Female Foundry Week 115: All eyes on corporates. Know your investor, better. Performance vs. Brand Marketing. Number of active European VCs halves. Live Sessions: Demystifying Boards.
Welcome to The Week 115, 2024 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In the news
Cambridge-based microcomputer company Raspberry Pi, co-founded by Liz Upton raises £541.6m from London IPO, coming in ahead of expectations (fantastic news!); Also Cambridge-based healthtech Psyomics, founded by prof Sabine Bahn raises £4m growth capital round led by Parkwalk Advisors, to transform mental health care with AI medical devices.
Spotlight
All eyes on corporates.
J.P. Morgan Private Capital announced on Thursday this week closing of its inaugural $500m biotech fund and joining a fast-growing group of big corporations looking to back early-stage companies. More examples from the past two months: also this week, the tech giant Cisco launched a $1bn AI fund, in April Toyota launched a new $150m climate-focused fund and earlier this year Saudi Aramco injected $4bn of cash into its venture arm to back energy-transition companies, brining the total of capital to a staggering $7bn.
As traditional venture capital firms face challenging fundraising conditions (check the ‘Analysis’ section below), large corporates across various industries—from pharmaceuticals to automotive and beauty brands—are increasingly leveraging their huge balance sheets to put in early bets. Given the availability of their capital, industry know-how, and connections, corporate venture capital arms—rare to see on startup cap tables just five or six years ago—are here to stay. Climatetech, biotech, and high-tech opportunities driven by the rise of AI seem to be currently the hottest areas for CVC investments. See the most active corporate AI backers right now ➯ here and climatech backers ➯ here.
Fundraising
Know your investor, better.
I know fundraising times are tough. It seems that every second startup I speak to these days struggles to gain traction with prospective investors, and my observation is that those that do are more prone to rushing to get the deal quickly, foregoing any diligence on their prospective investors! I get it, startups need cash to grow. But growing a company is also a long game. At the very least, as part of your investor conversations, make sure you cover the following questions: Are you actively deploying capital (Am I wasting my time with you?—Could be the first investor call). When are you planning to fundraise for your next fund (availability of follow-on capital). Could you tell me more about the network you have within my industry (industry introductions). Who are the follow-on VC investors you could introduce me to in the subsequent round of financing (prospects of follow-on fundraising). Do you offer any support in attracting the best talent to my startup (value-add). How do you believe my industry will evolve in the next five years (expectations check). —The best founders ask these questions somewhere down the line before the deal is signed. Do you?
Performance vs. Brand Marketing.
With a more complex funding environment, I see startups getting more and more creative when it comes to acquiring their customers. Today, more than ever, making marketing bets can prove to be costly. As an early player, how can you strike a balance between budgeting for performance and brand marketing to attract new customers into your product funnel? I have found this article that covers the topic very well.
Analysis
Number of active European VCs halves.
The data released earlier this week reveals that the number of active VCs in Europe has plunged by over 50%. Only 906 European VCs made two or more investment deals in 2023, a decrease from 1,955 in 2022. In comparison, US-based investors saw a 38% drop during the same period. Most likely, the challenging fundraising environment since 2022 has been a key factor behind this dramatic drop. A recent global survey indicated that 13% of venture capital GPs currently plan to skip raising another fund, up from 6% in 2023, while 27% face delays in their fundraising. In the first quarter of 2024, European VCs raised €4.6bn, hinting at a yearly total slightly below the previous year. With interest rates currently kept at high levels, will we see a VC fundraising rebound anytime soon?
Community
Live Sessions: Demystifying Boards
An effective advisory board can be key to your success, but when should you start thinking about forming one? How can you make your board work for you?
Join me for a 30-minute virtual session in two weeks time to gain practical tips and have your questions answered in relation to board formation and its management. I will be joined by Nic Lenz, an experienced board advisor and angel investor, and Zurich-based Fatemeh Nikayin, who earlier this year raised a €7m Series A round for her company Rivero. This is going to be an open lunch session for anyone to ask questions.
*Please note that the session will only be available live and will not be recorded.
Hiring
This week hiring:
Bene Bono ➯ Community Management - Internship | Cozero ➯ Sustainability Manager | watttron ➯ Key Account Manager.
Founder & Investor Meetups
Tuesday, June 18, Berlin ➯ Legal Tech Roundtable | Wednesday, June 19, London ➯ Networking and Open-Mic Pitching, London ➯ 11:FS Fintech Insider Run Club | Thursday, June 20, Paris ➯ Hook x Le Wagon.
Applications for the next Newton Fellowship Program cohort are now open! If you have venture capital experience, want to advance your investment career and develop a strong community of peer investors ➯ Apply here by 3 July 2024.
That’s all for this week. ..See you next Sunday!!
Agata
Written by Agata Leliwa Nowicka, an investor, a startup adviser, a two-time entrepreneur, and a founder of Female Foundry based in London.
Suggestions? Drop me an email.
♡
Thank you to Alice for the research.
Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.