12 Days of Venture Capital

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You may have heard of the 12 Days of Christmas, but instead of partridges in a pear tree, here is our 12 Days of Venture Capital.

It’s been quite a wild ride for startups and venture capital in 2023, and we at ESO are starting to get into the Christmas spiritou may have heard of the 12 Days of Christmas, but instead of partridges in a pear tree, here is our 12 Days of Venture Capital.

12 Startups Eyeing 2024 IPOs.

After two tough years for private companies looking to exit, there is finally some optimism surrounding the IPO pipeline for 2024. According to the Information, twelve of these companies looking to go public in 2024 include Reddit, Stubhub, Turo, SeatGeek, Shein, ServiceTitan, Rubrik, Skims, Klarna, Ibotta, Navan, and Cohesity.

11 Venture Funds Closed over $1B in 2023.

2023 has been a notoriously challenging year for venture funds to raise, though it did not stop these 11 funds from making it happen. According to Pitchbook, there were 11 successful funds raised in 2023 with Fund sizes over $1 billion. The funds include the following: New Enterprise Associates 18 ($3.1B) by New Enterprise Associates, Technology Crossover Ventures XII ($2.8B) by TCV, B Capital Global Growth III ($2.1B) by B Capital Group, OrbiMed Private Investments IX ($1.9B) by OrbiMed, Bain Capital Venture Fund 2022 ($1.4B) by Bain Capital Ventures, Lux Ventures VIII ($1.2B) by Lux Capital, Cosmic - Aleph 3 ($1.1B) by Cosmic Management, 270 Growth Fund I ($1.0B) by JP Morgan, C2 Investments ($1.0B) by CCMCO, Greylock XVIII ($1.0B) by Greylock, and RTP IV ($1.0B) by RTP Global.

$10 Billion Raise.

This amount marks the biggest raise of the year, and it went to arguably the company of the year: Open AI. Microsoft put in the funds back in January of this year as part of a “multi-year” agreement that valued the company at $29b.

9 Companies That Raised over $1B in 2023.

Although funding rounds have dried up a bit in 2023, there were still 9 companies that were able to raise over $1 billion in funding. They were as follows: OpenAI ($10.0B), Stripe ($6.5B), Inflection AI ($1.3B), Juul ($1.3B), Anthropic ($1.3B), Metropolis ($1.1B), Generate Capital ($1.0B), Redwood Materials ($1.0), and StackAV ($1.0B).

80% Chance of Rate Cuts Priced in.

This is the percentage chance the bond market is currently pricing in a pivot from rate hikes to rate cuts by May 2024. Everything goes back to the Fed, and nothing shuts the door on the cheap money era like the Fed having made 11 interest rate hikes since March 2022. 4 of these hikes have been in 2023 alone. Looking into 2024 though, rate cuts would mean a more forgiving investing and fundraising environment for both VCs and start-ups.

7 Notable IPOs.

We finally saw some tech IPOs in 2023, and some other notable ones as well. They were as follows: Klaviyo ($9.2B), Instacart ($9.9B), Neumora Therapeutics ($2.5B), Oddity ($1.6B), Cava Group ($2.5B), Arm ($4.9B), and Birkenstock ($1.5B).

6 M&A Events over $1B.

Fire sales may have dominated the news this year, but according to Crunchbase, there were still some big M&A events for the year with exit values over $1b. They were DTx Pharma ($1B), Versanis Bio ($1.3B), Mosaic ML ($1.3B), Scopely ($4.9B), Mint Mobile ($1.4B), and NJOY ($2.8B)

$50 Billion Valuation.

This was Stripe’s post money valuation following their employee tender offer. Stripe made major headlines this year, but not for the reason that most people thought they would. Instead of their long awaited IPO, the company instead raised a $6.5 billion round at a valuation of $50 billion to provide liquidity to current and former employees on their stock options.

4 Bank Failures in the First Half of the Year.

Over 10 weeks that started in March of this year, a string of US banks with combined assets of over $500 billion collapsed. Silvergate Capital was the first domino to fall, as Silvergate Bank was liquidated March 8th. Silicon Valley Bank went 2 days after, with Signature Bank following shortly after, and eventually First Republic Bank. The latter three of these banks represented the 3 of the 4 biggest bank failures ever, with the banks having $209B, $110B, and $229B in assets, respectively.

$300 Billion.

This is the approximate amount of dry powder that VC’s are sitting on right now. For VC’s that were able to raise in 2022 and 2023, most of that money is still sitting on the sidelines. From Q3 2022 to Q3 2023, deal count is down 36%. This is in addition to the decline that occurred between Q3 2021 and Q3 2022 of 27%. As we move into 2024, many startups have likely run out of options to delay funding rounds, and the battle for some of this dry powder stash will be on.

2 Major VC Founders Brought to Justice.

All that glitters isn’t gold, and investors learned that the hard way with the fall of FTX at the end of last year and Theranos in 2018. 2023 was the year of recompense however, with Elizabeth Holmes starting to serve her over 11 year sentence in May, and Sam Bankman-Fried being found guilty on all seven counts related to fraud and money laundering.

1 Big Winner for the Year: AI.

You would have to be living under a rock this year to not hear about the AI boom taking over the VC world. The release of ChatGPT at the end of 2022 led to a frenzy in 2023 of investors trying to get their money to startups focusing on it and alarm bells over the speed it was being developed. One thing is for certain as we go into 2024: AI is still king in the VC world.

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