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OpenAI Startup Fund quietly raises $15M | TechCrunch

April 26, 2024 9:13 PM0


The OpenAI Startup Fund, a venture fund related to — but technically separate from — OpenAI that invests in early-stage, typically AI-related companies across education, law and the sciences, has quietly closed a $15 million tranche.

According to a filing with the U.S. Securities and Exchange Commission, two unnamed investors contributed the $15 million in new cash on or around April 19. The paperwork was submitted on April 25, and mentions Ian Hathaway, the OpenAI Startup Fund’s manager and sole partner.

The capital was transferred to a legal entity called a special purpose vehicle, or SPV, associated with the OpenAI Startup Fund: OpenAI Startup Fund SPV II, L.P.

SPVs allow multiple investors to pool their resources and make an investment in a single company or fund. In the VC sector, they’re sometimes used to invest in startups that don’t fit a fund’s strategy or that fall outside a fund’s terms. SPVs can also be marketed to a wider range of non-institutional investors.

It’s the second such time the OpenAI Startup Fund has raised capital through an SPV — the first time being in February for a $10 million tranche.

The OpenAI Startup Fund, whose portfolio companies include legal tech startup Harvey, Ambiance Healthcare and humanoid robotics firm Figure AI, came under scrutiny last year after it was revealed that OpenAI CEO Sam Altman had long legally controlled the fund. While marketed like a standard corporate venture arm, Altman raised capital for the OpenAI Startup Fund from outside limited partners, including Microsoft (a close OpenAI partner and investor), and had the final say in the fund’s investments.

Neither OpenAI nor Altman had — or have — a financial interest in the OpenAI Startup Fund. But critics nonetheless argued that Altman’s ownership amounted to a conflict of interest; OpenAI claimed that the general partner structure was intended to be “temporary.”

In April, Altman transferred formal control of the OpenAI Startup Fund to Hathaway, previously an investor with the VC firm Haystack, who’d played a key role in managing the Startup Fund since 2021.

As of last year, the OpenAI Startup Fund — whose ventures also include an incubator program called Converge — had $175 million in commitments and held $325 million in gross net asset value. It’s backed well over a dozen startups including Descript, a collaborative multimedia editing platform valued at $553 million last year; language learning app Speak; AI-powered note-taking app Mem; and IDE platform Anysphere.

OpenAI hadn’t responded to TechCrunch’s request for comment as of publication time. We’ll update this post if we hear back.


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Global Founders Capital will deploy Rocket Internet’s cash instead of raising a new fund | TechCrunch

April 26, 2024 2:48 PM0


Global Founders Capital, the Berlin-based early stage VC firm with close ties to the German startup factory Rocket Internet, is going to become the venture arm of Rocket Internet.

The VC previously raised two $1 billion funds and, just a few years ago, its name appeared in dozens of deals per year. But then, things quietened down. Now we know why: Going forward, it’ll exclusively invest from Rocket Internet’s balance sheet.

Last year the Financial Times reported that Global Founders Capital was in the middle of a big strategic shift. A couple of weeks ago the VC firm reached out to TechCrunch to confirm the pivot and discuss the reasons behind the shift.

“To be transparent, there have been quite a few changes at Global Founders Capital in recent years — in terms of the structure of the fund and the composition of the team,” Global Founders Capital Partner David Sainteff (pictured above) told us.

Sainteff said the firm decided it’s not the right time to raise another fund because it’s not a great time to invest as they do not believe there are that many good opportunities that meet the firm’s criteria and that they don’t need more capital to remain competitive against other investors for deals.

Global Founders Capital was originally structured as a traditional VC firm with several limited partners participating in funds. With its first fund, it backed then-future unicorns such as Personio, Revolut and SumUp. With its second fund, the firm invested in several companies TechCrunch has also covered, such as Pennylane, Ankorstore and Seyna.

Prior to joining Global Founders Capital, seven years ago, Sainteff worked for Rocket Internet which was an investor in Global Founders Capital from the beginning. So there have been close ties between them since the beginning.

“Following the deployment of this second fund, we decided not to raise another fund. Instead, we’ll use Rocket Internet’s capital,” he confirmed. “We have €300 million to deploy for venture investments on the balance sheet. We don’t have any fundraising planned.”

