Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 52)

Episode 45


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Top startups news to follow this week:

1. On February 4, 2022, the U.S. House of Representatives passed the America COMPETES Act to expand immigration opportunities for foreign-born scientists and engineers. If retained during negotiations with the Senate, the measures in the bill could become the most significant on legal immigration to pass Congress in more than 30 years.

House Speaker Nancy Pelosi, said the bill “will ensure that America is preeminent in manufacturing, innovation and economic strength and can outcompete any nation.”

House Science Committee Chair Eddie Bernice Johnson, D-Texas, told NPR that a major federal infusion in research is badly overdue — especially to help the U.S. go toe-to-toe with China.

“We’ve just got to compete. And we’ve got to hopefully feel like we’re a little step ahead. And that’s really a big goal,” Johnson told NPR. “Because as you know, our society is very different in the kind of freedom versus communism type of behaviors.”

The bill has a number of provisions, including $52 billion to make chips, $45 billion to improve supply chains for critical items and $160 billion for scientific research and innovation.

Johnson said the legislation was also aimed at developing talent in the U.S. and fostering innovations in government labs that private companies could tap into for future products. Much of the research pieces in the bill, which has been in the works for years, included input from a range of private industry, academic experts and scientists who argue the U.S. needs a long-term commitment to seeding future breakthroughs that will prevent more jobs and manufacturing from moving overseas.

2.For Black-led startups, the lack of diversity in venture capital can pose a hurdle to access funding. The Jumpstart Nova fund, launched in 2021 to invest exclusively in Black health-tech firms, has raised $55 million from investors including Eli Lilly, HCA Healthcare and Bank of America.

Dr. Derrell Porter knew he had a good idea: a company that provides a platform to help researchers develop and commercialize gene and cell therapies.

“Academic medical centers and scientific innovators — they’re not pharmaceutical companies. They tend to look for partners to help finish the development of their programs,” Porter told CNBC, who founded Cellevolve to help make it easier for those researchers to connect with biotech companies.

Getting start-up off the ground meant making his own connection with financial backers, but his timing was bad. He began talking to investors about Cellevolve in March 2020, on the eve of the pandemic shutdown. 

When things reopened, Porter found that getting venture capitalists to invest was about more than buying into an idea.  

“They’re really making a bet on you as the entrepreneur, and therefore it’s a profoundly personal decision,” said Porter, who holds a medical degree from University of Pennsylvania Medical School and an MBA from The Wharton School. He noted, “being different or in the situation where the investor may not see themselves in you, or may not find a way to connect, that makes it harder to find capital.”

The venture capital industry is among the least diverse in finance. Nearly eight out of 10 VC investment partners in 2020 were white, 15% Asian and just 3% Black, according to the VC Human Capital Survey conducted by Deloitte, in conjunction with the National Venture Capital Association and Venture Forward.

3. Employment grows at a much faster rate at venture capital-backed startup companies than other private-sector firms⁠—roughly eight times faster, a new report finds.

The analysis of employment data examines “employment dynamics” of more than 67,000 U.S. companies that received venture capital (VC) investment during the period between 1970 and 2020. It was conducted by researchers at the Kenan Institute of Private Enterprise and the National Venture Capital Association (NVCA).

“The annualized growth rate of employment at VC-backed companies in our dataset between 1990 and 2020 is 8.2%,” the report’s executive summary reads.  “For total private sector employment, the growth rate between January 1990 and February 2020 is just 1.1

4. Blockchain startups grow as global VC funding generated $25.2B in 2021.

Last year was impressive for blockchain startups, as research from CB Insights found that venture capital funding reached new heights during every quarter of 2021. According to CB Insights’ “State Of Blockchain 2021” report, $25.2 billion worth of venture capital funding went to global blockchain startups last year, demonstrating a 713% increase from $3.1 billion in 2020.

The report also found that the United States led the greatest amount of funding deals in Q4 of last year, generating $6.26 billion for 157 deals. The document notes that global growth was driven by increasing consumer and institutional demand for crypto-related products and services. 

