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Sink or Swim
Startups Face Down Rounds, Autotech Ventures Raises $230 Million for Third Fund and CoreWeave Soars to the Clouds With its New Raise.
Adam from VC Brags
April 24, 2023
Welcome Shareholders,
In this daily edition of the Brags Newsletter, we’ll cover how startups are facing a rising tide of down rounds. Also, Autotech Ventures looks to Fuel Mobility Startups With its New Fund, and CoreWeave raises $221 million for its GPU-focused expansion.
So sit back, grab a snack, and enjoy!
Venture Today 👏
As the market downturn persists and investor cash becomes scarce, experts predict more startups will face financial strain, potentially leading to dreaded down rounds.
In late 2022, down rounds reached near five-year highs, with early 2023 data indicating that approximately 7.5% of all US venture funding rounds were down rounds. Prominent companies such as Stripe, Klarna Bank, and Snyk have experienced valuation cuts, while others like Blockchain.com are reportedly in discussions for similar adjustments.
Down rounds, which founders have diligently avoided due to their negative impact on company morale, valuation, and potential legal complications, are increasingly seen as inevitable by tech industry professionals as they erode paper wealth for both startups and venture capitalists. Despite cost-cutting and debt acquisition to postpone unfavorable fundraising, over 400 unicorn startups, or one-third of them, haven't raised new funding since 2021, which is challenging for the 94% of unprofitable tech unicorns that typically seek funds every one to two years.
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Who’s Raising?
Autotech Ventures, with its newly closed $230 million fund, aims to diversify beyond early-stage ground transportation startups and invest in promising automotive and mobility opportunities.
Prioritizing fintech, logistics, supply chain, and the circular economy, Autotech Ventures' third fund will support mobility-related startups from seed to Series C stages, with contributions from financial and corporate LPs like Allison Transmission, American Axle, Iochpe-Maxion, and Shell.
Autotech manages over $500 million and has invested in 40+ companies, including startups like DeepScale, Lyft, Frontier Car Group, Drover, Outdoorsy, Swvl, SpotHero, Xnor.ai, indie Semiconductor, and Volta Charging, with five of these companies going public.
Startup of the Day
NYC-based startup CoreWeave, initially an Ethereum mining venture, has raised $221 million as it evolves into a comprehensive cloud computing platform.
CoreWeave revealed a $221 million Series B funding round led by Magnetar Capital, featuring contributions from Nvidia, former GitHub CEO Nat Friedman, and ex-Apple executive Daniel Gross, with Magnetar providing $111 million and the rest divided among the other participants. This funding round, valuing CoreWeave at $2 billion pre-money and brining the total amount raised by the startup to $371 million, will facilitate its US data center expansion, including two new centers this year, adding to its existing five North American centers.
CoreWeave offers over a dozen Nvidia GPU cloud options, including H100s, A100s, A40s, and RTX A6000s, for applications such as AI, machine learning, visual effects, rendering, batch processing, and pixel streaming. Boasting industry-leading inference hardware capable of autoscaling within three seconds, CoreWeave also features Nvidia's HGX H100 server platform and differentiates itself through its accelerator program, providing participating companies with compute credits, discounts, and additional resources on the CoreWeave cloud.
Fresh Finds
Real-time data platform - Estuary Flow provides no-code data pipelines, batch/streaming support, and fast materialized views on the Gazette framework.
Streaming SQL & managed CDC - Efficient database capture, seamless backfills, real-time streaming, and powerful transformations with schema validation and testing support.
Collections, views, and connectors - Cloud storage of captured data, real-time fact tables, incremental processing, and pre-built connectors for ~50 endpoints with custom connector options.
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