Frankly, this is a bit odd as the firm’s past performance seems quite good. According to Sainteff, the first fund is going to generate returns between 3x and 4x. “For the second fund, it’s far too early [to say],” he continued. “But we have a few clear winners like Pennylane. We entered at the pre-seed stage and the company is worth over €1 billion.”

The new strategy means Global Founders Capital is now much smaller than it used to be, with only five partners left: Fabricio Pettena, Don Stalter, Cedric Asselman, Sainteff and of course Rocket Internet co-founder and CEO Oliver Samwer.

The new version of the firm will also only focus on early stage investments, plus the ability for follow-on investments in later rounds (Series A, B, C, etc).

Did Global Founders Capital choose not to raise a third fund because it didn’t get enough support from potential limited partners or because of the current tech downturn compared to 2021 (with the exception of the boom in artificial intelligence)? Probably the decision hinged on a bit of both.

“It wasn’t the best moment to raise funds with [limited partners],” Sainteff told us. “We think it was difficult to have the imperative to deploy capital.”

“It’s an easy decision to make when you have €300 million in the bank,” he added. “If other VC firms were in the same boat, they would have made the same decision. We don’t rule out the possibility to raise a fund when the conditions are right and favorable.”

For now, the pivot reverses much of the fund’s earlier expansion, when it scaled into more geographies, tech areas and funding stages and the Global Founders Capital name was attached to a bunch of deals.


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Norwest Venture Partners raises $3B for 17th vehicle, maintaining fund size despite market downturn | TechCrunch

April 26, 2024 5:15 AM0


Norwest Venture Partners, a 65-year-old firm backed solely by Wells Fargo, has raised its 17th fund at $3 billion.

That’s a noteworthy number, given that NVP last raised the same amount in December 2021. That was the peak of the venture boom, and at that time, the firm said it increased its capital pool by 50% (NVP’s 2019 fund closed at $2 billion) because it needed to stay competitive in the dealmaking environment where round sizes and valuations have climbed to unprecedented levels.

But things have obviously changed since then. Investors are backing fewer companies, and valuations have dropped and may fall further.

Jeff Crowe, a senior managing partner, admitted that the investment rate in venture and certain sectors is slower than it was several years ago, but he said that dealmaking in certain strategies, sectors and geographies, such as growth equity, healthcare and India, is as robust as it was before the downturn.

“We’ve kept a very steady pace and have delivered a number of nice exits,” Crowe told TechCrunch. “We felt it makes sense to keep going at the same pace.”

Since closing its previous fund, the firm has helped 36 companies realize liquidity. Not all exits were great outcomes for the firm (NVP’s portfolio company VanMoof filed for bankruptcy protection), but returns from certain exits greatly outweighed the losses, according to Crowe. He pointed to the firm’s sale of Spiff to Salesforce, the buyout of Avetta by EQT for a reported $3 billion, and the IPO of Indian-based Five Star Business Finance.

Crowe declined to comment on returns, but said: “This is fund 17. We’ve been doing this for a long time, and in the venture world, you get to stay in business if you deliver really good returns.”

NVP attributes much of its success to operating out of one large global multi-strategy fund. The firm invests in North America, India and Israel. It has an early-stage and growth equity business, and has recently added a biotech team to round out its existing healthcare practice.

The diversified approach allows the firm to adjust its strategy when the market changes. For instance, NVP planned to invest in crypto companies when it raised its last fund, but the sector fell out of favor shortly after that, and the firm didn’t pursue many deals in the space.   

“Our diversified strategy works well through ups and downs of investment cycles,” Crowe said.  “It gives us flexibility. That’s the beauty of it. We react faster to changes.”


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Campus, a community college startup, receives $23M Series A extension led by Founders Fund | TechCrunch

April 23, 2024 7:36 PM0


Although many students in the United States enter community colleges intending to transfer to four-year universities, only 16% of those students receive bachelor’s degrees within six years. But Campus, an online alternative to traditional community colleges, has an approach that aims to change that. 

Many adjunct professors at the nation’s top universities, including UCLA, Princeton and NYU, earn such low salaries that a quarter of them qualify for some form of government assistance. At the same time, the cost of education has been skyrocketing.