Chris Bendtsen, a senior analyst at CB Insights, told Cointelegraph that CB Insights’ report contains data aggregated from private marketing funding from over 3,000 blockchain and crypto companies that the firm regularly tracks. Bendtsen further explained that while the title of the report references blockchain, this serves as an overarching category that includes cryptocurrency, nonfungible tokens (NFT), enterprise blockchain and decentralized finance (DeFi). Bendtsen pointed out that the majority of VC funding mentioned throughout the report was allocated to crypto-focused startups. The report states:

“Over $100M mega-rounds (worth $100m+) were the driving force behind blockchain’s record funding year. The 59 mega-rounds in 2021 accounted for just 5% of total deals but 60% of total funding. The biggest mega-round deals went to crypto exchanges, brokerages, NFTs, gaming, and payments.”

According to the report, $1 out of every $4 worth of funding went to crypto exchanges and brokerages, which also equates to a quarter of all global blockchain funding in 2021. Bendtsen remarked that while the biggest deals went to major crypto exchanges such as FTX — which ranked as the second-largest equity deal for brokerages and exchanges in Q4 of 2021 — funding for country-specific exchanges has also been on the rise. 

For instance, CoinSwitch Kuber, one of the largest crypto trading platforms in India, ranked No. 4 for top equality deals for brokerages and exchanges in Q4 of 2021, generating over $260 million in its recent Series C funding round. “Based on these findings, it’s become evident that we are seeing the globalization of crypto, as more country-specific exchanges are raising impressive rounds,” said Bendtsen.

5. Partech Shaker, the innovation division of the Paris-based VC firm Partech, has launched an accelerator program christened Chapter54 to help European startups launch in African markets. The accelerator will take in 10 technology scaleups annually over the next four years for the Chapter54 program, which will last up to eight months. Application for the inaugural cohort will open next month, and successful startups will begin the acceleration journey in April.

Chapter54 will be funded to a tune of $5.7 million (€5 million) by the KfW Development Bank on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). “Companies from all sectors are welcome – but they must have business experience, be registered in a European country and active in two European countries, and have a solid financial foundation and regular income,” said KfW. Vincent Previ, the managing director of Chapter54, told TechCrunch that startups will be taken through several preparation stages, including mentorship programs with founders running successful enterprises across the continent, and with C-suite tech or startup executives.

“We have a very good knowledge of the European tech ecosystem because we are one of the most prominent investors in European tech. We are now a major investor in African tech, and we have the capacity to run innovative projects through Partech Shaker… From KfW’s view, we were a good player to run this acceleration program,” said Previ.

6. ICON, which creates homes using 3D printing, has raised an additional $185 million in a round led by Tiger Global Management, TechCrunch has learned exclusively. The financing is said to be an extension of ICON’s $207 million Series B that was announced last August.

While the Austin-based company confirmed the latest raise, it declined to comment on its valuation or provide further details. However, sources familiar with the deal who wish to remain anonymous told TechCrunch that ICON’s valuation “is now approaching $2 billion” and that some existing investors put more money into the company. Previous backers include Norwest Venture Partners, 8VC, Bjarke Ingels Group (BIG), BOND, Citi Crosstimbers, Ensemble, Fifth Wall, LENx, Moderne Ventures and Oakhouse Partners, among others. It is not clear which of those investors also participated in this extension. With the latest financing, ICON has now raised a total of $451 million in equity.

ICON was founded in late 2017 and launched during SXSW in March 2018 with the first permitted 3D-printed home in the U.S. That 350-square-foot house took about 48 hours (at 25% speed) to print. ICON purposely chose concrete as a material because, as co-founder and CEO Jason Ballard put it, “It’s one of the most resilient materials on Earth.”

Looking for Funding?

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7. This UK startup got $9M so you’ll pay it to shrink your household bills

The UK’s cost of living crisis has been making grim headlines for months — with no respite in sight. Just this week, newspapers reported that inflation had hit 5.5%, a 30-year high, further pushing up prices for everyday essentials like food. Worse is yet to come as an energy price cap will end in April, when bills are projected to rise by more than 50%. The poorest households describe a stark choice — between ‘heating or eating’. Into this grim maelstrom a new London-based startup, called Nous, is hoping to throw households a life-raft by offering a free personalized report that explains how price rises will affect their costs and gives advice on how to adapt to inflation.

