Biweekly VC Insights by Uniborn #26

Inside: News from the VC industry and very hot news from Uniborn
Barbara Krassner
🇬🇪 Uniborn Team
4 min read

Hello everyone! The latest news is all about wars, and we sincerely hope you're reading this from a safe place. Amidst all the chaos, work can distract from intrusive thoughts, so we bring you a dose of captivating VC news of the past few days. Subscribe to get such a scoop on a regular basis.

🔥 Let's start with the venture capital powerhouses

A couple of weeks back, we embarked on a quest to pinpoint the ideal European cities for angels. Just to jog your memory, we found that the tried-and-true investment hubs include London, Paris, Berlin, Amsterdam, and Stockholm, while Zurich being probably the leader in terms of taxes, VC infrastructure, and standard of living. 

The other day, a fresh global ranking of startup ecosystems emerged. We didn't expect dramatic changes, and yes, San Francisco still reigns as the undisputed champion worldwide — not exactly a shocker. As much as 85% of the top 20 VC ecosystems come from the United States and Asia.

But what about Europe, you ask?

  • London also partakes in the global elite club, securing seventh place as the world's most advanced VC spot. Berlin is just a little behind, landing in the 16th position. That said, it's evident that Europe, as a whole, isn't as prominently represented on the world stage of matured ecosystems.
Image: PitchBook
Image: PitchBook
  • But when we talk about regions experiencing the most rapid growth, collectively, Europe and the US claim 65% of the coveted spots in the global top 20. This list features rising stars like Berlin, Madrid, Milan, Tallinn, and Vienna.
Image: PitchBook
Image: PitchBook
  • If you compound growth and development, you'll find that members of the top 50 list are scattered across the globe: 40% in North America, 32% in Asia, and 24% in Europe. 

Hop to the PitchBook report for more details.

🔥 As the next year ramps up, many unicorns may lose their horns

Morgan Stanley has a sad take on the current unicorn landscape. They claim that many of today's top unicorns don't quite measure up to the "rule of 40" — a rule that demands combined sales growth and profitability to surpass the 40% mark. And that the unicorn factory is currently operating at its slowest pace in the past two years. 

So it's anticipated that the market is due for a substantial revaluation, probably with a 50% decline. This could strike out around 300 of these unicorns, potentially erasing a staggering $1.1 trillion. As of now, the world boasts approximately 1,200 to 1,400 unicorns, with about half in the US. 

Hop to the Financial Times article for more details.

🔥 Despite the recession, angel investors aren't holding back

A recent report from Bethnal Green Ventures points out that only 27% of angel investors expect a slowdown in deal activity by the end of the year.

Even more encouraging is the statistic that highlights a growing trend in conscious investing. An impressive 81% of angels view founder diversity as a determining factor when making investment decisions. And a resounding 84% are inclined to back tech startups that benefit the planet.

Hop to the Bethnal Green Ventures analysis for more details.

🔥 We have set up a syndicate to invest in venture studios!

Thanks to the ingenious Max Pog, we've found an undervalued asset class with the highest historical return-to-risk ratio and the fastest path from entry to exit. And these are venture studios!

Startups created by top studios are doing as well as startups that have been accelerated by Y Combinator. Moreover, the traction of builders graduates is more predictable. They are able to deliver more than 50% IRR. And here's the kicker — their typical seed-stage valuation is still well below YC's current standard of $20 million. 

So keep an eye on our Foundation cartel, or better yet, join us on this adventure — we plan to invest over €10 million in leading builders and their spinoffs by 2025.

Big Startup Studios Research 2023. (Image: Max Pog) 
Big Startup Studios Research 2023. (Image: Max Pog) 

Hop to Dmitry Samoylovskikh's post for more details.

Cover image: Unsplash

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