“I got obsessed with the idea of giving everybody access to these amazing professors” at a price that most students can afford, said Campus founder Tade Oyerinde.

Investors seem to be obsessed, too: The company announced Tuesday that it raised a $23 million Series A extension round, led by Founders Fund, with 8VC participating. 

Campus has hired adjunct professors who are also currently teaching at colleges like Vanderbilt, Princeton and NYU, paying them $8,000 a course, which is much higher than the national average. The cost of attending Campus is $7,200 a year; it’s fully covered for students who qualify for federal Pell Grants, allowing about 40% of the college’s students to study for free.

All students are provided with a laptop, Wi-Fi and access to tutors. They’re paired with coaches who are tasked with making sure that everyone stays on track. Enrollment has been growing fast, according to Oyerinde. Students want to be a part of something modern and new, he said, and they think of Campus as a trampoline into a four-year program.

Last year, Campus raised a $29 million Series A, led by Sam Altman and Discord founder Jason Citron. Solo VC Lachy Groom, Bloomberg Beta, Founders Fund, Reach Capital and Precursor Venture also participated. Earlier this year, the company caught Shaquille O’Neal’s eye, and the basketball star topped up that round.

Most of the capital from Campus’s first Series A installment went toward purchasing a physical college in Sacramento. While most students study online and are based throughout the country, the community college now offers in-person courses in phlebotomy, medical assistance and cosmetology.

Shaquille O’Neal talks investing in edtech and startups that are going to ‘change people’s lives’

Tech-like margins

The capital from Founders Fund-led Series A extension, which Campus is announcing on Tuesday, will be used to fuel growth. 

The firm boosted its stake in Campus — Founders Fund’s first edtech bet — due to the company’s scalable tech platform, said partner Trae Stephens.

“I think the structure is kind of a hack,” he said. “You can get the cost low enough that there are no out-of-pocket costs. That’s very hard to do when there are overhead costs attached.” 

Perhaps this is why VCs have historically avoided backing traditional academic institutions. 

For now, each class has on average 75 students and three teacher assistants. While Oyerinde didn’t say whether professor to student ratios will increase as enrollment numbers grow, he emphasized that Campus’ margins look like those of a tech business.

The company is very mindful of for-profit colleges’ dark past. In 2019, University of Phoenix, a private university, agreed to pay a $50 million fine and forgive $140 million in student fees, following a five-year investigation by the Federal Trade Commission into the company’s misleading claims about job opportunities available to its students.

“Campus is not going to saddle students with tons of debt. I don’t think this is good for the U.S. economy,” Stephens said. “We’re going to do this in a way that aligns with the goals of the Federal Pell grants.”

Oyerinde says the company is squarely focused on making sure that the cost of education is low (or nothing) and that students graduate.

Campus faces a surprising challenge: finding the coaches. While attracting professors (with a long waitlist) and students is simple, the company needs coaches who encourage students to stick with their education.

“If we need engineers or marketing people. That’s easy,” Oyerinde said. “But there’s not a pool of people who’ve done this particular role of building deep relationships, motivating people consistently for multiple years on end.”

It’s a good time to invest in early-stage edtech, investors say


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'Send now, pay later' startup Pomelo lands $35M Series A from secretive Vy Capital, Founders Fund | TechCrunch

April 23, 2024 1:40 AM0


Pomelo, a startup that combines international money transfer with credit, has raised $35 million in a Series A round led by Dubai venture firm Vy Capital, TechCrunch has exclusively learned. Additionally, the company is announcing a $75 million expansion of its warehouse facility.

Founders Fund and A* Capital also participated in the financing, along with early investor Afore Capital, and others.

The deal brings total funds raised to date to $55 million in equity capital and $125 million for its warehouse facility. TechCrunch covered Pomelo’s Founders Fund-led $20 million seed funding in 2022.

New backer Vy Capital is an under-the-radar investment firm that has grown to over $5 billion in assets and made headlines for backing Elon Musk in his purchase of Twitter.

Pomelo’s new round was among Keith Rabois’ last deals before recently leaving Founders Fund for Khosla Ventures, and he continues to sit on its board.

