A crucible moment for the industry
April 10, 2023
As Q1 numbers start to roll in as well for the rest of the industry, it paints a sobering picture of the tech and startup ecosystem as a whole.
Just 21 Series Bs were done in fintech in all of Q1, averaging $25M. It’s important to note that these are just reported fundraises, meaning most of these probably closed in Q4. The difficulties we’ve had in fundraising this past year are not unique to us, it’s industry wide, and it’s only going to get more challenging from here for other companies looking to raise heading into Q2 and Q3 this year. Downrounds where valuations are slashed and employee stock options are wiped, layoffs, and company shutdowns will accelerate through the rest of this year.
This is a crucible moment for startups and only the best will survive. Some of the most well known companies in the world, Airbnb, Tesla, Intuit and more were pushed to their absolute limits and were on the brink of disaster before something happened that turned their fortunes around and they became the unicorns and behemoths we know today. It takes the team, the idea, the execution, and a little bit of luck to turn companies into ones that can define a generation.
We have all four.
Even though it may not feel like it living through this past year together, we couldn’t have timed our own fundraise better given overall market conditions. We started this process way earlier before anyone else, we signed a term sheet and locked in the valuation before the bottom completely fell out so that we could somehow do an upround at a higher valuation than our Series A, we converted the first batch of VCs by going after the ones that had been following us for years, and now by executing in Q1 and with a little bit of luck from the fallout of SVB giving tailwinds to private credit, we’re about to close the remainder and potentially oversubscribe the round just as we did for the Series A. We have one group coming into the office this Wednesday who has indicated they want to take $[ ]M, we have another group who just committed last week for $[ ]M, and we have another group who is in the final stages of diligence for $[ ]M. This doesn’t even count the close to dozen other groups all vying to get in the round. Against all odds, we are going to pull this off and this will put us in a unique and fortunate position that very few companies will be afforded in 2023.
The team, the idea, the execution, and a little bit of luck. We have it all and the close of this Series B is going to propel us to the front of the pack. Let’s go build a generation defining company, together.
