Hey there! While Facebook marks its 20th anniversary and Elon Musk drums up excitement for his latest venture xAI, we've rounded up some updates from the past fortnight just for you. Subscribe, and let's dive in!

🔥 LPs are raising the stakes when it comes to backing VC

One of the key trends this year is the increasing interest among LPs, which will be amplified by elevated expectations regarding the skills and reputations of GPs. We've recently highlighted this shift, and now PitchBooks’ latest study also notes this trend. Although the study primarily delves into the US market, its insights resonate across the pond, in Europe.

So, what's catching LPs' attention? 

✅ Active communication, transparency, unique perspectives, access to valuable networks, and relevant industry expertise

⛔️ Fund size inflation without a solid rationale, straying from the core strategy

🔔 How managers navigated the 2021 market frenzy

US VC fundraising in Q1-Q3 2024 may surpass 2023's quarterly levels slightly but remains below 2022's. (Image: PitchBook)

For an in-depth analysis, refer to the PitchBook report.

🔥 While a fund manager's brand remains crucial, LPs are widening their scope in 2024

Great question, and we believe the answer is "definitely not the only one." (Image: LinkedIn)

We're optimistic about the continued expansion of the venture capital landscape. Furthermore, smaller and emerging VC firms often demonstrate remarkable efficiency. SPI Research by StepStone underscores this, showing that smaller funds, those under $500 million, often outperform their larger counterparts.

US VCs performance quartiles by cohort size, 2001–2020 vintages. (Image: SPI Research by StepStone)

For an in-depth analysis, refer to the StepStone report.

🔥 European technology saw an influx of over €1 billion poured in the first week of February

Tech.eu analysts, renowned for their eagle-eyed tracking of European deals, reported this substantial figure. Spain and Italy emerged as the frontrunners.

While impressive, this figure dives from January's peak, dropping nearly 80%. Still, keep in mind the big picture: European tech companies raised a staggering €16.7 billion in January alone across 326 transactions. That's a major jump from January'23's €4.7 billion haul, and the year-to-year momentum is on an upward trajectory.

For an in-depth analysis, refer to the Tech.eu report.

🔥 While the AI hype steals the spotlight, don't count out quantum technologies. They're quietly gearing up for a resurgence in 2024

"Venture investments in quantum technology reached a high of over $2 billion in 2022, indicating strong investor confidence in this emergent market. However, by 2023, this investment decreased by approximately 50%, prompting discussions of a 'quantum winter.' In reality, industry experts refute the notion of a quantum winter, suggesting that the decline aligns with overall macro venture capital trends and does not reflect diminishing faith in quantum’s potential." This insight comes from a recent study bearing the suggestive title of the first chapter: "No Quantum Winter, Just A Bit Colder."

Europe bucks the trend, with an increase (a modest 3%, but still) in venture investments in quantum tech last year, contrasting with declines in Asia-Pacific and the US — 17% and 80%, respectively. 

Image: The Quantum Insider

Moreover, take a peek at the quantum computing hubs worldwide. You'll see a vibrant cluster spanning North America and Europe, with hotspots in the Netherlands, Switzerland, the UK, Finland, and Poland. And there's more on the horizon, particularly in the UK, where £2.5 billion is now on the table for quantum technology development over the next decade.

For an in-depth analysis, refer to the IQM, OpenOcean, and Lakestar report.

Cover image: Unsplash