Dear Readers,
Exciting news! We’re thrilled to announce the launch of our new Life Sciences section in the Newsletter. We’re dedicating significant time to bring you updates on big fundraising rounds and deep dives into specific sectors within life sciences. From the application of computational tools in biology to the automation of healthcare systems, anticipate insightful coverage that will keep you abreast of the dynamic developments in this field.
In case you missed it…
General Technologies 🚀
💸 Fundraising Highlights
💰 Global startup funding almost hit $22 billion as of January 2024, a slight dip from 2023’s average but up from December 2023. Despite a challenging environment, there was notable activity: late-stage ventures secured over $10 billion, early-stage $9.4 billion, and seed funding stood at $2 billion. Key fintech players like Bilt Rewards and DailyPay witnessed significant growth, whereas Quora saw a decrease in valuation.
👨💻 The tech sector faced layoffs, with 17,000 U.S. tech workers affected in January, a decrease from January 2023’s 65,000. The industry is on edge, eyeing the IPO market for a revival to boost startup funding.
🤖 February brought unexpected optimism for AI startups, with total investments eclipsing $2.6 billion, led by Moonshot AI’s colossal $1 billion round. This momentum, highlighted by substantial investments in Lambda, Sierra, and Recogni, challenges the predicted slowdown and underscores the robust interest in AI technologies.
➡️ Find an expanded funding recap of the month here.
🌟 Spotlight Stories
📢 Nvidia’s Market Milestone
Nvidia exceeded earnings and sales forecasts on Wednesday, 21st, propelling its valuation to $2 trillion due to high demand for its AI chips. This highlights Nvidia’s significant role in the AI revolution, with an impressive 233% revenue growth forecast in Q1. The company’s shares have jumped nearly 60% this year after tripling in 2023, contributing significantly to the S&P 500’s overall gains. This growth in the chip designer’s shares has been key to the S&P 500’s gains, accounting for over a quarter of the index’s rise this year. Read more about Nvidia’s effect on Wall Street here.
🤖 Nvidia CEO Jensen Huang’s Vision for AI
Meanwhile, Nvidia is further strengthening its AI market presence. CEO Jensen Huang detailed his AI ambitions in a Wired interview, covering everything from robotics to sophisticated AI computing. Nvidia’s market lead and Huang’s strategic vision place it at the forefront of tech innovation. Read the full interview here.
🔔 Reddit’s IPO Plans
The social media launched in 2005 by web developer Steve Huffman and entrepreneur Alexis Ohania, Reddit, is preparing for its first major IPO since Pinterest in 2019, showcasing a 21% revenue increase in 2023 despite losses. With 73.1 million daily users and over 100,000 communities, Reddit’s unique social media role is clear. Its IPO highlights both potential growth and the intricacies of online community dynamics. SEC filings reveal Sam Altman of OpenAI as a significant shareholder. Read more about Reddit, its history and the state of social media companies here.
Sustainability 🌍
🔋 The Paradox of Clean Energy Transition: Mining’s Environmental Challenge
As we pivot towards renewable energy, the necessity for ‘clean energy’ minerals such as lithium, nickel, and cobalt is undeniable. These minerals power the technologies that are essential for a sustainable future. However, the process of extracting these resources presents a significant environmental and ethical dilemma.
⛏️ Insights into the Mining Dilemma
- The transition to renewable energy has led to a skyrocketing demand for essential minerals: lithium demand has tripled, nickel has risen by 40%, and cobalt by 70% between 2017 and 2022.
- Despite their critical role in clean energy, the extraction of these minerals often results in severe environmental degradation including deforestation, water pollution, and significant water usage — two million liters of water to extract a single ton of lithium, exacerbating water scarcity in vulnerable regions.
- The industry is also marred by human rights concerns, with prevalent issues like forced labor and exploitation, particularly in developing countries.
🌍 Global Initiatives and Ethical Considerations:
- Efforts are underway globally to ensure that mining for energy transition minerals is conducted in a sustainable and ethical manner. There is a particular focus on countries like the Democratic Republic of Congo to reduce environmental impacts and ensure fair labor practices.
- These initiatives emphasize the importance of responsible extraction, urging the development of national strategies that prioritize environmental conservation and human rights.
🤝 A Call to Collective Action:
- Governments and policymakers are urged to enforce and strengthen regulations that promote sustainable mining practices and ensure the ethical treatment of workers.
- The industry must adopt and adhere to higher standards of environmental care and human rights, fostering transparency and accountability in mining operations.
- Consumers and businesses should advocate for and support the use of responsibly sourced minerals, driving demand for ethical and sustainable practices in the supply chain.
🔮 Looking Ahead
Embracing clean energy is crucial for our global future; however, it would be paradoxical if it led to environmental degradation or human suffering. Through collaborative efforts among governments, industry, and consumers, we can navigate the complexities of mineral extraction and pave the way for a truly sustainable and ethical energy transition.
Read more on the subject ⬇️
The mining industry must be ambitious in its support of the net zero transition — World Economic Forum
Achieving responsible extraction and sustainable use of energy transition minerals and metals — United Nations
5 things you should know about ‘clean energy’ minerals and the dirty process of mining them — United Nations
Blockchain & Crypto 💸
🪙 Bitcoin ETF, Rising Markets and Technology Adoption
As many of our readers might have noticed, crypto markets have been green for the last few months.
