KPIs

The week’s top performance indicators

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Dots & Lines

The week’s top takeaways

• Exit innovation: The drought in cash returns from venture reached its 8th straight quarter, as distributions stand at a decade-low with IPOs and mergers remaining scarce. As a result, General Partners (GPs) are finding novel ways to raise cash. Sequoia is offering to buy investors out of 14-year old Stripe at $70B, balancing the firm’s confidence in the business with its LPs’ need for cash. They are not the only ones - with $70B transacted in the first half, private markets overall are on record pace for secondaries transactions. The venture sector is undergoing a forced maturation as firms discover more creative ways to generate exits as well, including “non-acquisition acquisitions” like Microsoft’s recent deal with Inflection AI, GP buybacks, sales to Private Equity firms and more. In certain challenged sectors, startups are consolidating with one another, including former rivals, to remain competitive. These new pathways to raise cash should serve investors’ needs moving forward in an asset class where the best companies take more than ten years to get liquid.

• A VC eyes the role of VP: Ohio Senator JD Vance is making history as the first venture capitalist to join a Presidential ticket after his pick this week. Famed for his ascendance from Appalachia to Yale Law School, chronicled in the book and film “Hillbilly Elegy,” the 39-year old came under prolific founder and GP Peter Thiel’s tutelage, and did a six-year stint in VC across three firms. He’s getting renown as the first “bitcoiner” in the Presidential mix, and for his support of Open Source AI. While his record in the sector is quite thin, Vance looks to be one more component in a significant tech shift to support a once-verboten cause. Venture kingpins Ben Horowitz and Mark Andreessen announced their donations to a Trump PAC, and Elon Musk said he plans to kick in $45M per month as well. Investors can view venture’s broader inclusion in politics as acceptance of the asset class and the growing importance and relevance of technology.

• Fintech’s resurgence: Financial technology - “fintech” - was once the hottest sector in venture but had a tough couple years. Lately it’s showing signs of coming back. San Francisco-based Aven, creator of credit cards backed by home equity, became the newest unicorn last week, raising a $142M Series D from Khosla and General Catalyst. This raise reinforced the trend from Q2, which saw the sector’s investments grow 19% to $8.9B globally buoyed by mega-rounds into Stripe and Alpha Sense, with US fintech up 45%. Thirty percent of fintech deal volume was attributed to crypto, which is also recovering. Challenges remain for the sector, though, as the Synapse bank-as-a-service collapse is still keeping more than 100,000 accounts from accessing $100M. Such challenges shed light on questions of regulation and accountability in an API-driven financial ecosystem. Still, financial services can serve customers a lot better, and the thesis that tech will play a part in creating that reality remains compelling.

• Design software firm Figma sold shares to Coatue, General Catalyst and others in a tender valuing the company at $12.5B, 25% above its last round but below the $20B Adobe was set to pay in their called-off merger

• Cybersecurity remains hot, with $4.4B invested into the sector in Q2, a 2.5x over the prior quarter, a trend likely to continue on the heels of the Wiz transaction, last week’s Crowdstrike outage and constant data breaches

• Climate tech VCs raised $3.4B in the first half of 2024, already almost eclipsing last year’s $3.9B total

• Israel’s startup ecosystem, which employs 14% of the country, has remained resilient despite 9 months of hostilities, completing 11 mergers, even in the face of venture funding dropping 70%

• Sequoia, Index and Insight are licking their chops for the billions of dollars in profits expected from Google’s acquisition of Wiz

• NewView, a secondaries fun spun out of NEA in 2018, is raising $700M for its latest funds, a GP stakes fund and special opportunities vehicle, following the broader shift to secondaries

• Another look at the complications and pitfalls of different approaches to startup equity splits and vesting schedules

• Cardurion Pharmaceuticals, a Burlington, MA-based firm developing drugs for cardiovascular disease, raised a $260M Series D led by Ascenta, NEA and others

• Saronic, a defense firm based in Austin that makes autonomous surface vehicles (i.e. driverless boats) raised a $175M Series B led by a16z at a $1B valuation

• Botrista, a San Francisco-based automated platform that makes drinks for restaurants, raised a $120M Series C led by restaurant operator JFC

• World Labs, a spatial intelligence company founded by Stanford researcher and Artificial Intelligence OG Fei Fei Li in April, raised $100M from a16z and Radical Ventures, at a valuation over $1B

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