The week's developments in investing & technology, explained | 04.04.24

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This week the resurgence of crypto enthusiasm saw VC investment in the sector stealthily inch towards recovery, reaching $2.5 billion in Q1 2024 — a 32% increase from the previous quarter. While nowhere near the highs reached in late 2022, this renewed interest likely stems from Bitcoin's recent resurgence and the exciting potential around a crypto-AI fusion. Could this be the sign of a long-awaited crypto spring? We take a look at this below.

Elsewhere, OpenAI CEO Sam Altman and former Apple design chief Jony Ive are in discussions to secure $1 billion for their secret AI personal device venture, Microsoft announced a massive $2.9 billion investment in Japan to bolster its cloud computing and AI infrastructure, and the US is set to award up to $6.6 billion chip subsidy to Samsung for its Texas expansion.

—Charlie and the Research & Intelligence Team

PS. CogX Transatlantic Accelerator Early Bird offer closes on 15th April: If you are or know a UK startup they can apply for over $20k worth of support to attend, exhibit and network at CogX Festival in LA on 7th May here

The investment ecosystem

₿ After Bitcoin surge, crypto VC creeps toward a comeback. VC investment in the sector reached $2.5 billion during Q1 of 2024, marking a 32% increase from the previous quarter and roughly matching the same period last year.

🔥 Fear of inflation creeps into markets. As more market participants bet on stalling disinflation in the US, expectations for Federal Reserve rate cuts in 2024 are lowering. With recent inflation reports being hotter than expected, Fedspeak has taken on a slightly hawkish tone.

💸 Institutional investors turn to secondary market to offload private equity stakes at a discount. According to Jefferies, 99% of private equity holdings sold by big investors last year were at or below their net asset value, the highest percentage since the investment bank began tracking the figure in 2017.

📉 March early stage dealmaking saw a 14% drop in the EU, to €1.2 billion across 336 rounds from last year's €1.4 billion. The UK maintained its position as the top destination for early-stage funding in Europe, with British startups raising over €396 million.

👩🏻‍💼 Dealmaking for Europe's women-led startups slumped in Q1. Startups with at least one female founder raised just €1.9 billion across 385 deals in the first quarter of 2024, marking the lowest funding level since Q2 2020, according to Pitchbook data. Notable deals in March included  Razor Group's $100 million Series D and Sand Clinic's €4m angel round.

Chart of the week

Startups and early-stage businesses are rapidly integrating AI into their operations. A recent HubSpot report highlights that a staggering 80% of information technology and software companies have already invested in AI technologies. Similarly, the professional and business services sector is not far behind, with 77% of companies in this field adopting AI.

How AI is transforming investing 

🤖 Sam Altman and Jony Ive's Secret AI Device Startup. OpenAI CEO Sam Altman and former Apple design chief Jony Ive are in talks with major VC’s to raise up to $1 billion for their mysterious AI device startup. The unnamed company aims to develop a personal AI product that challenges the conventional smartphone experience and explores new ways of interacting with AI.

🇯🇵 Microsoft to invest US$2.9 billion in AI and cloud infrastructure in Japan. The tech giant will also train 3 million people in AI skills, open a new research lab in Tokyo, and collaborate with the government to strengthen cybersecurity defences.

💻 US to award Samsung up to $6.6 billion chip subsidy for Texas expansion. This is the third biggest grant given out under the Chips and Science Act, following similar deals with TSMC and Intel. Samsung's investment will be over $44 billion in total, including the subsidy.

🤔 Some companies might be exaggerating their use of AI to attract investors: To avoid this trap, do your research on the company before investing. Don't trust empty AI jargon, and be wary of promises of high returns with minimal risk — these are all clear red flags for “AI washing”.

Startups

💰  Monad Labs rises to unicorn status with $225M raise in the largest crypto round of 2024. The funding round, led by crypto-focused firm Paradigm, values the two-year company at $2 billion. This surge in investment reflects renewed investor confidence, supported by Bitcoin's recent positive performance.

📈 Should you build a financial model for pre-seed funding? It might seem like a waste of time early on, but investors could see it as a sign you've planned your business. Building a model can also expose weaknesses in your own thinking and reassure investors you're not just gambling with their money.

Jobs

• Investor | Energy Impact Partners | New York | $120 - $150K

• Financial Analyst | PBGC | US | $99 to $153K

• VC Associate | Helmsley | New York | $114 - $150k

• FP&A Manager | Field | London | £85 - £95K

Noteworthy deals

• Neurosterix, a Switzerland-based drug discovery startup developing allosteric modulator therapeutics for underserved neurological disorders, launched with $63m in Series A funding led by Perceptive Xontogeny Venture Fund.

• Luminance, a UK-based legal tech firm using AI to help automate the contracts process has raised $40m in Series B funding led by March Capital.

   

• Ikas, a Turkey-based e-commerce platform has raised $20 million in a Series A funding round led by the International Finance Corporation (IFC) fund, a venture arm of the World Bank Group. 

   

• Kiki World, a US-based beauty brand that uses web3 for customer co-creation and ownership, raised $7m in seed funding from a16z.

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