Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 128- May 4)

Welcome to Startup Monday, my weekly newsletter that recaps the week in the global startup ecosystem. To have this newsletter emailed to you, you can sign up here.

Top startup news to follow this week:

1. Rev1 Ventures Launches $6MM Pre-Seed Fund Targeting Companies Underserved by Venture Capital

COLUMBUS, Ohio, May 1, 2024 /PRNewswire-PRWeb/ — Today, Rev1 Ventures , the venture studio that helps entrepreneurs and corporations accelerate innovation, is launching the Future Value Fund II (FVFII), a and seed-stage fund to support Central Ohio companies, focusing on the region’s technology startups that are underserved by venture capital. Rev1 Ventures is committing $3MM to the fund, which will be matched by the Ohio Department of Development State Small Business Credit Initiative (SSBCI) Ohio Early Stage Focus Fund Program. Rev1 Ventures is able to support this fund’s important mission by reinvesting returns generated through Rev1 Ventures’ previous investments in successful founders over the past decade that built great companies that have exited. Many of these companies, such as Updox and MentorcliQ, continue to operate and thrive in Central Ohio.$6MM pre-seed

The number of pre-seed funding rounds was down nearly 50% in 2023, and overall funding has been at its lowest level since 2018, according to Crunchbase. Undoubtedly, this decrease in financing is making it difficult for startups to scale and foster innovation. FVFII will support the immediate needs of these startups while contributing to the long-term sustainability of Central Ohio’s entrepreneurial ecosystem, including creating jobs and economic development locally.

“The capital gap is a real issue for growing the startup economy — and we have seen that even more so with pre-seed and seed-stage startups, where closing a meaningful round in a reasonable time frame can be incredibly challenging,” said Ryan Helon, EVP Investment Funds of Rev1 Ventures. “Rev1 is committed to supporting companies at the earliest stages of growth by providing founders access to funding, industry advisors, and connections that can help them succeed, and we continue to focus on helping make Ohio one of the best places to launch and scale great technology companies.”

2. Novo plans $200m investment in quantum computing startups

The Novo Holdings funds will focus on investment in companies developing quantum computing, sensing, and algorithms with applications in healthcare.

The Quantum Investments will be anchored with Seed Investments within the Novo Holding. Furthermore, a new dedicated sub-team will be established to foster quantum computing, sensing, and algorithms startups with healthcare applications.

Disruptive technologies can have a significant impact on the sector, one such example is artificial intelligence (AI). AI in healthcare is a booming market, GlobalData forecasts the in 2023. AI market generated approximately $93bn in sales

3. Chicago-based Hyde Park Venture Partners closes $98M Fund IV with two investments made so far

Midwest venture capital firms might always play catch-up to the coasts, but that’s not stopping some firms from pulling in nice-sized funds to support startups in their local ecosystems and overall region.

Despite being so-called fly-over cities according to investors focused on the coasts, the money continues to flow into this region. For example, Michigan’s Grand Ventures brought in $50 million in capital commitments last October. In 2023, Columbus-based Rev1 secured $30 million for its third Catalyst Fund aimed at life sciences.

Managing partners Greg Barnes and Guy Turner and partner Allison Lechnir lead the 12-year-old firm that invests in founders primarily in the Midwest and Toronto.

“We are very excited to be putting the new fund to work,” Barnes told TechCrunch. “Whenever we’re fundraising, it’s a good reminder of what our companies go through.”

The trio said it was a difficult time to raise capital last year, with Turner saying much of the challenge was “driven by the really fast-paced fundraising environment of the prior two years.”

“A lot of institutional LPs seem to be focused on existing managers,” Turner said. “That being said, we’re really happy with how the fundraise turned out for us and we were able to bring out a lot of great institutions that were new to our funds and to our firm. We’ve been building over the years and have seen larger funds become more institutionalized. That’s important for funds and geographies like ours.”

4. Belgium’s Aikido lands $17M Series A for its ‘no BS’ security platform aimed at developers

Developers have a problem. It used to be the case that only large enterprises needed to worry themselves with security, but today, every startup is capable of holding huge amounts of customer data. That means developers across the board have to worry about how secure their platform is, and they often find themselves grappling with complicated tools to manage security.

Now, , a small startup in Ghent, Belgium, thinks it has an answer to that dilemma: A no-nonsense, open source, developer-facing security platform. And the startup has just raised a $17 million Series A to further build out its product.

There have been security tools for three decades, but I think we’re the first where the buyer is the user. With other tools, the CSO is the buyer, but then some poor developer is the user. We are the ‘no BS’ platform,” Aikido’s founder and CTO, Willem Delbare, told TechCrunch.

Aikido’s main competitors tend to make tools that are aimed at larger enterprises than the people who actually have to deploy the tools. Enterprise platform Snyk, for example, used to resemble Aikido, but pivoted to larger firms some time ago. Other competitors include JIT, which caters to small-to-mid-market customers. In the middle market, you have Endor Labs and Guardrails, and then you have larger companies like Mend, Qwiet, Oxeye, Ox, Arnica and Apiiro.

Delbare told me that Aikido’s main differentiators are that it has a freemium model and it actively open sources new products. “This makes us flexible, fast and affordable,” he said.

The company also offers all-in-one security, flat pricing and a lot less notifications. “We only bother developers when something ‘real’ is wrong. We aggressively triage alerts to cut noise and false positives,” he said.

