Female Foundry Week 119: In the game. Titles et cetera. Down and down again. Community Fundraising Roundup: June
Welcome to The Week 119, 2024 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In the news
Swedish startup Arkion (formerly known as Skyqraft), co-founded by Sakina Turabali, raises a $4m Series A round led by Subvenio Invest for its energy infrastructure inspection platform; Minich-based trail, co-founded by Anna Spitznagel, raises a €1.45M Pre-Seed round led by CapitalIT to enable trustworthy AI systems; London-based Earlybird, founded by Claudine Adeyemi-Adams FIEP, raises an $800k Pre-Seed round to help job seekers secure employment using its voice-first AI software; London-based Byway, founded by Cat Jones, raises a £5m Series A round led by Heartcore Capital to make journey-based travel mainstream.
Icelandic early-stage investor Frumtak Ventures, co-founded by Svana Gunnarsdottir, has raised a $87m fourth fund to invest in B2B SaaS and Deep Tech startups at the Seed or Series A stage.
Spotlight
In the game.
Index Ventures announced its new $2.3bn fund on Wednesday a fund dedicated to taking advantage of recent breakthroughs in artificial intelligence, which the venture capital firm believes will ultimately reshape entire economies. Index, which invested in European poster child Mistral last year valued last month at $6.2bn (almost 24x of the price Index paid in 2023), and claims that over half of its recent investments have been in AI. Index follows other big VC players eyeing AI opportunity with large funds - Andreessen Horowitz closed a $7.2bn fund in April, and General Catalyst is said to be closing its new $6bn in the coming weeks.
Established funds are on a roll.
With fewer startups around, high-performing ones are even more sought after, especially those leveraging AI. For many small VCs, exercising their pro-rata rights in subsequent funding rounds of their ‘winners’ is a way to keep in the game. However, this can be challenging when a big-name fund, which drives up valuations and wants to take a significant share of the follow-on round, is involved. Many small VCs just can't afford to participate in these subsequent rounds and drop out.
As a result, there seems to be a wave of new pro-rata-targeted funds that help early-stage investors exercise their pro-rata rights by funding them, typically for a 10% fee forming. (check: Alpha Partners or Signal Rank)
With fewer growth-stage deals and scarce capital for early-stage funds (check this week's Analysis story), an abnormally high number of VCs are unable to fund their pro-rata rights. Will pro-rata funds provide a new opportunity for early-stage funds to drive returns?
Fundraising
Titles et cetera.
I spoke with a fundraising founder this week who has been struggling to gain traction with a partner at a well-known fund. She pointed that pitching her business directly to him was crucial for closing a round. I found that reasoning a bit confusing.
Titles matter, but their significance depends on the VC firm’s culture. Don’t discount Analysts and Associates in VC firms; they are often the ones generating deal flow. Instead of focusing solely on titles, prioritise building a personal connection with someone in the firm and consider their relevance to what you're building. Perhaps they serve as a board observer in a company operating within your space? Or maybe their educational background aligns with your industry? Having someone who has more to prove, understands your space and can advocate for it effectively at the investment meetings might turn to be more beneficial for you!
Analysis
Down and down again.
The ongoing IPO drought means that the VC fundraising downturn is far from over, newly released data indicates.
Globally, less than $36bn in exit value reached limited partners' pockets in Q2 - the lowest quarterly amount since 2016. On the fundraising side, with $80.5bn in capital commitments from limited partners worldwide, the venture capital industry is on track to attract the lowest amount of capital from LPs since 2015. Mainly large and accomplished fund tend to attract new capital these days (see first story). In 2024, fewer than 1,300 new funds across various sizes and sectors are expected, compared to nearly 4,000 in 2021. That’s almost a 70% drop.
Community
Community Fundraising Roundup: June
June was a strong fundraising month for female founders from the Female Foundry community in Europe, who raised €96.8m. Health, fintech, sustainability .. and AI infrastructure companies attracted the most capital.
Hiring
This week hiring:
Dexory ➯ Product Marketing Manager | Faircado ➯ Marketing Intern | Cozero ➯ Sustainability Success Manager | Telness Tech ➯ Operations & Strategy Manager.
Founder & Investor Meetups
Tuesday, July 16, London ➯ CDI Annual Showcase & UCL Tech for Good Live Pitch Final | Thursday, July 18, London ➯ Velo VC | Saturday, July 20, Paris ➯ Founders Running Club | Saturday, July 20, London ➯ EasyA & Polkadot London Hackathon.
That’s all for today. Have great week ahead - 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.
Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.
♡
Thank you Alice and Robin for the research.