Female Foundry Week 111: And back again. Minimum and Valuable. Think: CTO - think twice. AI and the rest. Community Fundraising Roundup: April.
Welcome to The Week 111, 2024 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In the news
Lausanne-based Testmate, co-founded by Siew-Veena Sahi lands a $6m Seed round led by RH Capital to change testing for sexually transmitted infections; UK fintech Abound, co-founded by Michelle He secures up to £800m in financing to expand access to fair credit; Also UK-based Dendra Systems co-founded by Susan Graham snaps a $16m Series B round led by Zouk Capital for AI-based its ecosystem restoration tools; Swiss healthtech startup Axmed, co-founded by Sofía Radley-Searle raises a $2m Seed round led by Founderful Ventures to streamline drug distribution; UK-based Accredit Solutions co-founded by Nicola Greenaway-Fuller lands £10m capital injection from Gresham House; Turkish game developer Spyke Games, co-founded by Rina Onur Sirinoglu secures $50m from Moon Ac:ve.
Spotlight
And back again.
Thoma Bravo is taking the London-listed cybersecurity giant Darktrace, co-founded by Poppy Gustafsson, private in a $5bn deal. The US-based private equity firm behind McAfee, Coupa and Figment has offered to pay 620 pence per share, representing a 20% premium to Darktrace’s closing price prior to the offer being announced. - For context, the company was priced at 250 pence per share when it went public in a stellar listing just three years ago and its journey reflects a bigger trend.
As Jamie Dimon recently said: 'The stock market is shrinking’ and although going private is not new, there is a new phenomenon of recently listed and fairly successfully exited companies going private again.
The number of private companies in the US backed by private equity firms has grown from 1,900 to 11,200 over the last two decades. Over the past few years, 2020 saw just seven IPO u-turns, with another seven in 2021. The trend however picked up in 2022, with 29 deals worth $53.9bn. In 2023, there were more - 27 to be precise - take-private announcements than IPOs, with a staggering 80% of all private equity transactions being take-privates. What’s interesting - 40% of those transactions involved recent listings (five years old or less). These companies barely had time to mature as public companies (!), and so Darktrace is not alone.
This year, there have already been five PE-backed take-privates worth £1.8bn in total in the UK alone.
Fundraising
Minimum and Valuable.
I caught up with a founder this week who, after months of development, showed me her glossy MVP ready to entice her lined-up potential customers. And no, this paragraph is not going to be about her forgetting to get regular user feedback to reach this stage; it's about something I regularly see among early-stage founders.
If I were to break down an MVP into pieces - seriously and literally - into an ‘M’, ‘V’, and ‘P’. ‘V’ - which stands for viability - but to be more precise for ‘value’ - among the three, is the most important! If you have no ‘V’ that is at least an ‘M’ (minimum), there is no ‘P’ - you've got no Product.
I hope you're still following! I see too many founders prioritising a Product (a demo, a walk-through, a wireframe) and completely missing the point of an MVP! Your Product (in an MVP) is the output of your deep understanding of value creation promised by your company and that value is central to your business: to the people you bring onboard, to partners, to vendors. And so, remember, an MVP is really a VMP - in this order!
Think: CTO - think twice.
The increased focus of VCs on backing AI startups (read below for more data) is placing more pressure on founders to get onboard tech-savvy CTOs (yep, having a CTO today does not necessarily make the business tech-savvy either). Yet, I regularly meet founding teams with CTOs who either: 1. lack a clear perspective on how AI will impact the sector their startup operates in (focusing too much on tech), 2. fail to leverage the latest technologies (nor having a clear perspective on them), or 3. are not great with spotting and developing tech talent and leading people. And yet, today, unlike just two years ago, for businesses to stay competitive, it is crucial for CTOs to excel in all three areas.
While it might be possible to motivate a CTO to stay curious, especially if they happen to also be a (co)founder—curiosity alone should tick off points 1 and 2—it’s just a whole lot harder to be good with people. And so, with the increasing pressure to get a tech-savvy CTO, don’t be fooled: think long-term, think twice and don’t forget about people.
Analysis
AI and the rest.
New data reveals a continued surge in valuations for both early- and late-stage AI startups, significantly outpacing other sectors. In Q1 2024, the median valuation of AI startups surpassed $70m for early-stage ventures and hovered around $100m for those in the late stage. This stands in stark contrast with the broader VC landscape, where flat and down rounds have reached a decade-high, comprising a substantial 27.4% of all deals.
However, amid concerns surrounding inflated valuations, there may be a glimmer of hope. The dominance of AI has alleviated competition in other sectors, opening up more enticing investment opportunities. For example, the once-crowded fintech space, which previously led in valuations, has now become less competitive and more accessible for investment, allowing promising fintech startups to gain more attention.
Community
Community Fundraising Roundup: April.
Just like last year, April has proven to be a record-breaking month! Female founders in the Female Foundry community in Europe raised a whopping €241m in April! - that is up by €27m from April 2023. Congratulations!
Hiring
This week hiring:
wattron ➯ Team Coordinator | Sorella Care ➯ Founders Associate | einwert ➯ Office Manager.
Founder & Investor Meetups
Wednesday, May 15, Paris ➯ Fund my Fintech Paris '24, Amsterdam ➯ Future Of Finance Automation, London ➯ Breakthrough Comes From Anywhere, London ➯ Fintech Insider Run Club | Thursday, May 16, Paris ➯ Apéro Innovation.
Meet me at
I am looking forward to Thursday and the Tech.eu Summit when I will be making an exciting announcement! Can’t wait for the news to go public.
On Tuesday this week you can also meet me in London at Fund my Fintech London '24.
Enjoy the rest of your Sunday. I am looking forward to the week ahead!
Agata
Written by Agata Leliwa Nowicka, an investor, a startup adviser, a two-time entrepreneur, and a founder of Female Foundry based in London.
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Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.