February 22, 2024

Programming note: Dan is on his way back home, so he'll be back in your inboxes tomorrow morning! ✈️

Top of the Morning

Illustration: Maura Losch/Axios

New PitchBook data estimates that of the 667 first-time venture managers that closed their funds between 2019 and 2021, over 247 of them won't be able to raise a second one.

Why it matters: The dearth of funding could have an outsized negative impact on the ecosystem of nascent and smaller startups.

What they're saying: "An unfortunate impact ... will be the falling capital availability within [smaller startup markets], dragging back the growth these ecosystems had realized," notes PitchBook.

  • "Another side effect could be founders determining that the cost-effective standards of living, wages, and other incentives typical of smaller market do not outweigh the value of being based in flourish tech hubs with enduring capital sources."

By the numbers: Pitchbook estimates that $58.5 billion has been committed to first-time venture funds since 2017. That's a 110.8% increase in dollars, and 67.8% jump in fund count from the 2006-2016 period.

  • However, first-time managers raised just $6.5 billion in 2023, down from $7.3 billion in 2022 and $14.7 billion in 2021 (a peak year).
  • Time between first-time and second funds grew to 2.6 years during 2023.
  • Historically, 63% of first-time managers were able to raise a second fund.
  • Just 56.7% of first-time managers outside of California, New York, and Massachusetts have raised a second fund, historically.

Between the lines: It's a flight back to safety for limited partners.

  • With the lack of distributions over the last couple of years, many LPs have retreated to backing who they see as tried and true venture managers, instead of continuing to take bold bets on untested investors.
  • In 2023, 75.3% of capital went to established managers (those that have opened at least four funds) — marking the second consecutive year they've attracted more than 70% of total capital committed.

Zooming in: There's also differences across fund sizes.

  • Between 2006 and 2018, 76.7% of first-time managers that raised more than $50 million later closed a second fund; 73.1% for those who raised between $10 million and $50 million; 64.6% for those who raised less than $10 million; and just 42.3% for those with undisclosed fund sizes.
  • One possible reason is that previous track records and LP relationships that helped managers raise larger first-time funds also sustain them as they raise again.

The bottom line: Emerging managers usually get the short end of the stick in tougher markets. Now we can somewhat quantify just how short that stick is.


Photo: Nicholas Kamm/AFP via Getty Images

BuzzFeed (Nasdaq: BZFD) sold Complex, the entertainment media brand it acquired for $300 million in 2021, to livestream shopping platform NTWRK for $108.6 million, the companies announced Wednesday.

Why it's the BFD: Complex's price tag is three times that of its former parent company's market cap — and it doesn't come with one of its most successful shows, "Hot Ones."

Details: BuzzFeed will retain ownership of some of Complex's popular franchises, including First We Feast, which produces the popular YouTube program "Hot Ones."

  • Universal Music Group, as well as some of NTWRK's current investors, are helping NTWRK finance the deal.
  • BuzzFeed also announced a plan to cut expenses, which includes 16% layoffs.

The bottom line: "The deal represents an enormous strategy shift for BuzzFeed, which went public two years ago in order to raise money to acquire companies and scale its offerings. Now, it's forced to offload some of its most lucrative franchises as it struggles to survive on the public market." — Sara Fischer, Axios

Venture Capital Deals

🚑 MMI, an Italian microsurgery robotics startups, raised $110m in Series C funding led by Fidelity, with Deerfield Management, Wellington Partners, BioStar Capital, RA Capital Management, Andera Partners, Fountain Healthcare Partners, Panakès Partners, and Sambatech also participating. https://axios.link/3uA1BFg

EigenLayer, a Seattle-based crypto startup, raised $100m from Andreessen Horowitz, per Bloomberg. https://axios.link/3SRxdho

🚑 Fabric, a New York-based health care management software developer, raised $60m in Series A funding led by General Catalyst, Thrive Capital, GV, Salesforce Ventures, Vast Ventures, Box Group, and Atento Capital also participating. www.fabrichealth.com

PermitFlow, a San Jose, Calif.-based construction permitting automation startup, raised $31m in Series A funding led by Kleiner Perkins, with Initialized Capital, Y Combinator, Felicis Ventures, and Altos Ventures also participating. https://axios.link/49kQoY4

