Mid-Stage Crisis

Welcome Shareholders,

In this daily edition of the Brags Newsletter, we'll cover how Series B investments are taking a plunge amidst the market slowdown, a climate venture fund raises its second fund targeting climate tech startups, and an AI chip startup defies the odds with comeback funding.

So sit back, grab a snack, and enjoy!

Venture Today 👏

Series B Funding Goes Bust: Investors Hit the Brakes

• US startups are experiencing a sharp decline in Series B funding, with investment on track to hit its lowest quarterly level in over three years during the first quarter of 2023.

After a couple of quarters of contraction, Series B investment saw a decline of over 60% from the previous year's period in the second half of 2022, with the slowdown continuing into this year. Investors are supporting fewer big rounds this year, with just six Series B deals of $100 million or more, averaging less than one per week. In contrast, there were almost two per week in 2022, totaling 90 such rounds.

Nine of the ten largest series B rounds this year have been for Biotech companies, but investments in Fintech, Web3, and consumer-focused startups saw less traction compared to last year. VCs are investing significant capital at higher valuations than earlier rounds, with a median round size of $25 million in 2023. However, a decline in funding at this stage suggests investor caution towards mid-stage startups at current valuations, possibly indicating a wait-and-see approach.

Who's Raising?

Putting Money Where the Environment Is: MUUS Convergence Fund II Backs Early-Stage Climate Tech

• MUUS Convergence Fund II, led by chairman Michael Sonnenfeldt has closed $50 million to invest in startups in the green tech space.

The new fund aims to support pre-commercialization companies in need of funds to reach that milestone and follows on from its 2016 predecessor, which invested $30 million in renewable energy sectors.

The partners utilize the CRANE tool to assess emissions of the technology and seek advice from the MIT Sloan School of Management Sustainability Initiative, and the Climate Interactive think tank. The fund II has already made nine investments, including renewable energy provider BrightNight and smart heat pump startup Harvest Thermal.

Startup of the Day

Investors Bet on Mythic's Revamped Strategy for AI Chip Success

• Mythic, the previously struggling AI chip startup, has secured an unexpected $13 million injection from existing investors Atreides Management, DCVC, and Lux Capital, as well as new investors Catapult Ventures and Hermann Hauser Investment.

Despite being a fraction of its previous $70 million raise, Mythic says the new tranche will help bring its improved energy-efficient AI processor to market. Mythic's chip technology, which stores analog values on flash transistors, allows for parallel calculations without stopping, resulting in performance and efficiency gains for AI applications, in contrast to digital processors that require swapping data in and out of dedicated memory, causing delays.

Mythic saw significant challenges over the last year, with the space being crowded by a dozen startups who were similarly developing chips, including Axelera, Flex Logix, NeuReality, and others. To bounce back, Mythic has improved its development process, leveraging more development partners and off-the-shelf components to reduce costs and time to market while also making R&D more nimble as it prepares to release its next-gen chip, the M2000, and has also revamped its go-to-market strategy with a renewed focus on defense.

Memes and Other Things

Rip, I would never do this, but shoutout to the sneks out there🐍🐍

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