Nous, which is pronounced to rhyme with ‘house’, talks in terms of building an “autopilot” for routine household decisions — which spans and scans energy, insurance, mortgages, broadband and other subscription services to monitor activity and steer households onto better deals.  The startup projects that its future subscription service will be able to save a “typical” household more than £1,000 a year. (Its own service pricing would of course need to be set well below that to convince hard hit consumers to buy in.)

8. OnlineDoctor, a leaving teledermatology provider, has acquired German-startup A.S.S.I.S.T – developer of AI for dermatology.

The startup is developing a prototype with a diagnostic accuracy of over 85% for 30 skin diseases. This new acquisition deal is part of Switzerland-based OnlineDoctor’s strategy to bring the world’s first AI-supported medical product in teledermatology to market maturity.

Founded in 2016 by dermatologist Dr. Paul Scheidegger and the two health business experts Dr. Tobias Wolf and Dr. Philipp S. F. Wustrow, OnlineDoctor is one of Europe’s leading providers of teledermatology. The company is currently active in Switzerland, Germany and Austria, working with around 600 dermatologists, used by over 300 pharmacies and hospitals in Switzerland, and cooperating with over 40 health insurance companies in Germany. 

Telemedicine is the latest innovation in the healthcare sector – aiming to improve patient experience and reduce the strain on health care providers and systems. Teledermatology is a niche sector within this, and one that OnlineDoctor has been able to grow quickly in. 

In Germany, patients wait approximately 35 days for an appointment in a dermatological practice. Via the OnlineDoctor platform, people with a skin disease can get quick help from dermatologists in their area. They answer questions about the skin problem, upload photos of the affected part of the body and choose a doctor. Within an average of seven hours, they receive a written diagnosis and specific treatment recommendations. In about 15% of cases, the dermatologist will recommend an in-person visit – massively reducing pressure on doctors. So far, more than 70k people affected have been helped.

9.German startup Liefergrün secures €3 million to roll out zero-emission delivery service across Europe.

Sustainability-focused last-mile shipping platform, Liefergrün, has just closed a €3 million funding round. The funding was led by SpeedInvest with participation from Norrsken VC.

Founded in Münster in 2017, Liefergrün has a vision to enable guilt-free online shopping by reducing the environmental impact of deliveries. As a result, it is committed to creating a fair, social, and emissions-free delivery experience with the mantra ‘we respect your shopping’.  Liefergrün delivers in freely selectable time windows and with 24/7 real-time tracking. Return deliveries are also able to be scheduled and are fully sustainable. Already present in 30 cities across Germany, the startup uses a fleet of cargo bikes and electric vehicles based at scores of micro-distribution hubs to enable emission-free delivery of goods bought online to consumers.   The young startup works with the likes of Adidas, Dyson and Every to provide a range of services including two hour and next day delivery which customers can track in real-time using an app.  

10. Denmark-based FieldSense has just raised €2.9 million for its tech that is providing farmers with actionable insights on local microclimatic conditions. The funding was led by Danish Agro, with Rockstart as co-investor alongside Pajbjergfonden.

Today, farming has gone digital. Farmers are surrounded by data from a variety of sources, utilizing this data effectively can have a massive positive impact on farmers everyday life. One thing that also massively impacts farmers everyday life is the weather. It impacts everything from harvesting to fertilising, to animal management and everything in between. 

Founded in 2015, FieldSense launched its agtech weather services in 2018. The startup provides hyper-local weather information and forecasts to help farmers monitor and act upon changes in local, microclimatic conditions. Based on weather data from in-field, solar-powered weather stations, the Danish agtech company creates user-friendly tools for farmers to help them in various important decisions. The FieldSense weather station is tailored for agro-purposes, accompanied by a farming-oriented and intuitive app. 

Every day, FieldSense collects more than 2 million weather measurements from close to 16.000 sensors that farmers can use in their day-to-day planning and operations –  a real game-changer for the industry. 

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