“Both Keith Rabois and Kevin Hartz went super pro rata on this round,” Pomelo founder and CEO Eric Velasquez Frenkiel said in an interview with TechCrunch, describing the Series A round as “preemptive.” He declined to reveal valuation, saying only it was an “up round.”

Hartz serves as the co-founder and general partner at A*. Previously, he also co-founded Eventbrite and Xoom, an online money transfer service that went public in 2013 and was acquired by PayPal for $1.1 billion in 2015.

In a written statement, Rabois said that “Pomelo stands out through a fundamentally different approach to remittance transfer by using credit as its foundation.”

Remittance product on credit card rails

Pomelo launched in the Philippines in 2022, allowing people in the United States to send money to the country while at the same time building their credit. In other words, Pomelo has built a remittance product on credit card rails.

Specifically, the startup has struck up an agreement with Mastercard to create what it describes as a product category called “Send Now, Pay Later” (SNPL), which it claims is “faster and with no transfer fees” as compared to traditional cross-border money movement.

Image Credits: Pomelo

Pomelo works by allowing a user to set up an account that comes with credit cards. The creator of the account can set limits, pause cards and view spending habits.

Senders can give cash, in the form of credit, to family members — which the startup thinks will help with instant access to funds, fraud and chargeback protection and, for potential immigrants that may use this to send money back home, a way to boost one’s credit score with more transaction history.  In the event that someone cannot pay, Pomelo charges a late fee, “so there is no interest on the product,” Frenkiel said. The company makes money mostly through interchange revenue, and foreign exchange is a smaller component.

Since its 2022 launch, Pomelo has added new payment options including most recently, the ability for users to send funds to GCash, a popular e-wallet (similar to Venmo in the U.S.) in the Philippines, in addition to cards. (According to a recent article by STL Partners, 67% of Filipinos use GCash.)

This ability is particularly important in a country like the Philippines where proof of ability to pay can be required before medical treatment, Frenkiel said. He relates the story of customer Danette Flores, a nurse who sends money to two family members in the Philippines with Pomelo. 

“My mom had suffered a heart attack, and she needed to be transferred to the ICU, but the hospital required proof of payment for that. My brother used his Pomelo Card to get her admitted,” Flores said.

Pomelo offers customers two options: either an unsecured credit line or a secured credit line based on its underwriting criteria at this time. The non-revolving credit line for unsecured customers gives them the ability to transfer up to $1,000 a month. On the secured side, a customer can put in a security deposit. In other words, Pomelo can hold funds in the app that effectively can be used to open a credit line.

The startup’s new capital will go toward product and market expansion. Pomelo’s next target country is Mexico.

“Mexico is certainly the largest corridor for the United States — something close to $40 billion is sent over to Mexico every year,” Frenkiel said.

Presently, Pomelo has 55 employees in the U.S. and Philippines.

As Christine Hall recently reported, cross-border fintech is hot right now. The cross-border payments market is forecasted to reach over $250 trillion by 2027, according to the Bank of England. And experts say fintechs are giving banks a run for their money (pun intended) here, especially in the business-to-business sector where artificial intelligence, machine learning and blockchain come into play — all emerging technologies fintechs love.

But there are other startups focused on the consumer market, including Alza, a startup aimed at helping meet the various banking needs of Latin or Central Americans who have moved to the U.S. With Alza, users get an FDIC-insured checking account and debit card. They also get the ability to send cross-border remittances to more than 20 countries in Latin or Central America embedded in its app via three methods, depending on the recipient country: bank transfer, cash pickup or transfer to a debit card. That company quietly raised $6.6 million in a round led by New York-based Thrive Capital in late 2021.

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TLcom Capital closes second fund at $154M to back early-stage startups across Africa | TechCrunch

April 22, 2024 2:39 PM0


Venture capital activity in Africa has shown resilience over the past six months, with major firms backing startups on the continent closing their funds despite the ongoing funding winter. 

In the latest development, TLcom Capital, an African VC firm with offices in Lagos and Nairobi and a focus on early-stage startups, has concluded fundraising for its second fund, TIDE Africa Fund II, totaling $154 million. The final close positions the firm as Africa’s largest investor across seed and Series A.

