New chips & new rules ✍️
Necessary Nuggets
Happy Wednesday! If you’re new here, welcome to Necessary Nuggets, your one-stop pre-seed shop. We deliver updates from Necessary Ventures and helpful tidbits on our little corner of the world. Every edition is also on our blog.
Jobortunities 🚨
Necessary Ventures: If you love this newsletter, we think you might like investing in what the world needs too. We have full-time and part-time opportunities to think early stage and have an impact on solving founders’ problems.
| Investor |
Taro: Taro increases access to healthcare while reducing costs and physician burnout via direct primary care based health insurance.
| Product Engineer |
Forage: Create a unified API that helps low-income Americans buy online groceries. It’s Stripe, but for Electronic Benefits Transfer.
Reach out with any questions! All 170 open job postings are listed here.
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$4M
Total Amount Raised
10
Total Funding Rounds
$444k
Average Dollars per Round
$2M-$4M
Estimated Valuation Range
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
VC Deal Activity in Climate Tech
Some might say VC funds have tons of energy right now. Carbon & emissions tech VC deal value in Q1 has already surpassed total deal value for all of 2020, at $8 billion and $5.2 billion respectively. If we assume activity remains steady for all four quarters in 2024, both deal value and deal count are on pace to substantially exceed activity from 2023.
Good Reads 📖
For the rushed reader …
The Biden administration is shelling out $285 million dollars to companies that will establish and operate a CHIPS Manufacturing USA institute for developing digital twins in the semiconductor industry.
Rivian’s recent cost-cutting measures haven’t gone far enough to reach profitability, with Rivian’s earnings report showing a $1.45 billion loss for Q1.
The White House issued new rules for AI safety in biotech demanding that DNA manufacturers screen purchases to flag sequences of concern and assess customer legitimacy.
For the less rushed reader …
CHIP OFF THE OLD BLOCK: If I was a journalist at a large tech publication, this would be my headline of the week: “United States Lay’s down big Chip plans and Ruffles digital twin research’s feathers.” The Biden administration is shelling out $285 million dollars to companies that will establish and operate a CHIPS Manufacturing USA institute for developing digital twins in the semiconductor industry. The digital twins will mimic real versions of chips and make it easier to test new processors, accelerating chip development and manufacturing. This is just one example of an initiative tied to the CHIPS Act passed in 2022 as a response to capital demand outpacing semiconductor manufacturing. The payoff potential is high – one recent report published by the Semiconductor Industry Association (in partnership with BCG) projects that the US will triple its semiconductor manufacturing capacity by 2032, which would be the largest growth rate in the world. Here’s to hoping the chips don’t get fried somewhere along that path.
WHAT IN CAR-NATION: Even with the recent push for semiconductor advancements, electric vehicle companies are still in for a ride. Rivian’s recent cost-cutting measures haven’t gone far enough to reach profitability, with Rivian’s earnings report showing a $1.45 billion loss for Q1. It brought in $1.2 billion in revenue for the period, but that still wasn’t enough. In hopes of further reducing capital expenditures, Rivian upgraded its Illinois factory to speed up and lower the cost of production, and the factory improvements will be put to the test soon for production of its next-generation SUV. As the electric car production race heats up, it’s still up for debate whether the US can successfully compete with Chinese manufacturers, especially compared to significantly cheaper EV costs overseas. In fact, the BYD Seagull costs just $10,000 in China. Can Rivian (or any other US-based EV company) rev its engines before it's too late?
GENES WITH SCREENS: The White House was busy this week, and it looks like it’s in its DNA to regulate biotech. The White House issued new rules for AI safety in biotech demanding that DNA manufacturers screen purchases to flag sequences of concern and assess customer legitimacy. Artificially generated DNA, advanced by recent progress in AI, enables researchers to develop specific sequences for a range of uses from enzymes that eat up plastics to antibodies that treat diseases. That also means there could one day be a dangerous actor that induces an entire pandemic by a virus made from scratch. The hope is that tightening screening measures will prevent these hypothetical scenarios. It’s hard to say now how the new rules might impact the speed of biotech innovation. The good news is bad actors won’t be wearing synthetic genes any time soon.
Fire Up the Pre-Seeds🔥
Notable pre-seed raises in …
fintech
Bleach Cyber - Squeaky clean security for startups
The Problem: Securing a business, especially a startup, is complicated and expensive.
The Tech: An “unapologetically simple” platform with powerful cybersecurity tools for small- and medium-sized companies.
Recently Raised: $2 million in funding including contributions from BlueWing Ventures, Everywhere VC, The Fund Austin, Rain Tree Roots Capital, Concept Ventures, Tynrose, and Acadian Capital Ventures.
Also Note: The platform has already attracted over 500 companies.
edtech
CyberNut - Teachers need teaching too
The Problem: There are a limited number of programs teaching digital safety in education, and data breaches pose a significant risk to students.
The Tech: An AI-powered, gamified security awareness training platform specifically designed for the K-12 education sector.
Recently Raised: $800k in funding including contributions from the Charter School Growth Fund, Avalanche VC, and the Transcend Network.
Also Note: CyberNut claims it’s already working with 50 school districts.
Outro🚪
Feel free to reply to this email with all questions, feedback, or comments. We’ll be iterating and curating the NVTC newsletter according to your interests.
Some last matters of business:
If you’re a technologist (engineer or product manager / designer with a technical background) join us on the NVTC LinkedIn group if you haven’t. We’d love to have you!
Sign up here if you’re interested in co-investing with Necessary.
If you’re a startup founder, we’d love to help where we can! Brex provides full-stack finance solutions for startups. Sign up via Necessary and get bonus points.
Thanks for reading, and see you next week!
© 2024 Necessary Ventures
San Francisco, California