Is pre-seed activity heating up for December?
Necessary Nuggets
Happy Wednesday, and happy Thanksgiving! Don’t be a turkey, and keep reading.
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Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$23.8M
Total Amount Raised
17
Total Funding Rounds
$1.4M
Average Dollars per Round
$7.0M-$14.0M
Estimated Valuation Range
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
THE HOLIDAY VENTURE SEASON
Across the board, December should be an exciting month for venture deals. According to Carta data from 2018 to 2023, December was the month with the highest percent of rounds signed for five out of the six years.
Good Reads 📖
For the rushed reader …
Cleo Capital, the early-stage VC firm behind companies like Groq and Ellevest, is launching a 12-week cybersecurity accelerator aimed at tackling the global cybercrime problem.
According to Crunchbase, venture capital has undergone a valuation shift in recent years, driven by the rapid growth of SaaS companies.
The Biden administration is giving Rivian a $6.57 billion loan to fund its EV factory in Georgia, aimed at scaling up production of its more affordable models.
For the less rushed reader …
CRYSTAL CLEO: A new accelerator is in town to ward off the cyber bandits. Cleo Capital, the early-stage VC firm behind companies like Groq and Ellevest, is launching a 12-week cybersecurity accelerator aimed at tackling the global cybercrime problem. The program, which will invest $250,000 for 7% equity, is seeking pre-seed and seed-stage startups worldwide, with a focus on consumer security, defense, and dev tools. With cybersecurity losses in the U.S. topping $12.5 billion in 2023, Cleo’s founder, Sarah Kunst, sees a massive opportunity for innovation in a space traditionally dominated by enterprise solutions. The accelerator aims to find startups building tools that protect individuals, from better authentication methods to anti-scam apps, while balancing user privacy. May outages never crowd-strike the world again.
GROWTH SPURTS: Was “The Tortoise and the Hare” a cover story for deep tech and SaaS? According to Crunchbase, venture capital has undergone a valuation shift in recent years, driven by the rapid growth of SaaS companies. In the past, VCs succeeded by identifying emerging sectors with long-term value, such as online marketplaces in the late 90s or the space industry in the early 2000s. However, the scalability of SaaS models, which can quickly scale through online advertising, led to a new "virtuous loop" where capital was deployed faster, and growth rates became the primary indicator of success. This has changed the way VCs evaluate investments, with a growing focus on ARR multiples and short-term growth. In Crunchbase’s analysis, that may be at the expense of longer-term, research-intensive ventures, and the shift has created challenges for deep tech startups, which often require years of R&D before seeing meaningful revenue. Deep tech might have to speed up its slow and steady pace to make it to the finish line.
ROLLING ON THE RIVIAN: Rivian is getting another shot at a road to recovery. Hoping to overcome unsold inventory and high cash burn, the Biden administration is giving Rivian a $6.57 billion loan to fund its EV factory in Georgia, aimed at scaling up production of its more affordable models. This comes after a joint investment from Volkswagen, but the road ahead is still bumpy. Rivian has already burned through $19 billion since its 2021 IPO. With an ambitious plan to build a 400,000-unit plant by 2028, the company hopes to turn the tide with its new budget-friendly R2 and R3 models. However, challenges loom, like potential EV tax credit cuts under the Trump administration and continuing cash burn. Once a market darling with a $146 billion valuation, Rivian’s stock has plummeted over 90% from its IPO peak. Will this new cash be the spark Rivian needs?
Fire Up the Pre-Seeds🔥
It was a big week for pre-seed raises. Sit down and get comfortable for this exciting list:
healthtech
SecretBox - Blue pill or red pill?
SecretBox raised funding at a $12 million pre-money valuation. SecretBox is developing an AI-powered smart pill bottle to address critical issues like drug misuse, non-compliance, and prescription control.
Hippos Exoskeleton - Addressing a critical knee-d.
Hippos Exoskeleton raised $642k co-led by Possible Ventures and Silicon Roundabout Ventures. Hippos Exoskeleton is creating a smart knee brace that automatically inflates to prevent ACL tears and other injuries.
Jimini Health - Out of the computer and into the clinic.
Jimini Health raised $8 million, including investments from Zetta Venture Partners, LionBird, PsyMed, BoxGroup, Arkitekt Ventures, SCB, and others. Jimini Health is developing a mental healthcare platform using a unique, clinician-led model, augmented by a supervised AI therapist assistant.
Fintech
Ololand.ai - Making investments sing, “Oo l(ai) l(ai).”
Ololand.ai raised $1 million at a $9 million pre-money valuation. Targeted at investment banks and private equity firms, Ololand.ai is building a platform driven by autonomous AI agents to unlock efficiency and additional insights when evaluating investment opportunities.
edtech
Lingawa - A lot more polyglots.
Lingawa raised $1.1 million from notable investors, including Zrosk, WEAV Capital, Kaleo Ventures, Voltron Capital, Techstars, and Dara Treseder, CMO of Autodesk and ex-CMO of Peloton. Lingawa is creating a platform for learning African languages, incorporating LLMs tailored to African languages.
SaaS
Sign AI - A good sign for communication.
Sign AI raised funding from Mudita Venture Partners. Sign AI is building an AI-powered tool to bridge the gap between deaf and hearing individuals with real-time virtual sign language interpretation.
Outro🚪
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