The oversubscribed fund, initially targeted to close at $150 million, attracted participation from over 20 limited partners. Notable investors include the European Investment Bank (EIB), Visa Foundation, Bertelsmann, and AfricaGrow, a joint venture between Allianz and DEG Impact.

This news comes two years and a few months after TLcom Capital announced the first close of the second fund at $70 million, matching the size of its first fund, TIDE Africa Fund I. While the broader slowdown affecting venture capital and startups globally contributed to the prolonged fundraising period, the VC firm can count a few positives, managing partner Maurizio Caio told TechCrunch in an interview. 

Notably, TLcom Capital closed the second fund in a shorter timeframe than its preceding fund despite being twice its size. Caio attributes this success to an improved understanding and acceptance of venture capital in Africa among limited partners as a legitimate asset class. Additionally, a portfolio of companies exemplifying the firm’s investment strategy played a pivotal role in garnering investor confidence and support.

Unlike many VC firms that progress from backing startups in pre-seed and seed stages to later-stage investments with subsequent funds, TLcom Capital maintains a consistent strategy. The London-based firm continues to prioritize early-stage opportunities, particularly at the seed and Series A stages, while also considering opportunistic deals at growth and later stages. For example, the investor backed 10 out of the 11 companies from its first fund at seed or Series A. Yet, it has deployed capital in follow-on rounds at later stages across both funds (a Series C investment in Andela, a unicorn provider of global job placement for software developers, and a Series B round in FairMoney, a Nigerian digital bank.)

“We like to start early when the entrepreneur is raising seed or Series A and then to be with the entrepreneur along the journey and continue to invest if we think that the company deserves more capital deployed,” remarked Caio. “The reason is that we build our portfolio such that we back 20 to 25 companies that ‘if everything works out’ can return the fund individually.”

The managing partner emphasizes that when TLcom evaluates early-stage opportunities, it assesses the potential of its portfolio companies to generate 10-20x returns. The approach, he says, is to ensure that successful companies compensate for losses and allow the firm to achieve 3-4x return on an aggregate basis.

One way the firm is bettering its risk in this regard is by backing repeat founders. Sim Shagaya (of uLesson and Konga), Etop Ikpe (Autochek and Cars45), and Grant Brooke (Shara and Twiga) are a few examples. Despite past ventures not achieving desired success, Caio says these founders gained valuable insights to avoid repeating past mistakes in their new ventures. “When things don’t go as planned, it’s important to act swiftly, pivot, and move on to the next venture, knowing that lessons learned will pave the way for future success,” he noted. 

Another is by investing earlier in deals, at the pre-seed stage. In 2020, TLcom Capital invested in Autochek and Okra at the pre-seed stage and has since followed up in subsequent rounds. Two years later, the firm launched a pre-seed strategy that involved allocating $5 million to be disbursed in small check sizes and a low-touch approach to create a pipeline to its primary strategy at seed and Series A (Upskilling platform Talstack is its first recipient). A portion of this fund, $2 million, was dedicated to co-investing in female-led startups through FirstCheck Africa, a female-focused pre-seed fund. The firm says its commitment to gender balance is evident in its majority-female partnership and investment committee, where three out of five partners are women.

TLcom Capital appoints Eloho Omame as partner to back more pre-seed and female-led startups

TLcom Capital, which focuses on traditional sectors like fintech, mobility, agriculture, healthcare, education, and commerce, has already backed six companies from its new fund, making initial investments ranging from $1 million to $3 million. They include SeamlessHR, FairMoney, Zone, and Vendease. Additionally, the firm has expanded its portfolio to include ILLA, a middle-mile logistics platform, and Littlefish, which enable payments and banking products for SMEs, marking its first investments in Egypt and South Africa, respectively.

“For us, the Big Four markets always continue to produce the most valuable companies, so it was important to add Egypt and South Africa as destinations of our capital,” said Caio, noting that TLcom’s portfolio before now has primarily been startups based in Nigeria and Kenya, countries where the firm has since expanded its operational capacity and expertise. 

