Second Wind

Slync Gets a New Start, Dollar Investments in Chinese Startups Take a Dive, and Link Ventures Launches Third Early-Stage Fund.

Author

Adam from VC Brags
February 24, 2023

Welcome Shareholders,

In this daily edition of the Brags Newsletter, we'll cover how a startup is looking to move past founder fraud, dollar investments plunging due US-China trade tensions, and a Boston-based venture firm closing its third-fund targeting early-stage startups.

So sit back, grab a snack, and enjoy!

Startup of the Day

  • Supply chain management software startup Slync is looking to put its founder troubles behind it by raising $24 million through a combination of debt and equity led by Goldman Sachs.

The new funding round also saw participation from Blumberg Capital, ACME Ventures, and Gaingels, bringing the total raised amount to over $100 million and comes at a much-needed time for the company. Christopher Kirchner, the founder of Slync, was charged by the Justice Department and SEC this month for diverting $20 million from the company to fund his lavish lifestyle, including a private jet, sports events, and failed soccer club bids. He told private bankers that the amount used from venture firms was "a distribution from the company", but it was one that was never authorized by the board of directors. This led to Slyc's staff, vendors, and sponsored team (NHL's Dallas Stars) going without pay for months together. At the same time, the company saw several high-level departures, including its chief marketing officer, chief revenue officer, and chief financial officer.

Slync automates repetitive shipping and logistics processes by connecting different systems and processing data. It uses various data sources, such as enterprise resource management and transport management systems, as well as email, PDFs, and spreadsheets to offer users collaboration tools and workflows based on their roles. The company then highlights critical information for users to help them manage their logistics efficiently.

Venture Today 👏

  • Dollar Investments into Chinese startups fell sharply in 2022, as geopolitical tensions with the US, Beijing's crackdown on tech companies, and restrictions due to Covid alarmed foreign investors.

Dollar Investments into Chinese startups declined from 39% in 2021 to just 19% last year, a trend that has accelerated over the last decade. In 2012, US investors accounted for a majority, making up 60% of all startup funding, but Chinese founders have increasingly turned to Renminbi funding in recent years. Founders (especially those in tech) have been less willing to take on dollar investments due to a push from the Chinese Government to develop startups internally while also being afraid of being subject to US sanctions in the future.

The change in investment strategy comes amidst a larger pullback in funding Chinese private equity and venture funds, with funding down from $95 billion in 2021 to just $14 billion last year. Singapore's Sovereign Fund GIC and Ontario Teachers' Pension Plan are two institutional investors who have majorly benefited from Chinese startups over the last two decades but are now rethinking their strategy.

Who's Raising?

  • Boston-based Link Ventures has just raised $150 million for its third fund, targeting early-stage technology companies, particularly focused on using data science and machine learning.

The amount raised from the third fund is 50% higher than the previous two funds raised by the firm. Link Ventures raised $100 million in 2019, targeting early-stage consumer internet startups, while the firm's first fund was launched shortly after it was founded in 2006. Link Ventures said that it has already made its first investment from the third fund, participating in payment protection company nsKnox's $17 million funding round.

Link Ventures has invested in over 40 startups, with successful portfolio investments like healthcare insurance marketplace Healthcare.com and digital auto refinancing focused Caribou. With its latest fund, Link ventures plan to deploy capital targeting startups focused on Deep Learning, Machine Learning, and Artificial Intelligence, joining a dozen other funds with the same ambitions.

Memes and Other Things

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