Ryad
• Canopy raises $35 million for his operating system for accountants
• Outpave raises $1.2 million in seed funding for his spend management solution
• Incredible raises $1 million to innovate credit repayment
• Mexico based Worky.mx raises $6 million to revolutionise payroll solution in Latina America
• Niro expansion in India fueled by a $3.4 million round from Marui group
• Annapurna Finance Pvt. Ltd. raises $75 million from Piramal Alternatives to innovate microfinance
• Grasp secures $1.9 million to accelerate AI driven financial solutions
• Aeropay secures a $20 million series B to offer an alternative to Visa and Mastercard
• Agora raises $34 million to reshape financing for real estate and homeowner
• Embedded accounting startup Layer Financial raises $2.3 million to innovate accounting
• Cover Genius secures a $80 million series E to reshape embedded insurance
• FinLocker raises a $17 million series B to revolutionise the homeownership journey
• Dubai based Lune® raises $1.5 million to enhance financial app with data enrichment

Insights on the VC industry

• In 2023, approximately 37% of all investments in VCs was done by governments all around the world
• The US based VC Accel raises $650 million to invest in early stage European startup
• Pitchdrive | Early-stage VC 🚀 raises $40 million third fund to fuel early stage European startup
• SoftBank Investment Advisers sells assets from his world famous Vision Fund as it shifts focus on AI and Chips
• blisce launches a $160 million fund to support climate tech founders
• Accion is launching a $125 million fund to transform the way SMEs use financial services globally
• Norrsken VC closes a $320 million fund to empower entrepreneurs globally
• PeakBridge launches a $187 million fund to revolutionise the future of food

News on the market

• OpenAI just released his latest version of ChatGPT, GPT-4o
• Feeling nostalgic yet? GameStop stocks surged 74% on Monday after Roaring Kitty twitted a meme on X
• Microsoft, along with other tech companies, is willing to invest $4 billion in the French startup ecosystem
• Sequoia Capital backed ShopUp expands growth as his revenues reach $129 million
• KKR acquires Perpetual Group corporate and wealth unit for $1.4 billion
• Klarna takes a major step toward a $20 billion IPO
• Visa wants to turn your debit card into a credit card

A special look in the Italian market

• Milan based CheckSig raises a $2.7 million series A for his crypto trading and custody solution.

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 #28