Jun 5, 2024
Kaley Ubellacker
Market Stirrings 🚩
Here's what the week looked like in pre-seed:
$16.3M
14
Data aggregated from proprietary research and Crunchbase; valuation estimate based on 10-20% ownership stake.
Good Reads 📖
For the rushed reader …
A U.S. appeals court in Atlanta suspended Fearless Fund’s grant program for Black-women-owned businesses, ruling in favor of a lawsuit claiming that the program is discriminatory.
WeWork has a new bankruptcy plan that includes fewer locations, fresh capital, and $4 billion in debt wiped.
According to EY’s latest Beyond Borders report, biotech is poised for growth, as the pharma industry hunts for innovation to replace $300 billion worth of products losing exclusivity.
For the less rushed reader …
FUND FEARS
Fearless Fund is facing new fears with a major setback from a U.S. federal court ruling. A U.S. appeals court in Atlanta suspended Fearless Fund’s grant program for Black-women-owned businesses, ruling in favor of a lawsuit claiming that the program is discriminatory. The lawsuit was filed last year by the American Alliance for Equal Rights, a group led by Edward Blum, who also led the case ending affirmative action in college admissions. The National Venture Capital Association filed a brief defending the Fearless Fund’s grant program as an important step toward creating equal opportunity in the industry. A study by Deloitte and Venture Forward showed that in 2022 only 2% of investment professionals in venture were Black women. The final decision could have huge implications for philanthropists, non-profits, and any organization seeking to give to underrepresented businesses. There’s a lot of work to be done to court the court and make grant programs appeal to a broader, more conservative audience.
CALLING ALL HOME DWELLERS
Is there still a “we” that’s co-working? WeWork has a new bankruptcy plan that includes fewer locations, fresh capital, and $4 billion in debt wiped. WeWork’s fate is tied to the mass office exodus, in which workers have fought against working in the office full-time. Nearly 20 percent of office space in the U.S. is vacant – and even 4 years after the pandemic peak in 2020, no one is interested in cleaning the cobwebs. The hope is that WeWork’s post-bankruptcy model will rightsize the company and make it profitable once again. WeWork is gambling that work-from-homers are getting lonely enough to turn co-working spaces’ empty desks into dollars. “Rapunzel, rapunzel, put up your hair and go to the office already,” says an incoming ad from WeWork, probably.
GROWING PHARMS
Biotech companies need more cash to buy-o more time and continue innovation in face of a patent cliff. According to EY’s latest Beyond Borders report, biotech is poised for growth, as the pharma industry hunts for innovation to replace $300 billion worth of products losing exclusivity. Financing is catching up, but accessing capital remains an issue for many biotech companies. EY estimates that almost a third of companies in the sector don’t have enough cash to sustain operations past one year. The good news is pharma has a record $1 trillion to deploy on new biotech innovation deals once the Federal Reserve lowers rates, which is a mid-term possibility. Add the pharma industry to the long list of people begging interest rates to drop.
Fire Up the Pre-Seeds🔥
Highlights from this week’s pre-seed raises:
Climatetech
Plural Energy - Blockchain bites of climate action The Problem
The current environment makes fundraising challenging, especially for small-scale renewable projects. The Tech: A blockchain financial platform for the clean energy transition that allows investors direct access to renewable energy investments. Recently Raised: $2.33 million in funding led by Necessary Ventures and Compound.Also Note: The first asset to go live for investment will be a portfolio of solar farms developed by Solaris.
FINtech
Light Frame - New tech for old industries The Problem
Current tech for financial services companies is generations behind modern standards.The Tech: A proprietary platform to deliver higher levels of autonomy, capability, intelligence, and ultimately innovation to Private Banks and Wealth Management firms. Recently Raised: $1.7 million in funding co-led by ATX Venture Partners and New Stack Ventures.Also Note: The company was launched by the founding executives of Alpian, Switzerland's first digital private bank.
Outro🚪
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Thanks for reading, and see you next week!
