Are small VC firms stuck in the shadows?
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 🚨
✨NEW FEATURED ROLE✨
Copper: Rethinking the induction stove and making kitchen electrification more accessible than ever. Picture a fossil-free future, without sacrificing aesthetics.
| Senior Embedded Systems Engineer |
Infinite Machine: Envisioning the future of transportation beyond cars and into the realm of personal electric vehicles. Its first product, P1, is the ultimate tool for city navigation.
Reach out with any questions! All 174 open job postings are listed here.
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$59k
Total Amount Raised
1
Total Funding Rounds
$59k
Average Dollars per Round
$295k-$590k
Estimated Valuation Range
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
DEAL SIZES ON THE UP AND UP
The second half of 2024 saw pre-seed deal sizes shift upwards. The number of deals over $200k increased by 30% compared to the second half of 2023, from 398 to 519. The total number of deals for that period increased modestly as well by 6%.
Good Reads 📖
For the rushed reader …
Nine major players hauled in more than half of the $71 billion raised by US VCs in 2024, leaving smaller firms struggling to keep pace.
Nuclear company Deep Fission has partnered with data center developer Endeavour to bury small reactors a mile underground.
According to PitchBook, while Q3 saw a 37.6% drop in deal value across the industry, micromobility has been accelerating.
For the less rushed reader …
VC stands for “very concentrated”: The US venture capital landscape is looking more like a game of "survival of the fattest," with the number of active firms plunging by over 25% from its 2021 peak. Nine major players, including heavyweights like Andreessen Horowitz and General Catalyst, hauled in more than half of the $71 billion raised by US VCs in 2024, leaving smaller firms struggling to keep pace. Worse still, that $71 billion represents a seven-year low—less than two-fifths of what was raised in 2021. Risk-averse financial institutions are flocking to the Silicon Valley giants, while VCs that missed out on big returns during the low-interest rate boom are now feeling the squeeze, as IPOs and takeovers grind to a halt. While the titans are likely to weather the storm, it's the newer and smaller firms that are feeling the pinch the hardest, with many finding it tough to attract the capital they need to stay afloat. Looks like the venture capital scene is undergoing a fund-amental shift.
A pre-seed startup with a (hopefully not) explosive idea: One startup is digging deep into the future of energy. Nuclear company Deep Fission has partnered with data center developer Endeavour to bury small reactors a mile underground, using rock instead of concrete for protection. Two gigawatts of pressurized-water reactors will be placed in 30-inch boreholes, turning heat into steam and sending power to the surface via pipes. The goal: a compact, cost-efficient solution that could slash power costs to just five to seven cents per kilowatt-hour. After raising a $4 million pre-seed round in August, Deep Fission is eyeing a 2029 launch for its first reactor, though it still needs approval from the Nuclear Regulatory Commission. If successful, the company could join a growing wave of nuclear startups powering energy-hungry, AI-driven data centers. This breakthrough is anything but bore-ing.
Micromobility is scooting past the competition: Micromobility is zooming ahead, undeterred by the headwinds slowing down the broader mobility tech sector. According to PitchBook, while Q3 saw a 37.6% drop in deal value across the industry, micromobility has been accelerating, with its deal value growing nearly 40% over the past three quarters. Investors are flocking to electric scooters, e-bikes, and other urban-friendly vehicles, with companies like Zero Motorcycles and Sedemac Mechatronics securing $100 million each. While exits have been muted in 2024, there have been some bright spots, such as NXP’s $242.5 million acquisition of Avia Links and Axon’s $400 million buyout of Dedrone. As the rest of the sector hits the brakes, micromobility is clearly still riding high.
Fire Up the Pre-Seeds🔥
Just one pre-seed raise to report this past week:
SaaS
Hapnin - Another everything store?
Hapnin raised $59k at a $5.9 million pre-money valuation. While Hapnin is keeping their product very close to the chest, the startup is creating an internet marketplace that connects people around the world.
Outro🚪
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