EC venture capital

Fintech fundraising has reverted to the mean • ZebethMedia

By zebethcontrolPosted on October 12, 2022Posted in cb insights, EC Fintech, EC Newsletter, EC venture capital, Fintech, The Exchange, venture capitalNo Comments

Global startups focused on building financial technology saw their fortunes improve last year as investors doubled, and more, the amount of capital flowing into fintech companies, measured on a quarterly basis. The comedown from those highs took longer. But, today, looking at Q3 2022 data from CB Insights, it’s clear that the fintech funding boom is behind us; even more, global fintech funding activity is now back to where it was before 2021, indicating that last year was more aberration than new normal for the startup category. The Exchange explores startups, markets and money. Read it every morning on ZebethMedia+ or get The Exchange newsletter every Saturday. It’s a well-trod statistic that around one in every five venture capital dollars raised in 2021 went to fintech. It is also no huge surprise that after a heady year, fintech fundraising has fallen along with overall venture activity. But the portion of venture capital disbursement that fintech can lay claim to is also in decline. Let’s chat through the numbers and then ask ourselves what a new valuation landscape, a changed venture capital market, and a frozen IPO market mean for fintech startups large and small. To work!

The Muse buys Fairygodboss as roll-up acquisitions come to VC

By zebethcontrolPosted on October 12, 2022Posted in Acquisitions, consolidation, EC News Analysis, EC venture capital, roll up, Startups, the muse, VentureNo Comments

Not every startup can reach its full potential — or survive — on its own. Venture capital puts a lot of emphasis on startups reaching unicorn status or exiting through an IPO, largely because such successes are crucial to making the venture model work. But this makes it easy to overlook the fact that many companies would see more success if they were acquired or combined with other startups. Kathryn Minshew, the co-founder and CEO of recruitment and job application marketplace The Muse, started thinking about this a year ago when her startup had been around for a decade. After a year of floating the idea of consolidation to other targeted recruitment platforms, her company, which helps users find jobs based on company culture and what they value, made its first acquisition. The New York-based startup announced this morning it has acquired Fairygodboss, a recruitment platform aimed at women and working mothers. The purchase price was undisclosed, and parties declined to comment on it, but a source familiar with the transactions said it was a mix of cash and stock. Fairygodboss is producing about $10 million in yearly revenue, which infers the purchase price was presumably favorable. Minshew said this will likely be the first transaction of many for The Muse because the recruitment tech space is in dire need of consolidation.

Could corporates be good matchmakers for startups and VCs?

By zebethcontrolPosted on October 9, 2022Posted in cloudflare, EC News Analysis, EC venture capital, Enterprise, StartupsNo Comments

Cloudflare last week announced a $1.25 billion funding program for startups that build on its software, Cloudflare Workers. But this isn’t a corporate venture fund and that sum is not company money. Rather, it’s an initiative in which the cloud infrastructure company curates a group of its startup customers and presents them to venture capitalists, each of which committed $50 million to back companies building on Cloudflare Workers. The list of 26 venture funds includes big players like NEA and Boldstart and smaller firms like Pear VC. Cloudflare CEO Matthew Prince told me that number has continued to grow since the project was announced in September. The reason this is interesting is that while public companies have been drastically increasing their presence in startup funding in recent years, it’s largely been through one of two playbooks: Companies were either setting aside a sleeve of capital on their balance sheet to back startups in adjacent or complementary sectors to their own, or they were launching an accelerator program. This strategy from Cloudflare feels fresh. And if successful, it could prove to be a pretty smart bet. The program essentially helps funnel money to its customers, thus securing their need for the platform, while also attracting startups to consider building on Cloudflare over other platforms — without Cloudflare having to spend anything. It’s worth noting companies entering this program, regardless of whether they get pitched to VCs, do get multiple software features for a year for free. But will a corporation like Cloudflare be a good matchmaker? Prince seems to think so — he told me that the idea for the program came from the company’s conversations with venture capitalists.

US VC funding is holding up, but globally things are far from fair • ZebethMedia

By zebethcontrolPosted on October 9, 2022Posted in EC venture capital, global venture capital, Startups, The Exchange, Venture, venture capitalNo Comments

Hello and welcome back to The Exchange’s weekend missive. If you are reading this on ZebethMedia and want to get the letter in your inbox, head here. Your regular host Anna Heim is off this week on a much-deserved vacation, so I’m stepping back into my old role as newsletter scribe. It’s good fun to write this note, frankly, so thanks for having me. Today we’re taking a look at the good news from the venture market we covered this week, but with an added global perspective. We’re broadening our lens a bit to get more general figures to better understand if the good news from the United States is holding up elsewhere. Call it a look abroad in Anna’s honor. To work! — Alex The Good In the United States, venture capital activity is holding up better than we anticipated. That’s good. Perhaps even better, venture interest in software startups is looking downright robust. That matters because most startups are software companies; if software startups are healthy, then upstart tech companies in general are doing OK. And given the United States’ weighty influence on startups overall, then startups must be OK everywhere, right?