Highway 9 Networks, a Santa Clara-based enterprise mobile networking company, raised more than $25m in funding from Mayfield, General Catalyst, and Detroit Ventures. www.highway9.com

Synadia Communications, a San Mateo, Calif.-based open source cloud tech company, $25m in Series B funding led by Forgepoint Capital, with Singtel Innov8, LDVP and 5G Open Innovation Lab also participating. www.synadia.com

DustPhotonics, an Israeli developer of silicon photonics technology for data center and AI applications, raised $24m in additional Series B funding from Sienna Venture Capital, Greenfield Partners, Atreides Management, Exor Ventures and others. www.dustphotonics.com

Orkes, a Cupertino, Calif.-based devops startup, raised $20m in Series A funding led by Nexus Venture Partners, with Battery Ventures and Vertex Ventures US also participating. https://axios.link/42SIHpB

🚑 Pozitivf, a San Antonio-based fertility clinic network, raised $20m in growth funding led by MonCap. www.pozitivf.com

🚑 Blackbird Health, a Pittsburgh-based youth mental health provider, raised $17m in series A funding led by Define Ventures, with Frist Cressey Ventures and GreyMatter also participating. www.blackbirdhealth.com

Dub, a New York-based copy-trading startup, raised $17m in funding (including $2m in debt) led by Tusk Ventures, with Nathan Rodland, Dara Khosrowshahi, Bill Capuzzi, Roger Ferguson Jr., Ryan Tedder, and others also participating. www.dubapp.com

Empowerly, a San Francisco-based personalized college and career guidance company, raised $15m in funding led by Conductive Ventures. www.empowerly.com

Loora, an Israeli English tutoring app, raised $12m in Series A funding led by QP Ventures, with Hearst Ventures, Emerge, and Two Lanterns Venture Partners also participating. https://axios.link/48pD2bK

🚑 Power, an SF-based clinical trial marketplace, raised $12m in Series A funding led by Kin and Contrary, with Footwork also participating. www.withpower.com

🌎 Varhara, an Indian end-to-end developer for carbon credits, raised $8.7m in funding led by RTP Global. https://axios.link/3uGpFpW

🌎 Clairity Technology, a Culver City, Calif.-based carbon dioxide removal startup, raised $6.75m in seed funding led by Lowercarbon Capital and Initialized Capital. www.clairitytech.com

Ziplines Education, a San Carlos, Calif.-based online digital skills courses, raised $6.4m in Series A funding led by Jackson Square Ventures, with Wildcat Venture Partners and WGU Labs also participating. https://axios.link/4bM7Kyz

Inco, a New York-based Ethereum layer developer, raised $4.5m in seed funding led by 1kx, Circle Ventures, Robot Ventures, Portal VC, Alliance DAO, Big Brain Holdings, Symbolic, GSR, Polygon Ventures, Daedalus, Matter Labs and Fenbushi. https://axios.link/49li2o1

🚑 UnityAI, a Nashville-based health care management startup, raised $4m in seed fudning led by Max Ventures, with Whistler Capital Partners, Nashville Capital Network, and Company Ventures also participating. https://axios.link/42LJ3hV

🚑 Elektra Health, a New York-based menopause health startup, raised $3.3m in additional seed funding led by UPMC Enterprises, with Wavemaker 360, Flare Capital Partners and Seven Seven Six Fund also participating. www.elektrahealth.com

VectorShift, a New York-based generative AI application development startup, raised $3m in Seed funding from 1984 Ventures, defy.vc, Formus Capital, and Y Combinator, Soma Capital, 468 Ventures, and Pioneer Ventures. www.vectorshift.ai

Citrea, a Bitcoin-focused company, raised $2.7m in seed funding led by Galaxy, with Delphi Ventures, Eric Wall, Anurag Arjun, BatuX, Igor Barinov, and James Parillo, and others also participating. www.citrea.xyz

Evergrowth, a Lithuanian B2B sales software startup, raised $2.2m in pre-seed funding led by Impellent Ventures and Practica Capital. www.evergrowth.com

🚑 Juniper, a U.K.-based workplace health care insurance startup, raised $1.9m in pre-seed funding led by Gateway, with 2100 Ventures, Exceptional Ventures, and Heartfelt also participating. https://axios.link/49HxbzM

