Weekly update #45

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

Before jumping to the main topics for this week, I am exploring partnerships with the newsletter. So this edition is sponsored by Notion, which is offering a 6-months free plan of its plus product to all founders submitting an application for their startups program.

In order to redeem the free trial, submit an application using this linkhttps://ntn.so/michelemattei, select Michele Mattei as partner and include the following partner key: STARTUP4110P62416. I really hope it will be helpful for many founders out there!

Coming back to us, I’ve been reading a very interesting analysis this week, made by Michael Ho and based on Carta 's data, on the valuation multiple in startups round in Q2 2024. Here my main takeaways.

The idea behind the analysis is to take data from the round in Q2 from Carta about median valuation, time between rounds and the concept of venture scale to see how valuation multiples change round by round. The first metric I found very interesting was the median pre-money of priced seed rounds, that after many quarters of decline finally reached a new high at $15 million for primary rounds, potentially indicating a possible uptrend in the market.

The topic about primary and bridge rounds is surely a very interesting one, and the second metric that I found very interesting was the amount of bridge rounds in Q2. As you may know, in the last year and a half we saw many bridge rounds in the industry, as many startups tried to stay alive bringing in more money when possible to get a longer runway. But what we see here is that on all stages we saw a decline in terms of numbers, frequency and percentage of bridge rounds. Again a positive indication of recovery.

Also very interesting, how much ARR do startups usually have when raising money? Out of all Carta’s data, 29% of startups raising at least a $4 million seed round had between $150k and $500k, while 28% had between $500k and $1M. At the same time, 17% of them were pre-revenue.

The final outcome of this very interesting analysis is this table. Taking in consideration the venture scale curve, you can see here the median ARR and median valuation at each stage, seed to series E. What I find more interesting is the seed valuation multiples, a very wide 15-60x, that I find maybe slightly too high on the upper hand. While I am more in line with series B and series C, where I find those multiples very realistic.

A couple of notes here on those data. There was a significant increase in Median Series D and E+ valuations in Q2 2024, influenced by a relatively low number of deals, especially when compared to Seed (492 deals), Series A (415 deals), and Series B (185 deals). This lower deal volume for Series D and E+ rounds has skewed the valuation multiples much higher for these stages this quarter. In terms of timing, consider a Series C raised in Q2 2024, it indicates that 27 months prior (using Q1 2024 data), the company raised a Series B. However, this suggests that Series A was raised only 20 months before that (based on Q1 2022 data) and the Seed round was raised 19 months before Series A (using Q2 2020 data). This totals 66 months on the Venture Scale curve, which is notably shorter than the 80 months we would calculate if we consistently used Q1 2024 data for all the time intervals.

Before jumping to the latest news, a quick update from my side. As I told you, I will start a small series of podcasts to interview fintech founders and VC managers active in the ecosystem. This week, finally, I will release the first episode of this series, an interview with Noam Inbar, partner at Viola FinTech, where we talked about the VC industry, the fintech market and many more. If you want to be the next guest, feel free to drop me a line on Linkedin!

Anyway we saw some very interesting news in the market this week. Revolut launched BillPay, a tool for CFO, and will introduce mortgages in Ireland in 2025, while Robinhood introduced stock lending in the UK and Satispay integrated with Stripe in Italy. A lot of acquisition this week, mostly from Saudi, with Tabby acquiring Tweeq , and Tarabut acquiring Vyne in the UK. But the biggest one was by far Salesforce acquiring Own Company for $1.9 billion. In the VC industry, Pruven Capital raised a $378.5 million second fund, and SET Ventures doubled the size of its first fund for their second one to $200 million. The italian ecosystem comes back from vacation in september, and we saw IdentifAI securing $2.2 million, Skillvue (formerly Algo AI) closing a $2.5 million round and Buddyfit being acquired by Gymondo . Finally, a lot of very interesting funding rounds from fintech startups like Bridge , Validus , Ziina زينة , Ume , Fido , Cercli (YC S23) , Palm , Neon , Drip Capital and many more.

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

Closed deals

• Payment startup Bridge secures a $58 million in funding to build the "Stripe of crypto"
• ​​Singapore based fintech Validus closes a $50 million round in debt financing
• FNZ Group announces management change along with $1 billion investment from current shareholders
• Dubai based fintech Ziina زينة secures a $22 million series A led by Altos Ventures
• PayPal Ventures invests $15 million in brasilian fintech Ume
• Payroll startup Cercli (YC S23) bags $4 million to build the Rippling for MENA and Middle East
• Ghanaian fintech Fido secures a $30 million series B
• US based fintech Palm secures a $6.1 million seed round to help big corporates move around money faster
• Digital monetization platform Monda secures a $5 million seed round
• Brasilian fintech Neon secures R$500 millions in latest series E funding round
• OpenAI co-founder Ilya Sutskever raises $1 billion for its latest venture, Safe Superintelligence Inc.
• HR and payroll platform Oyster® raises a $59 million Series D
• Drip Capital secures $113 million in funding to provide capital to SMEs
• London based Capsa AI secures $2 million in seed funding to help PE automate low skills tasks

Insights on the VC industry

• Clean Energy Ventures closes a second oversubscribed fund at $305 million
• Vertex Ventures China closes a $491 million second RMB-denominated fund
• SparkLabs Global Ventures closes a $50 million fund to back AI startup
• Pruven Capital launches its $378.5 million Fund II to support fintech and B2B tech startups
• SET Ventures double the size of its last fund to $200 million to back climate tech startups

News on the market

• Management software Zoho officials enters in fintech with the launch of a payment getway
• Revolut will introduce mortgages in Q1 2025 starting from Ireland
• Bitpanda Technology Solutions signs RAKBANK as first partner in the UAE
• Nigerian Tingo Mobile ceo has been fined $250 million over accusation of fabricated fintechs
• Revolut launches BillPay, that automate payments for corporates, targeting CFO to double down on business accounts
• Saudi fintech Tabby acquires digital wallet startup Tweeq in regional consolidation
• Tarabut acquires UK based A2A payment platform Vyne
• GoCardless acquires Nuapay to expand payment capabilities
• Revolut is releasing dedicated crypto payment cards
• Paylocity acquires corporate spending startup Airbase for $325 million
• Robinhood introduce stocks lending in the UK
• Polish fintech BLIK expands in EU through a partnership with Revolut
• Salesforce acquires data management company Own Company for $1.9 billion in cash

A special look in the Italian market

• Milan-based IdentifAI secures a $2.2 million round
• Milan based Cleafy expands it online banking fraud prevention solution in the UK
• Italian tech group AlmavivA acquires Texas based Iteris, Inc. for $335 million
• Skillvue (formerly Algo AI) closes a $2.5 million round led by Italian Founders Fund and 14Peaks Capital
• Another Italian startup completes an exit, with Buddyfit being acquired by Gymondo
• Satispay connects with Stripe to offer payments through the platform in Italy

And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

• Seamless 2024 | Munich - 10-11.09.2024 (Link to the invite or website)
• Italian Tech Week | Turin - 25-27.09.2024 (Link to the invite or website)
• Newport investor summit | Newport (RI) - 26-27.09.2024 (link to the invite or website)
• Bits & Pretzels founders festival | Munich 29.09-01.10.2024 (Link to the invite or website)
• Milan Fintech Summit | Milan - 08-09.10.2024 (Link to the invite or website)
• VDS+ | Valencia 23-24.10.2024 (Link to the invite or website)

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

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.
• Shoppy Code:Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

Take also a look at the last edition of the newsletter, Weekly update #44