This Week In VC covering vc from a student perspective

August 09 (TWIVC Newsletter #03)

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This is a weekly newsletter covering the top stories in startups, venture capital, and cutting-edge technologies. The newsletter is organized into three sections: a recap of the biggest stories of the week, a long-form deep dive into a specific topic, and a profile of a lesser-known fund.


Weekly Recap

  1. Indigo Ag gets extra fertilizer 🌱

    Boston-based ag-tech Indigo Ag raised an additional $360 million in Series F funding on top of an initial $200 million in January. The biotech, digital, and data platform for farmers is planning to use the funding to expand its ecosystem of services which currently include a carbon marketplace, a transport/logistics service, and a seed treatment technology. The round was led by existing investors Alaska Permanent Fund and Flagship Pioneering, with new investors joining as well.

  2. Rippling closes a monster Series B🏦

    The SaaS employee management platform closed a $145 million Series B round of funding that values the company at an astounding $1.35 billion - quite high for an earlier stage firm! Rippling is planning to use the funding to continue in-house product development rather than acquisition. This latest round included new investors Greenoaks Capital, Coatue Management, and Bedrock capital, along with existing investors Kleiner Perkins, Initialized Capital, Y Combinator, and lead investor Founders Fund. Rippling is helmed by Parker Conrad, who previously led the HR platform Zenefits.

  3. Radish adds new pages in its novel 📚

    Serialized fiction app Radish raised $63.2 million in Series A funding in a round led by SoftBank Ventures Asia and Kakao Page. The mobile fiction platform will use the funding to expand its leadership team, add more authors to the platform, and beef up its data science department. They like to think of themselves as the Netflix for serialized fiction - let’s see how that works out! Radish has had extreme growth, with ARR growing 25x over the last year to more than $100,000 daily.

  4. Yopto markets a new round 💵

    E-commerce marketing startup Yotpo raised a $75 million Series E round led by Bessemer Venture Partners with Access Industries, Vertex Ventures, and Hanaco also participating. The startup plans to use the funding to invest in product and engineering, along with promoting customer success. Its customer base grew by 300% last year, and ARR grew by 250% since its last Series D.

  5. MetaProp searches for new properties 🏠

    New York-based venture capital firm MetaProp is raising $200 million for its fourth fund to back real estate technology startups, also known as PropTech. MetaProp has been quite active in recent months, with investments in VergeSense, Briq, and even Proper this week. The firm has backing from major industry players, including CBRE Group.

  6. ChargePoint electrifies new funding

    Electric vehicle charging network ChargePoint raised a $127 million extension to its Series H round in an effort to expand its global commercial and fleet businesses. Investors included Chevron Technology Ventures, American Electric Power, Clearvision, and Quantum Energy Partners. The California-based company already has 114,000 charging stations in its network, showing consumer adoption.

  7. TemperPack insulates a new Series C round 🧊

    The Virginia-based sustainable thermal packaging startup raised $31.3 million in Series C funding led by Wheatsheaf Group, with follow-on investments by Revolution Growth, Harbert Growth Partners, SJF Ventures, Arborview Capital, Tao Capital, Third Prime Capital, and Greenhouse Capital. TemperPack is seeking to use the funding to boost manufacturing of its ClimaCell technology, in an effort to meet customer demand.


VC Profile

I like to profile lesser-known venture funds who are focused on impact investing, run specialized mandates, or have a diverse set of GP’s leading the fund. Let me know if you come across an interesting fund!

This week, I’ll be profiling Social Impact Capital, an early stage venture capital firm backing companies with a scalable social impact. Social Impact Capital is based in New York, but invests worldwide with a generalist focus (though they prefer to invest in consumer products and services). Specific verticals include energy, water, food, health, environment, housing, social justice, and education. Social Impact Capital is led by Sarah Cone, who previously was an investor at Illumniate Ventures and has been previously associated with Google, Amazon, and Fenwick & West.

Social Impact Capital focuses on seed-stage and series A investments, either as a lead investor or a junior investor. Notably, her team spends about 100 hours of research and due-diligence for each deal.

I’m excited by these recent investments in the last year:

Recent exits include:

I’m excited by their focus on investments in emerging technology and social impact causes, as they both generate a return and help improve humanity as a whole.


Longform: Has COVID-19 hurt venture capital and startups permanently?

In March and April, doomsday alarms were ringing across the startup ecosystem, with venture capital funds stopping all new investments and startups implementing contingency plans that included potential layoffs. For many, the introduction of COVID-19 was a sign that the bull-market of venture capital that had been rising for several years had finally come to end and would result in a major scale-back. Planned funding rounds were cut short, mergers & acquisitions canceled, and everyone began battening down the hatches.

As the first half of 2020 comes to a close, let’s ask a question:

Has a true slowdown really happened?

Most indications point to NO. Funding has remained quite versatile and active, especially for more mature startups. Several companies have seen quite large mega rounds, like Robinhood, Discord, DoorDash, and Instacart. In fact, funding was only down a little more than $1 billion from $36 billion in Q2 2019 to $34.3 billion in Q2 2020. Later-stage companies, especially those in the ed-tech, tele-health, payments, streaming, and remote work space have absolutely thrived in this new environment, receiving large mega rounds and sky-high valuations.

The strong push in recent months has separated the technology ecosystem especially from the larger environment, where retailers, restaurant chains, travel firms/airlines, and department stores are filing for bankruptcies and seeing major public market downturns. It hasn’t been completely roses and smiles for the tech industry, however, as some tech startups especially in the travel and events space have suffered large decreases in revenues. Generally, though, only 5% of companies that implemented some layoffs at the beginning of the COVID pandemic have actually gone out of business, showing that most companies were able to recover and even thrive. Especially in the last month, hiring is beginning to thrive, with job openings increasing by 30% on some recruitment platforms. Furthermore, operating expenses are starting to increase again, with more startups willing to return to normal spends on advertising, marketing, and perks from the emergency penny-pinching of a few months ago. Even with the hardest hit startups like Airbnb, bookings are beginning to return back to normal and revenues begin to rise again.

For venture capitalists, many of them were able to adapt quite quickly in transitioning deal flow online, and are seeing record fundraising occurring, with some funds even oversubscribed. The deal pipeline has become more robust for a majority of venture capitalists compared to before the pandemic, and the outlook is quite bright for the industry.


Addendum

If you have any suggestions, comments, or ideas, please feel free to reach out to me at rohil at upenn dot edu.