Crossing the commercial valley of death ☠️
Necessary Nuggets
Happy Wednesday and Fourth of July Eve! 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 🚨
Virtue VC: Exclusively focused on pre-seed and seed healthcare founders. Searching for a highly ambitious individual dedicated to the next generation of healthcare companies and ready to double-down on the sector.
✨NEW FEATURED ROLE✨
Nevoya: First fully-electric trucking fleet in the United States, helping truckers trade gas-guzzling for environment-protecting. Get involved and tackle unsolved problems in the trucking industry.
Taro: Taro increases access to healthcare while reducing costs and physician burnout via direct primary care based health insurance.
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Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$10.4M
Total Amount Raised
12
Total Funding Rounds
$869k
Average Dollars per Round
$2.9M-$8.7M
Estimated Valuation Range
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
M&A STILL FINDING ITS WAY
Broadly speaking, M&A activity has yet to hit the heightened levels experienced in the first half of 2022. However, early-stage startups so far in 2024 are occupying an increasing share of the M&A pie, seeing a 10% increase from Q1 to Q2.
Good Reads 📖
For the rushed reader …
Rondo Energy is an example of one startup that may have discovered a new way to cross the funding valley – and it’s through philanthropic grants.
Founded by MIT alumnus Tim Heidel, early-stage startup VEIR is making headway on superconducting transmission lines that will enable higher power levels at much lower voltages.
Best known as a secondary investor, Industry Ventures has closed on a $900 million fund to invest in early-stage managers and startups.
For the less rushed reader …
CATALYTIC CLIMATE: Climate tech is a green monster, with companies in the sector eating cash just as fast as those in AI. Often dubbed the “commercial valley of death,” climate tech startups need large infusions of cash to reach a finished product they can sell to customers. Rondo Energy is an example of one startup that may have discovered a new way to cross the funding valley – and it’s through philanthropic grants. Catalyst, Breakthrough Energy Ventures’ growth-stage-focused organization, announced a deal to project finance three of Rondo’s thermal batteries, propelling it from prototype to possible prosperity. This could be a big win if more organizations accept it as a template and copy-and-paste for other early-stage startups. Venture investors might be too scared of the technical risk, and infrastructure investors might be too scared of first-of-its-kind systems – but philanthropists clearly eat danger for breakfast.
VEIRY BIG ADVANCEMENTS: MIT is on another power trip. Founded by MIT alumnus Tim Heidel, early-stage startup VEIR is making headway on superconducting transmission lines that will enable higher power levels at much lower voltages. The real innovation is in the cooling system, which passively cools the entire operation by running nitrogen through a vacuum-insulated pipe surrounding the cable. If you’re still not convinced how cool this technology is, get this: the lines can transport five to ten times the amount of power of conventional transmission lines, using the same footprint. The project is particularly timely given the need in the U.S. to more than double existing transmission capacity to reach 2035 climate goals. In fact, VEIR is aiming to have its first commercial-scale pilot ready by 2026. It appears the only decision left is deciding VEIR-oh-VEIR to operate it first.
SAY HELLO TO HYBRID: Backup has arrived. Best known as a secondary investor, Industry Ventures has closed on a $900 million fund to invest in early-stage managers and startups. The firm will pursue a hybrid strategy, which means it will make commitments to venture investors, support funding rounds for startups, and buy stakes in early-stage funds. The targets include a 40% allocation to emerging managers of early-stage funds, 40% directly into startups (typically Series B), and 20% to stakes in early-stage funds from institutional investors. Industry Ventures has expressed particular optimism about the rise of AI-enabled business models, having recently invested in robotics and enterprise software. Sounds like there’s a venture capital melting pot coming to a boil.
Fire Up the Pre-Seeds🔥
Notable pre-seed raises in …
ARTIFICIAL INTELLIGENCE
Freighmate.ai - Not a-freight to innovate
The Problem: Freight is a $200 billion industry running on the fumes of decades-old tech.
The Tech: An AI-powered freight management system that helps with tasks such as managing to-dos and documents.
Recently Raised: $650,000 in funding from Wischoff Ventures, led by New York investor Nichole Wischoff.
Also Note: The founders are entrenched in the space, coming from Amazon and logistics tech giant Flexport.
Upword - Knowledge in being a neat freak
The Problem: Knowledge is useless if it hasn’t been organized properly.
The Tech: A generative-AI-powered interface designed for research management that provides suggestions tailored to the user’s needs and leverages auto-tagging to automatically organize documents.
Recently Raised: $3M in funding including participation from Telefonica (Wayra X), Go Ahead Ventures, and Goodwater Capital.
Also Note: The tech integrates LLMs from OpenAI, Anthropic, and Google.
Outro🚪
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