Hey everyone. The tinkering continues. Welcome to my new newsletter, Startup Scout. The composition of this newsletter revolves around my interest in venture capital/startups, emerging trends, and crypto infrastructure. Every post will include the following:
Funding rounds - recent funding rounds I feel are worth highlighting.
Scouted Startups - a startup that I choose to identify and highlight.
Crypto Infrastructure News - relevant news that relates to any development towards the building of the web3 infrastructure (I will not go into token pricing or trading. I will go into relevant VC investments).
Venture Capital News - any relevant news happening in the VC/PE landscape.
Recommendations - podcasts, essays, Twitter threads, videos, infographics, etc.
NOTE: I imported all of you as subscribers from my other newsletter (which I will still be active on!). If you feel Startup Scout isn’t up your alley, feel free to unsubscribe, I will understand. I only felt comfortable transferring everyone over because 90% of you are friends and family.
Noticeable Funding Rounds This Week
Beam (Singapore) - Series B - $93,000,000 - Affirma Capital (lead investor)
Beam is a “micro-mobility” company that offers e-scooter rentals. Via the app, users are incentivized to park their scooters in pre-determined parking spots instead of parking the e-scooter randomly in the street, sidewalk, your front lawn, etc. Something that has caused a lot of friction with the uber and bird e-scooters. Beam also has a vision of the future where there are fewer cars and a larger demand for micro-mobility. From my perspective, they’re hedging a bet on the further inflation of fuel prices, stagnation in the EV space, and a (far too long) road map for autonomous vehicles. Not to mention the serious future demand for finding more creative ways to incentivize less congestion and pollution in our cities. They’re currently in Australia, Malaysia, New Zealand, South Korea, Thailand, and Taiwan. They’re HQ’d in Singapore. They’ve raised a total of $126.4M over three rounds. They’ve had five lead investors, including Affirma Capital, Hana Financial, InnoVen Capital, Class 5 Global, and Sequoia Capital India (who has participated in all three rounds).
Varos (San Francisco) - Seed - $4,100,000 - Ibex Investors (lead investor)
Varos is a data sharing and planning platform that helps eCommerce and SaaS companies compare their KPIs to their peers. Varos is trying to break the traditional taboos around cross-company collaboration by helping users understand their own performance vs direct competitors by unlocking data currently stored in different silos. They have a growing database of 250+ users already automatically feeding industry data to their platform. In return, those companies can see how they stack up against others in their space. Varos plans to expand beyond eCommerce and SaaS and into finance. All the data is crowdsourced via API integrations, pulled in real-time, and requires no customer maintenance. To grow their database, Varos is currently offering their product for free. They state on their website that they do plan on charging soon, but anyone who opts in now can get “grandfathered into current functionality at today’s pricing forever.” Varos is also an alum of Y Combinator, and other investors include Tom Glocer (co-founder of Thomas Reuters), Andy Dunn (co-founder of Bonobos), Amol Deshpande (co-founder of Farmers Business Network), and Bob Moore (CEO of Crossbeam).
Gesund.ai (Boston) - Seed - $2,000,000 - 500 Startups (lead investor)
Gesund.ai is an MLOps (machine learning ops) company focused on streamlining the clinical validation of AI solutions. They believe medical AI is lagging due to a lack of compliant, scalable, and ML-friendly data access. Gesund.ai provides privacy-centered access to diverse yet standardized medical data sources. They also provide an analytical toolbox that fosters clinical validation, regulatory clearance, and effective marketing. It works in the following 1) Model owner shares clinical study with Gesund for the curation of appropriate datasets and uploads their model onto the Gesund federated validation platform, which resides on the hospital premise or private cloud; 2) the model runs against a previously unseen validation data set that has been curated on the hospital side; 3) model accuracy metrics are produced and displayed on the Gesund.ai platform for further examination with respect to patient characteristics, scenario analyses, and stress testing; 4) the model insights are exported into a report for the model owner to supplement their regulatory submission. Basically, Gesund.ai is a Contract Research Organization (CRO) for AI companies developing medical algorithms, or academics testing their own models. They’re more of a machine learning company than an algorithm company. Gesund.ai already has 30 clients in their sales pipeline and revenue expected this quarter. This round puts them at a $4,000,000 total raise (they raised $2M in a pre-seed round also led by 500 startups).