Buildstock, a New York-based B2B construction materials marketplace and fintech company, raised $1.6m in pre-seed funding from Precursor, MGV, XFactor, and RefashionD. www.buildstock.com

Private Equity Deals

Aero Accessories & Repair, backed by ATL Partners, acquired AOG Accessories, creating a Miramar, Fla.-based company will specialize in the repair of complex components across fuel, hydraulic, pneumatic, and power generation systems. www.aeroaccessories.us

⛽️ Actis acquired of one operational transmission line from EDP Brasil, the fully-owned subsidiary of EDP, as part of its new Brazilian transmission business. www.act.is

🚑 Apollo Intelligence, backed by Frazier Healthcare Partners, acquired GlocalMind, a Plano, Texas-based technology-enabled market research and panel company for healthcare and the life sciences. www.glocalmind.com

DFL Deutsche Fussball Liga Gmbh, Germany's professional soccer league, canceled a potential €1b ($1.1b) media rights deal with private equity firms, namely CVC, following pushback from fans and teams. https://axios.link/3T6KXpV

HGGC invested in Rimkus Consulting Group, a Houston, Texas-based engineering and technical consulting firm. www.rimkus.com

L Squared Capital Partners acquired ERA Industries, Gen-El-Mec, and i3DMFG and formed BTX Precision, a precision components business unit.

Levine Leichtman Capital Partners acquired USA Water, a Houston, Texas-based water and wastewater systems operator, from Warren Equity Partners. www.usawaterholdings.com

Public Offerings

Intermedia Cloud Communications, a Sunnyvale, Calif.-based provider of cloud-based communication tools for businesses, withdrew its plans for an IPO. https://axios.link/3wr0loi

SPAC Stuff

⛽️ DT Cloud Acquisition, a blank check company led by executives from energy-focused asset manager KX Power, raised $60m in an IPO. https://axios.link/3Ifv4XX

More M&A

⛽️ Chord Energy (Nasdaq: CHRD) agreed to acquire Enerplus (NYSE: ERF), creating an entity with an enterprise value of $11b. Enerplus shareholders will receive 0.10125 shares of Chord common stock and $1.84 in cash for each Enerplus common share. https://axios.link/3UQ1mAC

Delinea agreed to acquire Fastpath, a U.K.-based enterprise identity management company. www.gofastpath.com

MCR agreed to purchase the BT Tower, a from BT Group. www.mcrhotels.com

POS Nation acquired GrazeCart, a Roanoke, Ind.-based farming e-commerce tech provider. www.grazecart.com

The Retirement Planning Group, owned by Cetera Holdings, acquired Dightman Capital Group, an Overland Park, Kan.-based RIA. www.planningretirements.com


Coller Capital has opened its first private equity secondaries fund for accredited investors. www.collercapital.com

Crow Holdings, a Dallas-based real estate investment and development firm, raised $3.1b for its 10th fund. www.crowholdings.com

Definition, a New York-based early-stage venture capital, raised $80m for its debut fund. www.definitioncap.com

Golden Ventures, a Canada venture firm, raised more than $100m for its fifth fund. https://axios.link/3I7F7OP

Goldman Sachs raised €550m so far for a new European open-ended credit fund. www.gsam.com

Hack VC, a New York-based digital assets-focused venture firm, raised $150m for its debut fund. https://axios.link/42LzkrK

Nocturne, an investment fund led by crypto investor Sina Habibian, is seeking $10m, per an SEC filing.

TechStars is shuttering its Seattle-based accelerator program in favor of focusing on markets "with the most robust venture capital communities," per GreekWire.

It's Personnel

Blue Delta Capital Partners, a Tysons, Va.-based government-focused venture firm, promoted John Meade from principal. www.bluedeltacapitalpartners.com

Wynnchurch Capital hired Alexis Underwood as managing director and Emma Naas as accounting manager. www.wynnchurch.com

Final Numbers

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

Nvidia's much-anticipated quarterly earnings yesterday did not disappoint, with the AI chip leader posting $18.4 billion in Q4 revenue from its data enter business, up 409% from $3.6 billion last year in the same period.

  • Total revenue was $22.1 billion, up 22% from the previous quarter and up 265% from a year ago.
  • The stock went up about 10%.

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