The multi-sector-focused firm and other notable venture capital firms like Norrsken22, Al Mada, Novastar’s Africa People + Planet, and Partech Africa have raised significant funds to back African startups from pre-seed to Series C. However, as these funds are deployed across various stages of startup growth, attention will turn to the exit opportunities they facilitate and the tangible returns they deliver to their LPs, as these outcomes play a crucial role in driving the overall growth of the African tech ecosystem.

“Africa shouldn’t just be about how much money is going in but also about returns,” emphasizes Caio. “We need global capital to look at Africa and think of a place where good investments can be made and technology can generate much value. That’s still to be achieved at scale, so that’s our primary target.”


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Seraphim Space launches second VC fund with nine investments already under its belt | TechCrunch

April 22, 2024 11:33 AM0


Seraphim Space, the UK-based space tech investment group is formally launching its second VC fund following its first close with limited partners including Airbus, TechCrunch learned exclusively. The early stage fund will build a global portfolio of 30 startups that will be backed at the seed and Series A stages.

CEO and manager Mark Boggett declined to disclose the percentage reached and fund’s targeted size, but said it should be larger than Seraphim Space’s 2017 £70 million VC fund (around $90 million at the time.)

Like its predecessor, Seraphim’s second VC fund, SSV II, is backed by major players from the aerospace sector looking to keep up with innovation.

This time around, Seraphim will also be operating in a busier and more competitive market.

Investors have become increasingly aware of space startups and the broader market, which could be worth $1.8 trillion by 2035, up from $630 billion in 2023, according to a recent report by the World Economic Forum and McKinsey. The number of funds willing to invest in space tech has increased compared to 2017, including both generalists and specialists such as Space Capital, SpaceFund, Starbridge Venture Capital and Starburst Aerospace.

Seraphim Space hopes to stand out with its track record.Its first fund returned three times the original investment, which helped dispel the cliché that space investment is “super high risk and super long term,” Boggett said.

Returns from its last fund were partly fueled by five exits — the trade sale of chip company UltraSoC to Siemens and four IPOs: Arqit, AST SpaceMobile, Nightingale and Spire Global.

Satellite constellation operator Spire Global to go public via $1.6 billion SPAC

However, today’s public market is a different world compared to 2021, especially for tech listings. This affects both Seraphim Space’s portfolio companies that went public and the investment group itself.

The firm’s growth fund Seraphim Space Investment Trust (SSIT) listed on the London Stock Exchange in July 2021 with £250 million in gross proceeds (some $300 million at the time.) After an all-time low in July 2023, its market cap is now £130 million, or $162 million, despite the fact that SSTI’s largest holding, ICEYE, became EBITDA profitable last year.

These market conditions forced the cash-strapped SSTI to focus on follow-on investments rather than new deals, and suggested that getting funding through the LSE for early-stage, non-profitable bets would be even harder.

“With VC funds, we’re able to make mistakes and have failures and high levels of risk over a longer period of time than the public market is comfortable with,” Boggett told TechCrunch. And while it didn’t help that SSIT was trading at a markdown, its existence has been helpful in other ways.

Through an approach known as a warehouse arrangement, SSIT funded the nine investments that SSV II already made before its first close. This helped show prospective limited partners that its investment thesis goes beyond what space is usually conflated with such as. launching rockets and satellites.

Wide space

The market growth anticipated by the World Economic Forum reflects that space tech has applications in other industries.

“All of the big trends that are underway are really being enhanced by space,” Boggett said, likening it to AI in the sense that “it’s really an enhancing capability, a facilitating capability for every other sector.”

The application of AI to space data is one of main themes SSV II will invest in. In fact, it already has done so by backing insurtech startup Delos and carbon credit verification platform Renoster. Both companies use large troves of data and modeling to address issues related to climate change.

Seraphim Space’s enthusiasm for companies like Delos is two-fold: the tech could have a real impact beyond monitoring and they have the potential for high valuations (and returns).

“They’re addressing some of the biggest problems that we are faced with.”

The fund’s third area of focus will be in-orbit computing. It sounds a bit more abstract, but also has the potential to have an impact on sectors such as agriculture and infrastructure. For instance, this category includes Aethero, a company that develops edge computers that would eventually support autonomous decision-making on orbit.