Scouted
Fast Break Labs (San Francisco)
Latest Funding: Seed (2/23/22)
Total Funding Amount: $6,000,000
Industry: web3, P2E
Notable Investors:
Pantera Capital
Patron
Solana Ventures
South Park Commons
Collab+Currency
Blue Pool Capital
Soma Capital
Joseph Tsai’s (owner of the Brooklyn Nets) family office
Marc Merrill (Cofounder, Riot Games)
Thomas Vu (Head of Creative, Riot Games)
John Robinson (President, COO, 100Thieves)
Ryan Spoon (COO, Sorare)
Larry Cermak (VP of Research, The Block)
Fast Break Labs is a Web3 play-to-earn gaming startup founded by Charles Du and John Wu (former Meta employees). They recently raised a $6M seed round led by the renounced crypto fund, Pantera Capital, and early-stage VC firm, Patron. Fast Break Labs is currently building out the Virtual Basketball Association, an online fantasy sports league that lets gamers manage their own basketball team by building a roster and then competing against other virtual teams for prizes. The game will be built on the Solana Blockchain and will have similar economics to other play-to-earn games. Each player on the user’s team will be an NFT delivered in the forms of “packs” similar to Top Shots player packs. The founders want to create an experience that allows the users to shape the game's direction and accrue economic benefits. Fast Break Labs plans to launch the first pack of NFTs in late March for the first 2,000 players. Pricing has not yet been disclosed.
Crypto Infrastructure News
Zynga exec sees ‘huge opportunity for NFT Integration into traditional gaming: “I think if you’re in the gaming business and you’re not looking at blockchain integration, you might be missing a huge opportunity,” - Matt Wolf, VP of blockchain gaming at Zynga. Zynga plans to roll out a blockchain-based game in 2022. Per DappRadar (crypto data provider), the blockchain gaming industry generated more than $4B in 2021
Investors can now buy home equity slices via fractionalized NFTs: Real estate startup, Vesta Equity, is creating a new marketplace that joins a growing list of startups trying to incorporate real-life cases for NFTs. The fractionalized NFTs are packaged as a security and registered with the SEC. They built this NFT marketplace on the Algorand blockchain. “Imagine a world where, with a few clicks of your mouse, you can access the entire accumulated value of the equity in your home without incurring debt or selling and moving” - Michael Carpentier, CEO.
Celsius joins Maple to lend to crypto-institutions: Digital asset lending platform Celsius has become the first pool delegate from the centralized finance market to deploy a crypto-centric lending service on Maple Finance, utilizing the latter’s smart contract and blockchain infrastructure a $30M pool to institutional investors. In addition, the intro of wrapped Ether (wETH) is set to complement the existing accessibility to trade Circle’s native stablecoin, USD Coin (USDC), enabling investors to utilize the asset across an array of trading components, including staking, lending, and borrowing.
Venture Capital News
Cultivated salmon maker startup, Wildtype, has raised a $100m Series B at a near $450M valuation. Plant-based meat has become synonymous with processed foods like burgers, sausages, and nuggets. Still, up-and-coming cultivated meat startups are banking on premium products that justify the high cost of production (aka the Tesla strategy). L Catterton led the round alongside Leonardo DiCaprio, Bezos Expeditions, and Temasek.
Silver Lake, a global technology investment firm, backs New Zealand Rugby. Silver lake has agreed to pay $134mUSD for a stake of up to 8.58% in NZR CommercialCo - which will hold all the revenue-generating activities of New Zealand Rugby, including the All Blacks brand. This deal now values the company at ~$2.3bUSD. Silver Lake has previously invested in Man City Football Club owner City Football Group and owns a stake in the UFC.
As IPOS and SPACs freeze, secondary deals have been heating up. Companies have been incentivized to stay private longer with the growing unicorn count (over 1,000 this month). This has resulted in an appetite for secondary shares from investors - in which investors buy secondhand equity stakes from early backers, founders, and employees.
Recommendations
Podcast: Acquired: Ho Nam from Altos Ventures - A different approach to VC
One of my favorite interviews when it comes to venture capital. Ho Nam is like a combination of Warren Buffet, Sequoia Capital, and Andreessen Horowitz. His interview taught me to think like an owner and buy for keeps, a strategy usually echoed in public investing and not so much in venture capital. This mindset helps him choose more winners in an industry where it’s hard to find ‘em. His investment story on Roblox was eye-opening.
Reading: The Psychology of Human Misjudgment - Speech by Charles T. Munger at Harvard law. - This speech is a crutch for me. I regularly revisit it.
Twitter Thread: I appreciate Jason Choi’s (Spartan Capital) long-term view on the decentralized network industry. In the end, whether it’s web2 or web3, the products and networks that last are the ones that are truly great and solve real problems for consumers and industries. Click on the tweet below to access the rest of the thread:
