Startup Monday: Latest tech trends & news happening in the global startup ecosystem (Issue 87- April 22)

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Top startups news to follow this week:

1. Home energy assessment startup Enter raises €19.4M Series A to expand in Germany and beyond

Largely because of their age, houses in Europe can be notoriously hard to heat. Most were built for an era when the knowledge about energy consumption just wasn’t available in the way it is today. With energy becoming more expensive, and energy security ratcheting-up as a geopolitical issue, tech startups looking at this problem have been proliferating. What’s needed is a simple way for consumers to engage with the issue around how much energy their home needs, how to manage that and, crucially, how to finance the changes needed.

An example of this out of New York is Sealed, a climate tech company that designs, manages and finances home weatherization and electrification projects. It also recently bought sensor startup InfiSense to fuel its energy-saving services.

In Germany, a similar startup is “Enter” (formerly named Baupal), which has now raised a €19.4 million Series A financing round led by Target Global. Also in the round were VC firms Coatue, Foundamental, A/O Proptech and Partech.

Homeowners complete a digital survey, then get an assessment of the energy status of their building, and suggestions on how to reduce their outgoings. It also takes care of the appropriate subsidy applications for renovations.

Justus Menten, co-founder and managing director of Enter, says traditional energy assessments are way too slow: “Currently, around 200,000 properties are renovated in Germany every year. But to achieve our climate goals, it must be more than one million. Today’s certified energy efficiency consultants cannot achieve this goal in the traditional way. Although the training of new advisors is already running at full speed, it will take several years before sufficient capacities are available in Germany. This is where Enter comes in,” he said in a statement.

Enter claims that 75% of homeowners are worried they can’t afford energy-efficient renovations, hence why this is offered as part of the service.

2. Vesey Ventures closes on $78M debut fund to back early-stage fintech startups

After working together for nearly one decade, three former managing directors of Amex Ventures in early 2022 branched out to form their own fintech-focused venture firm, Vesey Ventures. The trio had made early investments in more than 50 fintech companies, including the likes of Stripe, Plaid, Melio and Trulioo. During that time, they also helped engineer over 100 partnerships between startups and financial services institutions.

Their goal was to take that 10 years of experience investing through the venture capital arm of one of the world’s largest credit card companies, and apply it firsthand to new early-stage investments — but with a twist. The firm says its intent is to go beyond term sheets to issuing bespoke “Strategy Sheets,” which outline how Vesey Ventures aims to leverage its network “to act as a company’s first business development team.” In other words, it wants to invest in early-stage fintech and enabling technology companies “where opportunities for early partnerships with financial incumbents exist.”

And today, the firm — formed by founding partners and friends Dana Eli-Lorch, Lindsay Fitzgerald and Julia Huang, who all left AMEX Ventures at the same time in late 2021 — has announced the closure of its $78 million debut fund. They named the firm Vesey Ventures after the street where American Express has its headquarters in New York. (They declined to say whether Amex is a limited partner in the new fund.)

The feat is particularly impressive considering that, according to PitchBook data recently cited by The Information, “female-led venture firms in the U.S. have raised only $74 million this year.” This means that in closing its debut fund, Vesey has effectively raised more than all female-led venture firms in the U.S. combined and more than doubled the amount raised by female-led VC firms so far in 2023.

3. Kate raises $7.6 million for its electric micro-cars

French startup Kate has raised a $7.6 million (€7 million) funding round from a bunch of business angels. As I wrote in my previous article on Kate, the company has ambitious goals when it comes to everyday mobility. It plans to use the funding to develop an alternative to regular cars (electric or not) by making something smaller, cheaper and easier to maintain.

Investors in the startup include Julien Lemoine (co-founder and CTO of Algolia), Emmanuelle Brizay (AC8 INVEST), Christophe Maurissen (managing director at Alcogroup), Romain Afflelou (CEO of Cosmo Connected), Benoît Charles-Lavauzelle (CEO of Theodo) and Antoine Leconte (founder of Cheerz).

And Kate isn’t starting from scratch. The company acquired NoSmoke, a small manufacturer of electric vehicles inspired by the Mini Moke. This way, Kate can reuse some parts and borrow some manufacturing processes that have been used to produce the leisure cars.

But Kate’s next car, which is currently called the K1, will be designed to be used every single day and not just for your vacation house. In Europe, people moving from A to B use a large vehicle — like a regular car — for 84% of their trips. It represents 11% of the CO2 emissions. And yet, 98% of trips are shorter than 80 kilometers (that’s 50 miles).

The Kate K1 is going to be a lightweight car that can reach a top speed of 90 km/h (56 mph). It isn’t designed for your long-distance trips. In that case, you’re better off renting a normal car. It isn’t designed for big cities either, as public transportation, bikes and shared vehicles work better in this environment.

But the Kate K1 would work well for people living in the suburbs or the countryside. It would work fine to drop off your kid at school, head to work and swing by the supermarket. It will have four seats and the entry level should offer a battery range of 200 kilometers (124 miles).

4. Singapore-based Accredify gets $7M to make sure your documents are real

Interested in tech, Quah Zheng Wei left his career as a chartered accountant to teach himself how to code. But it was his experience as an accountant that led to his interest in the blockchain and how it can be used to verify documents. “What intrigued me was the capability of the technology to allow for real-time authentication,” Quah told TechCrunch. “That was mind-blowing because fundamentally, accountants are there to match certain transactions and make sure everything tallies up against one another. When I realized that technology can completely displace that activity, it intrigued me.”

Co-founded by Quah in 2019 to securely verify documents, Singapore-based Accredify announced today that it has raised $7 million in Series A funding co-led by iGlobe Partners and SIG Venture Capital with participation from returning investors Pavilion Capital and Qualgro. So far, it has processed 12 million verifications on 2 million issued documents and served 600 users.

Accredify began by working with educational organizations to prevent the use of fake degrees and certificates. Then it began expanding into other use cases, including corporate registries and healthcare.

For example, during the height of the pandemic, Accredify worked with the Ministry of Manpower and the Ministry of Health to create a system that verified COVID-19 records so workers could travel. It has also collaborated with Singapore’s Accounting and Corporate Regulatory Authority to transform their data infrastructure. This means that now every time a company is created, it receives a verifiable business profile that can be traced back to the blockchain.

“I think being able to create this kind of commercial traction and adoption is something that we have done really well,” said Quah.

Accredify onboards clients by first creating an identity for them on the blockchain (it primarily uses Ethereum). It creates a wallet, or document store, which is a smart wallet on the Ethereum network. It manages the private and public key for the client. Then it draws data through dashboards or API integrations.

Other companies in the same space include Unifier, which Accredify partnered with during the pandemic — Accredify created documents while Unifier read documents for their clients. U.S. startups like Trinsic work with verifiable identity credentials, like New Zealand companies like MATTR are working with the country’s government to create digital identity and verifiable data.

5. After an ‘amazing year,’ SR One raises $600M to fuel more drug startups

SR One’s decision to become a standalone firm after serving as GSK’s venture arm for 35 years was what George described as a “win-win” for both entities.

GSK wanted to put more money into its drug pipeline. The investors at SR One, on the other hand, were itching to build their own portfolio.

Three years later, that split has paid off. SR One is now free to broaden the scope of its investments, while GSK shares in its successes by contributing to its fund.

Some of the firm’s bets have paid off handsomely, too. SR One supported Nimbus, for example, before the biotech sold an autoimmune drug to Takeda for $4 billion, and MiroBio prior to its acquisition by Gilead Sciences. It also invested in Arcellx, one of a short list of biotechs that have found IPO success over the last two years.

“It was, frankly, an amazing year for us,” George said. “It’s really focused on those fundamental value creation points — show me that you have a drug that’s actually treating patients. If you do that, even in the worst year that we’ve had in a number of years, you create value.”

SR One has already been putting its second fund to work. One of the beneficiaries was Mineralys Therapeutics, which raised $192 million in 2023’s largest IPO to date.

Going forward, George and his fellow investors are interested in product-focused and “platform” biotechs based on broader drugmaking technologies, he said.

The company was an early investor in the gene editing biotech CRISPR Therapeutics, and remains “excited” to do platform investments, he said. But George expressed a preference for more narrowly built platform companies that have a clear value proposition, a sentiment that’s become more common during the market’s pullback.

“There does need to be a thesis around where you can exemplify why this is the right modality to be able to derive a clinical benefit,” he said of investments in platforms.

One investment that’s currently in the works has roots in River Vision, a startup acquired by Horizon Therapeutics and a key reason Amgen recently agreed to buy the company for $28 billion. SR One was an investor in River Vision, and is working with the scientists behind the startup to develop two companies focused on kidney disease, he said.

The fundraise, meanwhile, adds to what’s been a record haul of late for venture capital investors. Venture firms raised about $163 billion in 2022 and put nearly $31 billion into biotech and pharma investments last year, according to the National Venture Capital Association.

6. Extended Reality (XR) Market — Growth, Trends, COVID-19 Impact, And Forecasts (2023–2028)

The Extended reality market is projected to reach USD 111.5 billion by 2028 from USD 40.1 billion in 2023, at a CAGR of 22.7% from 2023 to 2028 according to a new report by MarketsandMarkets™. The major factors driving the growth of the extended reality market include the availability of affordable VR devices, increasing demand for extended reality in the entertainment and gaming industry, and the surging adoption of extended reality in healthcare sector.

The demand for extended reality hardware is in a growing phase. Due to macroeconomic factors such as increasing prices of hardware devices, trade disputes, and decreasing gross domestic product (GDP), the demand for extended reality devices decreased in 2022; however, the upcoming launches planned for XR headsets are expected to support the market growth from 2023 to 2028. For instance, Apple Inc. is expected to launch its XR headset in 2023. Also, Meta Platforms, Inc. has planned to launch Oculus Quest 3 in the same year. In addition, several startups are working on developing affordable XR hardware devices so that they can be widely used across consumer, commercial, and enterprise applications. Owing to this, the hardware segment of the extended reality market is expected to grow at a higher CAGR of during the forecast period.

The consumer application segment is projected to account for the largest size of the extended reality market from 2023 to 2028.

The consumer application segment is projected to account for the largest size of the extended reality market from 2023 to 2028. The consumer segment of the market comprises gaming and entertainment applications wherein AR technology is used to create 3D visual objects in the real world. The flourishing gaming and sports and entertainment sectors fuel the use of AR technology in consumer applications. VR technology also offers remarkable results regarding visual effects when used in gaming and sports broadcasts. The demand for HMD is high in consumer applications. They are used in smart glasses in sports (such as ski driving and fighting games). The demand for the development of VR apps is increasing from the entertainment sector to enhance the experience of users during sports broadcasts, along with gathering information from social networking sites.

7. Startup ecosystem will help create USD 10 trillion economies in India

The Indian startup ecosystem is a thriving space for all the young entrepreneurs and businesspersons who want to make it big as far as self-employment and novel ideas of business are concerned. This ecosystem is home to a plethora of opportunities as it is the third largest startup ecosystem across the globe, with more than 96 thousand startups, and the value created by the same is USD 500 billion.

As per projections, by 2025, further development in this sector will lead to the total number of startups increasing to 2 lakhs, which will employ 3.25 million people. It is being projected that from 2021 up to 2025, a total of USD 150–200 billion will be invested in the Indian startup ecosystem, and by 2025, the Indian startup ecosystem will become the second largest in the world after the USA, and will also have 250 unicorn companies.

Along with this, India has also emerged as a software export giant with the largest engineering population in the world and exported more software (USD 148.3 billion) than Saudi Arabia exported oil (USD 145.3 billion) in the year 2021. If we take a gander at the functioning of the startups in India, 67 percent of all the startups are concentrated in Bengaluru, Delhi-NCR, and Mumbai, and between 2021 and 2022, Bengaluru saw 48 percent of the total deal value.

From 2014 to 2022, startups have raised USD 136 billion, with more than 520 accelerators and incubators, more than 750 institutional investors, more than 2480 active investors, and more than 950 acquisitions. 2022 saw startups raise USD 25 billion across 1,519 deals and 240+ M&As. Along with this, India’s 108+ unicorn companies have created USD 350 billion in value. 42 startups emerged as unicorns over 2021, more than the figure for the last six years combined. In 2022, 22 new companies emerged as unicorns.

India is also growing as a deep-tech hub, with more than 3830 AI startups, more than 1170 IOT startups, more than 190 AR/VR startups, and more than 40 robotics startups.

8. Firefighting virtual reality training startup FLAIM lands $6.7 million Series A

A virtual reality firefighter training startup spun out of Deakin University has raised $6.7 million Series A, with the Victorian government’s investment fund Breakthrough Victoria, taking a minority stake in the business for $5 million.

FLAIM Systems has developed what’s believed to be the world’s first fully immersive virtual firefighting training system, offering a safe and cost-effective way to replicate the stress and uncertainty of real-world fire situations.

It combines a VR headset with haptic technology, which creates a kinaesthetic “feels-real” experience by applying force feedback to the user. This includes simulating an operational fire hose and a thermal vest that reproduces the heat firefighters experience in different scenarios from the direction of the fire.

Existing seed investors, including major shareholder Deakin University as well as Significant Capital Ventures, and FLAIM management and staff chipped in the balance of the Series A. The startup’s CEO Simon Miller, has invested $1 million since the Seed round four years ago.

The capital will be used expand FLAIM’s operations, further develop its technology, and create 25 new jobs by 2026.

FLAIM emerged out of Deakin in 2019, and has clients in more than 300 emergency services agencies, defence, training organisations and private enterprise across Australia, the USA and UK.

Breakthrough Victoria chair, John Brumby, a former state premier, knows the importance of training for emergency responders.

“Firefighters put their lives on the line to keep our community safe — this innovation in virtual reality training will help keep them safe during training and provide the experience they need on the frontline,” he said.

“We see a real potential for this world-first Victorian technology to be adopted by emergency services agencies around the world.”

The FLAIM Trainer is both safe and cost-effective way to train firefighters in the wake of the use of toxic chemicals at a Victorian training facility, which lead to an increased cancer risk for firefighters who trained there. Last year, the state government introduced a $57 million redress scheme to support around 1,3000 firefighters exposed to the carcinogens during training at the former Fiskville training facility, which shut down in 2015.

FLAIM Trainer tracks performance data, from task completion time, to air and water usage, stress levels, where the trainee is moving and looking within the scenario, how they position themselves and interact with virtual objects in the scenario such as gas meters, electrical boxes, or the fire itself. It has 80 different VR training scenarios, spanning bushfires to fires on aircraft, industrial sites and residential properties.

9. Define Ventures raises $460M to invest in early-stage digital health startups

Define Ventures has raised a hefty $460 million across two funds to fuel early-stage digital health investments.

The venture capital firm invests in incubation, seed, series A and series B stage startups, and, with roughly $800 million under management, it’s one of the few Silicon Valley firms focused solely on early-stage digital health startups.

Define Ventures’ two new funds include Fund III, which will focus on new investments, and Opportunities Fund to support its existing partners.

Define Ventures currently backs 21 companies including women’s health startup Tia, health and wellness brand Hims & Hers, virtual LGBTQ+ care provider Folx Health and mental health company Concert Health.

“The healthcare system is evolving rapidly as multiple healthcare, technology and consumer trends converge, and even with the progress over the last few years, it remains a $4 trillion market opportunity that desperately needs greater digital transformation,” said Lynne Chou O’Keefe, founder and managing partner at Define Ventures.

10. Memora Health nabs $30M to scale up complex care management solution

Care delivery is increasingly shifting out of the four walls of the hospital, a trend accelerated by the COVID-19 pandemic. But the lack of necessary infrastructure to support this digital health transition continues to be a major barrier for providers and patients.

Memora Health, which launched in 2018, developed an AI-enabled platform that helps providers manage complex care needs and digitizes clinical and administrative workflows.

The company just landed a $30 million round of new funding led by General Catalyst and backed by several major health systems. Northwell Health’s venture arm, Northwell Holdings, Edward-Elmhurst Health and PagsGroup and existing investors Andreessen Horowitz, Transformation Capital and Frist Cressey Ventures also participated in the round.

The funding round had no designation and was purely a strategic investment as the company was not looking to raise capital, according to Manav Sevak, co-founder and CEO of Memora Health.

“The structure of this financing is more unique as far as the type of organizations who participated including a handful of different health systems and also health plans participated as part of it,” Sevak said in an interview.

The startup has raised $80.5 million to date, according to Crunchbase, and banked $40 million in funding back in February 2022. Sevak declined to disclose the company’s valuation but confirmed that this latest strategic investment was “not a down round.”

Memora Health plans to use the funds to beef up its data analytics infrastructure to expand its care programs, build out its market presence to sell to health plans and deepen its relationships with current partner organizations with new service lines, Sevak said.

The San Francisco-based company spun out of the Harvard Innovation Labs and went through the famed startup accelerator Y Combinator in 2018, emerging as a text-based virtual assistant to help care teams manage patient discharges and follow-ups.

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