5. ‘Wallet-as-a-service’ startup Ansa raises $14 million with female investors leading the way

Notably, female investors — including Renegade Partners’ Renata Quintini, Wischoff Ventures’ Nichole Wischoff, Bain Capital’s Christina Melas-Kyriazi, BoxGroup’s Nimi Katragadda and former Affirm exec Silvija Martincevic — contributed 95.6% to the Series A round, the company said.

Founded in 2022 by former Adyen product manager Sophia Goldberg and ex-Affirm software engineer JT Cho, San Francisco-based Ansa is building what it describes as a white-labeled digital wallet infrastructure to help businesses process small payments and offset high credit card fees for smaller transactions.

Or as Goldberg describes it, Ansa is building a “wallet-as-a-service,” or embedded customer balances to let any merchant launch a branded flexible payment instrument.

That can look like the Starbucks in-app payment experience where a customer loads funds. It can also allow a merchant to fund with incentives or refunds. Ansa claims that by using its API-first platform, a merchant can create a wallet “within weeks rather than quarters.”

“Branded customer wallets enable merchants to offer a payment solution which fits their use cases better, while driving customer loyalty and frequency,” CEO Goldberg told TechCrunch. “Additionally, merchants can enhance revenue streams and foster customer loyalty. With Ansa, merchants can drive adoption of their wallets by integrating customer balances with rewards, incentives, and their other loyalty initiatives.”

6. Enlaza Therapeutics raises $100 million in series A financing

A specialist in covalent biologics, the company will use the money to further develop its proprietary covalent protein technologies and to support the advancement of wholly owned pipeline programs to the clinic.

Scientists at the company believe that using covalency in biologics could help develop protein…

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7. Paris-based Carbonfact raises €13.9 million to fast decarbonize the fashion industry

Carbonfact’s priorities over the next twelve months will focus on helping textile retailers and manufacturers measure and build plans to reduce their emissions in line with upcoming regulations and expanding global onboarding teams. The company has recently launched a new suite of modeling tools that enable fashion brands to understand how changes in product design or supplier selection can affect carbon footprints before products are made. This allows them to focus on reducing emissions instead of offsetting them

8. Backflip raises $15 million to help real estate investors flip houses

Flipping houses is not for the faint of heart, no matter how fun or easy HGTV might make it seem.

“We help investors source properties and curate their pipeline, analyze the deals that they might want to invest in, and hopefully make lower risk, better buying decisions,” CEO and co-founder Josh Ernst told TechCrunch in an interview.

Backflip launched a stealth private beta in 2021 that ran through the first half of 2022. Entering the market at a time when interest rates began to surge was challenging, said Ernst, who is a former investment banker and venture capitalist (he’s backed the likes of Polychain Capital). Yet the company managed to grow its revenue nearly 5x in 2023 and reach an annualized revenue of $10 million. It also claims to be “near profitability.”

9. London-based Andrena Ventures reaches first close of €11,1 million fund to back Europe’s fintech mafias

Gideon Valkin, a former Monzo and ClearScore commercial leader, investor and entrepreneur, is launching Andrena Ventures : backed by some of tech’s best founders and VC leaders to capitalise on the ‘spin-off’ flywheel being seen across Europe. The fund has reached its first close with a final close planned for later in the year. He’s also announcing the fund’s first investment into an €11,1 million solo GP fund , a new AI-powered software-building startup from Monzo co-founding CTO, Jonas Templestein.

“Europe’s time has arrived,” said Valkin. “A new power network of founding teams has emerged out of Europe’s first generation of industry-defining companies. These teams are using their lessons and experiences to solve tomorrow’s most pressing and important problems across fintech, AI, climate-tech and enterprise software. They deserve investors who understand these problems, believe in their ambitious vision and have the knowledge and know-how to truly support them.”

The debut fund is backed by global tech leaders including former employer, Entrée Capital; RTP Global; Taavet+Sten (co-founders of Wise and Teleport respectively); Cherry Ventures Managing Partners, Filip Dames, Christian Meerman, Sophia Bendz; David Haber, Fintech GP at Andreessen Horowitz; Firat Ileri, Managing Partner at Hummingbird Ventures etc. including at least seven VC investors who have featured on the Forbes Midas List.

10. Swedish electric boat company X Shore raises €8.5 million to navigate the sector’s sustainability shift

The funds raised are earmarked for product R&D, improving sales and marketing strategies, and designing and scoping future new X Shore models. None of the funds are toward the factory, X Shore Industries 1, as funding requirements have been fulfilled already. X Shore is committed to achieving profitability, albeit at a revised time frame, in light of market conditions.

The company was founded in 2016 in Stockholm and has become one of the world’s leading supplier of electric boats with customers in markets such as North America and Europe. X Shore’s boats use no fossil fuels and have minimal impact on marine wildlife.

Konrad Bergström, founder and investor, said: “X Shore is a globally-recognised Swedish brand with significant support from the maritime and tech industries and everyone concerned with sustainability. Goodwill from the sector has remained consistent in spite of recent challenges experienced by the company which have risked X Shore losing focus of its founding vision. Our new CEO René Hansen has already put X Shore firmly back on course, and achieved remarkable things in a short period. Having not been operationally involved with X Shore for several years, I am proud to be back and playing a part in ensuring that Nordic innovation is charging the shoreline shift to electric.”