Startup Monday Issue: 10 news to follow this week in the global startup ecosystem (Issue 38–3 May 2021)

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  1. San Jose, California-based cybersecurity startup Vectra AI today announced it has raised $130 million in a funding round that values the company at $1.2 billion. Vectra says the investment will fuel the company’s growth through expansion into new markets and countries.

According to Markets and Markets, the security orchestration, automation, and response (SOAR) segment is expected to reach $1.68 billion in value this year, driven by a rise in security breaches and incidents and the rapid deployment and development of cloud-based solutions. Data breaches exposed 4.1 billion records in the first half of 2019, Risk Based Security found. This may be why 68% of business leaders in a recent Accenture survey said they feel their cybersecurity risks are increasing.

2. Per a CB Insights compilation of Q1 2021 fintech venture capital data from around the world, the first three months of the year were the most valuable period for fintech investing, ever. Somewhat shockingly, the first quarter beat the infamous second quarter of 2018, when Ant Group raised a $14 billion round, so skewing the category’s longitudinal data that some analyst groups simply discount it for analytical purposes.

It wasn’t necessary this time: The 614 tracked fintech deals in Q1 were worth a total of $22.8 billion, per the report, enough to set an all-time high, Ant Group be damned. Per CB Insights, the quarter’s fintech VC deal volume rose a modest 15% compared to the year-ago quarter, while VC dollar volume in the sector shot 98% higher over the same interval.

3. Social media influencers have enormous power to set trends, create overnight sensations and broadly define what’s cool. Josh Richards, a 19-year-old determined to be the world’s first influencer billionaire, isn’t shy about flexing that clout. Unsatisfied with simply promoting brands on social media, Richards is now focused on buying stakes in startups — and then making them popular with his 25 million TikTok followers.

Richards teamed up with fellow Gen-Z TikTok stars Griffin Johnson and Noah Beck, and former Goldman Sachs investment banker Marshall Sandman, to launch Animal Capital, a $15 million venture capital firm focused on backing early-stage startups in the consumer, fintech, health and media sectors.

Animal Capital is explicitly pitching itself to investors as the first VC firm with access to more than 100 million engaged consumers — social media users who can be turned into crucial customers for startups. Not only do these influencers have their finger on the pulse of the culture, they say they help make the culture.

4. A $1 billion crypto fund could be on its way from Andreessen Horowitz. The VC firm is looking to raise a considerable sum to put towards crypto investments.

Building on its previous crypto involvement, VC firm Andreessen Horowitz is now reportedly gathering thunder for another fund, according to an article from the Financial Times, or FT.

“The new fund, Andreessen’s third that is focused on cryptocurrency investments, is aiming to raise between $800m and $1bn from investors, according to four people with knowledge of the process,” FT wrote on Friday.

The entity is active in the crypto and blockchain sector, and has invested in a number of projects. It plans to aim the new fund’s capital toward crypto industry projects and digital assets, FT reported.

5. CVS Health Corp. CVS, +0.04% said Thursday that it will launch CVS Health Ventures, a venture fund that invests in and partners with early-stage companies focused on making healthcare more accessible and affordable.

Starting with $100 million, the initial focus will be on tech-enabled and digital healthcare companies. CVS notes the investments it has already made through both the CVS and Aetna businesses, including Unite Us, a program that links healthcare and social service providers.

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6. Dutch-German growth capital firm Endeit Capital has raised a €250 million fund to invest in B-stage European startups. This is its third and largest investment fund, Endeit Capital III. The firm says it plans to support European scale-up companies that “lead to an accelerated digital transformation of the European society and economy and indeed the digital maturity of Europe.”

Endeit was a relatively early European investor, kicking off in 2006, and investing in 35 companies. It previously raised and invested €250 million through its first two funds, in the Benelux, DACH and Nordic regions.

7. After an unprecedented quarter of funding activity to start 2021, Chicago tech and startup companies continued their hot deal streak by raising more than $930 million in venture capital in April, according to data compiled by Chicago Inno.

April’s fundings were led by ActiveCampaign, which raised $240 million, and Clearcover, which raised $200 million.

According to analysis by Inno, Chicago startup funding over the first four months of 2021 has now eclipsed what local companies raised over the entirety of 2020. Data from PitchBook and the National Venture Capital Association released earlier this month showed that venture funding raised by Chicago companies in Q1 of 2021, which ended March 31, topped $2 billion. Now with an additional $930 million raised in April, Chicago startups have raised more than $2.9 billion in 2021, according to Inno’s analysis. Over the entirety of 2020, local companies raised $2.8 billion.

8. The Global Virtual Reality Market is expected to grow at a CAGR of around 44% from 2020 to 2027 and reach the market value of over US$ 56.2 Bn by 2027.

North America holds dominating market share for the global virtual reality market

North America is a significant region for the virtual reality market. It has also been a pioneer in adopting innovations, giving North America a competitive advantage over other regions. Furthermore, the region has the most startups focusing on bringing innovative VR technologies to various industries. According to Tracxn Technologies, for example, there are 951 Virtual Reality startups in the United States. Orbbec, JauntVR, Dreamscape, and Sandbox VR are a few examples. Dreamscape is developing immersive virtual reality entertainment that is location-based.

Asia Pacific, on the other hand, is expected to have the fastest growing CAGR during the forecast period. China has the largest market share in the region because it is the largest distributors of HMDs. Southeast Asian countries’ technological advancements are propelling the market’s growth even further.

9. A new map revealed by EIT Hub Israel, ISERD, and CQ Global has revealed that there are 912 Israeli companies in the European Union, responsible for employing 24,223 people. The data was collected over several months by a team of editors, analysts, and data sources from Start-up Nation Central and other online sources. It was presented during an event honoring the 25th anniversary of the establishment of business relations between the EU and Israel.

More than one-third of the companies belong to the information and software technology sector, with others focusing on the internet, telecommunications, biomedical, and cleantech sectors. Germany accounts for 240 companies (employing 3,135 Germans), and there are 183 in France (employing 1,985 people). If we include the UK — which technically left the EU in 2020 — these three countries account for 55% of all European workers at Israeli companies.

10. TechCrunch reports the Indian food delivery startup Zomato on Wednesday filed for an initial public offering, ushering a new era for tech unicorn startups in the world’s second-largest internet market after years of promising growth.

The 12-year-old Gurgaon-headquartered Indian startup, which counts Info Edge and Ant Group among its largest investors, plans to raise $1.1 billion from the IPO (about $1 billion from issuing new shares), it said in the filing to the local market regulator. The startup, which has businesses in 24 markets, intends to list on Indian stock exchanges NSE and BSE.

Zomato, which has raised more than $2.2 billion (according to research firm Tracxn), and was valued at $5.4 billion in its most recent fundraise round, said it may consider raising an additional $200 million ahead of public listing.

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