top of page

Future of Capital Allocation

Your weekly newsletter on the fast-evolving world of investing

 
The week's developments in investing & technology, explained | 23.11.23

If you’re enjoying this briefing, sign up here — and share it with a friend. Reading time: ~5 minutes

 

Boardroom drama eclipsed the AI investment scene this week as Sam Altman was ousted as OpenAI’s CEO. This follows intense pressure and legal warnings from concerned VC backers looking to stabilise the leadership of the company.


Sources say some major OpenAI investors explored potential legal action against the board after Altman's abrupt dismissal on Friday, which prompted an all-out revolt by employees. The move threw major investments from firms like Khosla Ventures and Sequoia Capital into uncertainty.


A turbulent chapter for the AI startup ended with an in-principle agreement for Altman to reprise his CEO role. Read on for more, including Europe's VC fundraising challenges and the transformational impact of GenAI in the classic stock/bond investment strategy.

 

—Charlie and the Research & Intelligence Team


 

The investment ecosystem


🔄 Sam Altman reclaims OpenAI CEO role: The move follows days of turmoil and legal threats from VCs after his sudden ouster last week. Joining his comeback is a new board, featuring Salesforce CEO Bret Taylor and ex-US Treasury Secretary Larry Summers.

 

💸 UK unveils US-style VC fellowship: The government will launch a £3 million scheme aimed at training the next wave of science and tech VCs. The goal is to accelerate growth in key areas like vaccines, robotics, and AI.

 

📉 European VCs struggle with fundraising: Over half have reportedly failed to return capital to their LPs in the last 12 months. But while 60% of VCs are still on the hunt for funds, the recent lack of returns has made investors dubious.


🚀 CogX Festival 2024 super early bird tickets: The CogX Festival is gearing up for another year of cutting-edge innovation and inspiration. Grab your super early bird tickets at 75% off now for a limited time!


 

Chart of the week



Generative AI and LLM operations have seen a significant influx of equity investments in 2023. Generative AI leads the way with £21.5bn in equity funding, followed by AI development platforms (£7.4bn) and data annotation services (£1.3bn).


 

How AI is transforming investing 

 

🤖 The rise of GenAI disrupts traditional investment: Morgan Stanley suggests the AI-driven leap in productivity could change the classic 60/40 stock/bond strategy by challenging the role and effectiveness of bonds in investment portfolios.


📈 Headline launches tool to help you make better investment decisions: Deepdive measures product-market fit by analysing customer behaviour, distinguishing genuinely market-aligned startups from those artificially buoyed by external funding.


Startups


🎓 Universities urged to trim spinout stakes: A recent government review advises British universities to reduce their equity stakes in startups created by students. It suggests capping equity at 10% for less IP-intensive firms and setting a 10-25% limit for sectors such as biotech and life sciences.

 

🤔 How to turn a media crisis into an opportunity: When scandal struck, HappyOrNot founder Miika Mäkitalo didn't hesitate to act. From strategic positioning to quickly assembling a swift response team, here’s the founder's battle-tested advice for startups dealing with a media crisis.

 

Jobs



 

Noteworthy deals


  • Amsterdam-based SkyNRG, a sustainable aviation fuel producer, raised £152m from Macquarie GIG Energy Transitions Solutions Fund.

  • UK-based crypto exchange Blockchain.com has raised £88m in series E funding led by Kingsway Capital.

  • NMD Pharma, a Danish-based biotech company, has raised £65m in series B funding led by Jeito Capital.

  • RED Horticulture, a Lyon-based start-up designing LED lighting solutions for greenhouses, raised £15m in series A funding led by the European Circular Bioeconomy Fund, Demeter IM and Unigrains.

  • Generative Engineering, a London-based engineering software company has raised a £3.5m pre-seed round led by EQT Ventures.


 

✍️ Enjoying this newsletter?  Subscribe to our free weekly briefings on Preparing for AI, Cinema & AI, The Race to Net Zero, AI & DeepTech and The Future of Work.


You can relive CogX Festival 2023 on our YouTube Channel now. Make sure you join us in person next year — get your super early bird tickets for CogX Festival 2024 now!

 

Disclaimer: This content is for informational and educational purposes only. It does not constitute financial, investment, legal or tax advice.

bottom of page