SSV II is also targeting space-enabled communications, with one portfolio company so far: Hubble Network, which wants to connect a billion devices through a space-based Bluetooth network. Its CEO, Alex Haro, knows a thing or two about locators: He previously co-founded Life360, which acquired Tile in 2021.

Hubble Network wants to connect a billion devices with space-based Bluetooth network

SSV II’s fourth theme, microgravity for science, reminded us of a company outside of its portfolio: Varda Space Industries, which is making orbital drug manufacturing a reality, and raised a $90 million Series B round a few weeks after its first capsule returned from orbit. Biopharma aside, other applications include research around new materials, Boggett said.

Defense isn’t highlighted as an investment theme, despite its recent tailwinds among funds, but Boggett acknowledged its ubiquity in space tech.

“The vast majority of space companies are dual use companies,” he said. But, he quickly added, “the bigger market opportunity is in the commercial market as they move into the broader underlying sectors.”


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Peak XV's Piyush Gupta leaves firm to start own secondary-focused VC fund | TechCrunch

April 22, 2024 10:44 AM0


Piyush Gupta, one of the operating leaders at Peak XV Partners, is leaving the firm at the end of this month to start his own fund, four people familiar with the matter told TechCrunch.

Gupta joined Peak XV (called Sequoia India and SEA then) in 2017, leading the influential venture firm’s strategic development team. Before joining Peak XV, he focused on similar things – mergers, acquisitions, and IPOs – at Morgan Stanley and Deutsche Bank for more than a decade.

Though Gupta didn’t serve as an investing partner at Peak XV, he played an important role at some of its programs including Pitstop, where investors from across the globe liaison with Peak XV’s portfolio startups each year.

“For early-stage companies, we take a more programmatic approach, such as UpSurge, where we provide a platform for multiple companies to meet with multiple investors over a few days. At later stages, M&A can be a crucible moment in the journey to becoming a large, enduring company,” his bio on Peak XV reads. “Where our job gets incredibly interesting is when we help companies through the journey from pre to post IPO. Going public is an event and a milestone, but the work continues long after that and preparation is key.”

News of Gupta’s departure was relayed by Peak XV Partners to its limited partners at its annual gathering last month, one person familiar with the matter said, where the fund also unveiled plans to launch a perpetual fund that will be bankrolled by its investment partners and extended team.

The two are parting ways on cordial terms, two people familiar with the matter said. Gupta plans to launch a secondary-focused fund and Peak XV intends to work closely with him to facilitate transactions at its portfolio firms.

Peak XV declined to comment and Gupta didn’t respond to a text.

Secondary transactions are on the rise in India. Peak XV itself has seen some exits — Pine Labs, K12 — through secondary transactions in the past two years. The firm’s holding in Mamaearth, Zomato, K12 Techno Services, Go Colors stood at a 10x-plus multiple as of last November, TechCrunch reported at the time.

SentinelOne acquired PingSafe, an early-stage startup in India, earlier this year for more than $100 million, TechCrunch reported earlier. PingSafe, which counted Peak XV’s Surge among its backers, had raised less than $4 million before the acquisition deal.


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Exclusive: Airtree Ventures already returned its first fund thanks to Canva while maintaining the majority of its stake

April 21, 2024 8:51 PM0


Venture secondaries has exploded over the last couple of years. While some firms have used the increase in activity to build up their positions in their most promising portfolio companies, Airtree Ventures is taking advantage of the momentum a little differently.

The Sydney-based venture firm, founded in 2014, has been using company-led secondary sales to slim down its equity stakes and get liquidity from some of its most promising bets. The company’s portfolio is made up of Australian unicorns including Canva, last valued at $40 billion, Immutable ($2.4 billion) and LinkTree ($1.3 billion), among others.

Craig Blair, a co-founder and partner at Airtree, told TechCrunch that not unlike other venture firms, Airtree’s goal is to deliver the maximum level of returns to its investors. But unlike many other firms, Airtree generates returns throughout the whole lifecycle of an investment, rather than just when the company exists.

“Right from the start, we want to put as much energy and thought into the exit process that we do for the funding process,” Blair said. “We look at the lifecycles of the fund, we look at businesses themselves, and think about when could be a good time to exit that business.”

