Female Foundry Week 77: State & private capital. Walking the line of herd mentality. VC investments slip further. Thee Point Zero with Yvonne Nagawa from Black Seed.
Welcome to The Week 77, 2023 Edition of the Female Foundry newsletter!
Female Foundry - where investors and female founders meet.
In the news
Swiss DePoly, co-founded by Samantha Anderson, fetches a €14m Series A round co-led by BASF Venture Capital and Wingman Ventures for its chemical recycling technology; Also Swiss, Avea, co-founded by Sophie Chabloz and Teresa Budetta picks up a €2.43m Seed round led by Maximon for its longevity supplements brand; London-based start-up OutDID, co-founded by Ana-Maria Pricop, raises a €2.3m round led by Jump Crypto for its identity verification solution; London-based Statement, co-founded by Olivia Stannah, fetches a £1.5m Pre-Seed round led by Northzone to bring better comparison to payments; Berlin-based eaze, co-founded by Nina Konig, picks a €1.7m Seed round led by Redstone and Enjoy Venture Human Impact Fund for its sleep-coaching platform; German quantum computing software startup, Quantagonia, co-founded by Sabina Jeschke, fetches a €4.3m Seed round led by Tensor Ventures for its Hybrid Quantum Platform; London-based AI video generation startup, Immersive Fox, founded by Alisa Patotskaya, secures €3.3m Seed round led by Redseed VC.
Lina Zakarauskaite from Stride VC is promoted to a partner; Cornerstone VC hires Ella Wales Bonner as its first female partner.
Spotlight
State & private capital.
UK chancellor Jeremy Hunt is to announce wide-ranging pension reforms in his speech next week that will include plans to ease rules to make it “as easy as possible” for retirement funds to invest in riskier, illiquid assets, including start-ups and VC funds, with the objective of boosting UK economic growth and bringing more funding options to the stagnant VC sector. The move comes as new data emerged this week about the fading allure of Fund of Funds. Fundraising for FoFs has been on the decline for years, however in the first quarter of 2023, US-based FoFs raised only $400m, compared to $3bn in 2022, $1.7bn in the first two quarters of 2022. This is an 76% drop just from last year and a dramatic plunge from the peak in fundraising of $33.7bn in 2017. - Insight Partners defies the odds.
Should governments play a more significant role in mobilising private capital? The European Innovation Council proclaimed itself this week as the most active European investor. The announcement comes after the three-year long saga of the first ever scheme developed by European Commission to invest directly into European most promising deeptech startups, that badly impacted the credibility of the EU as an investor and left many startups in limbo. The Commission blamed severe delays in its capital deployment on “restructuring” of the fund between the pilot and the fully-fledged programme, let’s now hope that this was only a shaky start. Interested to know who are the other most active investors in Europe right now? Look at the data published this week that completes the picture. Read full story ➯
Fundraising
Walking the line of herd mentality.
The amount of funding that has gone to AI startups so far this year has already surpassed the total funding raised by AI startups last year, even when OpenAI's $10bn round is excluded. For the past six months, every third deck I have reviewed from the Female Foundry Pitchbox, has included the word ‘AI’ in it. Capital-hungry founders are following the VC craze. The question is, do you really have to?
There are really just two types of VC investors: Mavericks and Followers. Let’s start with my personal favourite: the Maverick. Mavericks think independently, conduct top-down market analysis, and are open to venturing into unconventional, and therefore more risky areas, prepared to be punished for them if things don’t work out - think a16z. VC investment returns take several years to materialise, and so for Followers, the possibility of overlooking the next major wave is actually seen as risky, and so, the moment the ‘new big thing’ emerges, it is more likely to align with the majority, the Followers. It is Mavericks, who believed that giving a ride, Uber, or a couch to sleep on, Airbnb, to a stranger is not a bad idea. My totally loose estimate is that you will meet maybe one Maverick for every nineteen Follower investors. And so, you have got your answer to the question.
Not so easy.
The answer lies really in how YOU see yourself. See, making your startup relevant to any “next big thing” just to appeal to the majority of investors can definitely backfire - ever heard of Web3 startup skeletons? And so, before you hear again from the next potential investor “who else is investing?”, first honestly ask yourself, am I a Maverick or a Follower?
Analysis
VC investments slip further.
According to the research published this week, despite $40bn poured into AI startups in the past six months, that includes a $10bn investment by Microsoft in OpenAI and $1.3bn in funding for rival Inflection AI, global VC funding significantly declined in Q2 of 2023. By region, Latin America had the biggest drop with an 86% slump while the U.S. and Europe fell 65% and 69% respectively. Additionally, there was a 19% decrease in the number of deals. VC funding globally hit an annual record of $745.1bn in 2021. Responsible for some of the biggest investments in 2021, but now deterred by difficult exits and high interest rates, growth investors clearly have lost their appetite for outsized deals.
From the Community
Three Point Zero Podcast
Bringing capital to black founders, with Yvonne Nagawa, the Founding Partner of Black Seed.
This week, I spoke with Yvonne Nagawa from London-based Black Seed, a London-based emerging VC fund focused on investing in black founders, who recently announced the first close of its target £10m fund. (see: Week 73)
In the episode, we talk about why investing in black founders matters, the value of the Black Seed community, how to form relationships with LPs and how to deal with their "No"s, and why story-telling is an important skill for early-stage founders. Tune in!
Hiring
This week hiring:
DR. VIVIEN KARL ➯ Content Writer | Human Forest ➯ Social Media and Community Manager | SustainCERT ➯ Senior Product Manager.
See more jobs on the Female Foundry Job Board.
Founder & Investor Meetups
Tuesday, July 11, Berlin ➯ Meet your Mentor, Paris ➯ Midi Entrepreneures #31, Amsterdam ➯ Lunch and Research | Wednesday, July 12, Amsterdam ➯ Le Wagon Open House, London ➯ Tech + Tunes Networking.
That’s all for this week. Have a great 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.
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Check femalefoundry.co for more fundraising tools and investor content. View other Female Foundry articles.
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