Airtree backs companies at the pre-seed and seed stage; as companies stay private longer, they aren’t returning money as often during the traditional fund lifecycle. So in 2021, Airtree started seeking alternative ways to get liquidity for some of their earliest stakes, Blair said.

One of which was Canva. Airtree originally invested in Canva’s $6 million Series A round in 2015. Blair said the firm slimmed down its stake in the startup in 2021 when the company was valued at $39 billion. Airtree got a 1.4x return on Fund I from a recent Canva sale and was able to maintain the majority of their original stake.

“There is no hard and fast rule,” Blair said on how the firm decides when to slim down its stakes. “We look at the position of the fund and the role of that company in that fund [and think], ‘If we sold today at that price, what sort of future value are we giving up that we could hold? [What is] the value of liquidity versus long-term TVPI and the effect on the fund?’”

Each time Airtree has done this, it’s purposefully maintained a majority of their stake, Blair said. He said the firm still wants to get that huge win at the end, but doesn’t want to put “all their eggs into that final basket.”

This strategy makes a lot of sense looking at how far some of the valuations for late-stage startups have fallen over the last few years. While some companies are working to grow into their last valuation, many have a long way to go and may still exit for lower than they raised their last primary round.

But Airtree’s strategy isn’t foolproof. Blair acknowledges that when a company does eventually exit, Airtree makes less money off of it because of this strategy — though the final exit isn’t guaranteed to be strong, either, he said.

Blair said Airtree wouldn’t rule out raising a continuation fund — the venture industry’s current liquidity vehicle of choice — and said it may make sense if the firm wants to start selling a bundle of its shares at once. But its current secondary strategy of raising its hand when companies look to run secondary tender sales has worked out well for them thus far.

“I’d say our responsibility as investors is to return money to our LPs at the right time,” Blair said. “Selling too early can be bad, for sure. There isn’t a single answer but rather having a process about having active decisions and not passive decisions [about liquidity]. Don’t just sit back and wait for [exits] to happen to you.”


Software Development in Sri Lanka

Robotic Automations

Exclusive: A16z promotes Jennifer Li to help lead the new $1.25B Infrastructure fund

April 19, 2024 7:09 PM0


Powerhouse venture capital firm Andreessen Horowitz is promoting Jennifer Li to general partner after six years at the firm. She’s being tapped to help invest the new $1.25 billion Infrastructure fund managed by longtime a16z general partner Martin Casado.

The Infrastructure fund is part of the fresh $7.2 billion that the Silicon Valley VC giant just raised. Li has been an investing partner on the Infrastructure team for a while, which means she was already writing checks and taking board seats. But her promotion puts her in rarified air: making her the 27th general partner at the firm, and she’s hit this career milestone while in her early 30s.

While that may sound like a lot of GPs, a16z currently has over 500 employees. Plus she’s one of only four GPs on the Infrastructure team. The others are Anjney Midha who joined the firm last summer; Zane Lackey, who joined two years ago; and Casado.

“Promoting Jennifer to general partner means that much more autonomy in deal making and, as importantly, that much more influence on the team’s culture, investment philosophy, and operating model,” Casado told TechCrunch over email.

In Casado’s blog post announcing her promotion, he also mentioned that she and he were the two people largely responsible for building the infrastructure investing team. He described her as “a low ego, incredibly reliable and generous partner to work with. No detail escapes her notice, and no challenge too daunting for her to tackle. As Ben Horowitz has said many times, ‘She embodies the a16z culture.’”

In her time at a16z, Li helped the firm find data connectivity startup Fivetran, valued at $5.6 billion in 2021; and data analytics developer tool startup dbt, which hit a $4.2 billion valuation in 2022 (both of those deals were led by Casado). She led the firm’s investments in developer-focused video platform Mux, a unicorn as of 2021; database startup Motherduck, valued at $400 million earlier this year; and AI voice startup Eleven Labs, a unicorn as of January, where she serves on the board.

Prior to joining a16z in 2018, she led product at AI startup Solvvy, acquired by Zoom in 2022; led self-service and analytics products at AppDynamics, acquired by Cisco for $3.7 billion; and was a Kleiner Perkins Product Fellow in 2016.


Software Development in Sri Lanka

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