The recent approval of a Bitcoin-denominated ETF seems to have done the trick in starting a new cycle for crypto, as capital has been pouring into the market. Now with close to $40Bn invested in Bitcoin ETF since January and around $4bn of daily trading volume, we start to see confirmation of institutional investor interest to invest in blockchain technology.
But while some might get excited about the surge of public crypto prices, we have to remain conscious of two key elements: how much has the technology developed since the last cycle (supply), and how much adoption it has seen (demand).
According to a16z’s State of Crypto Index (tracking developer and user activity), the current environment should have more fundamentals compared to the one from two years ago. While the number of active & interested developers decreased by -38% and -28% respectively, the contract deployers, verified smart contracts and developer library downloads all increased significantly (+156%, +26%, and +87% respectively). Those three metrics are key in understanding the changing landscape, where fewer developers are active, but there is a stronger focus on bringing new and better ways to interact with blockchain technologies. On the adoption side, the key metrics to monitor are the active addresses (number of users across chains, up +96%), number of transactions (+130%), and transaction fees paid (-82%). The final picture highlights a growing market with more active users, facilitated by lower transaction fees.
To expand on the changes mentioned above, we have seen over the past two years some significant innovations happen in the space, either through the emergence of decentralized solutions, partnerships between leading Web2 and Web3 companies, technological improvements from blockchain infrastructures, or even better regulatory clarity and environment:
- Rise of competitive decentralized products compared to their centralized peers, with the examples of Jupiter, a $5bn decentralized exchange on Solana, or Lido, the largest staking solution on Ethereum.
- Key partnerships were signed between actors such as Solana & Visa, Solana & Shopify, Helium & Telefonica, Moonpay & Mastercard, Avalanche & JPMorgan, Société Générale & MakerDAO, or more recently Crypto.com & BTG Pactual.
- Notable improvements were made on blockchain scalability, either through Layer2 diversification on Ethereum (with Arbitrum, Optimism and Starknet), or through protocol upgrades, improving scaling solutions and reducing fees (i.e. Ethereum’s Shapella upgrade)
- DePIN networks launched multiple real-world use cases (Helium Mobile’s $20 monthly phone plan or Hivemapper’s global mapping capacity) which have started to gain traction.
- More regulatory clarity has been brought forward, with cases such as the Ripple-favoured ruling in summer 2023, Binance and its former CEO pleading guilty to Federal Charges, or simply the Bitcoin ETF approval. Europe has also been proactive with their MiCA regulation, and we can expect more developments in the coming quarters.
🔮 Looking Ahead
When asked about how those changes reflect on the private side, our managers have highlighted an increased number of deals, larger valuations, and overall stronger founders. This should not be surprising, as an increase in public prices will impact the private sector much faster than in a traditional equity environment. Indeed, as projects release tokens earlier in their life cycle (closer to a Series B), surge in public markets have more direct impact on private valuations, where investors and entrepreneurs can expect liquidity within the next 6–12 months.
Overall, we remain excited about the blockchain industry and how the technology has started to impact our world. While we might be at the beginning of a new cycle, we are yet to see the all-time-high prices from 2022, despite having stronger fundamentals. We remain hopeful to see the emergence of a market that could be as disruptive as the rise of ChatGPT and generative AI.
We want to highlight that this newsletter is not financial advice. It is strictly educational and is neither investment advice nor a solicitation to buy or sell any assets nor to make any financial decisions.
⚖️ Regulations
- US large banks push the SEC to re-adjust its definition of crypto assets.
- a16z crypto Regulatory Team shared an update on recent developments.
🏦 Financial Institutions
- Genesis receives approval to sell their shares in Bitcoin and Ethereum trust.
- Binance announced that they’ll delist Monero (Privacy Token) following settlement with DOJ last year.
- FTX plans to repay its customers in full, yet it has no intentions of reviving its now-closed exchange.
🔥 Top Stories
- StakNet changes lockup schedule after criticism following their native token ($STRK) launch.
- Uniswap’s token ($UNI) increased significantly after a major governance proposal on rewards.
- Solana’s blockchain faced a 5-hour outage.
- Crypto-social project Farcaster faced a significant increase in daily active users.
🔎 Research
💿 a16z crypto presents a framework that highlights how NFTs can enhance brand engagement and consumer experiences.
📄 DBA published a thesis on liquid staking and their latest investment in Stride.
⛓️ Chris Dixon (a16z crypto) shared his view on how blockchains can repair the internet.
📄 Pantera published their perspectives on the current crypto market environment with their expectations for the future.
Videos
📹 Bankless invited Luca Netz to discuss the impressive success of Pudgy Penguins.
📹 Bankless discussed the Data Availability business model with Jon Charbonneau (GP @ DBA) and Neil Somani (CEO @ Eclipse).
Life Sciences 🔬
👩⚖️ The FDA is Modernizing Post-Market Drug Surveillance
The FDA leverages AI and human assistance to analyze over two million annual reports of adverse events. Simultaneously, the FDA is developing a regulatory approach for applying AI to drug development that will enhance pharmacovigilance.
💉 Will Eli Lilly Join the $1 Trillion Market Cap Club?
The drugmaker’s shares have surged +22.65% over the past month, outperforming the Large Cap Pharma industry average of +9% and surpassing the 3.97% increase in the S&P 500 index during the same period. This traction is especially due to its diabetes and obesity drugs. Mounjaro, a GLP-1 drug Lilly sells for diabetes, generated $5 billion in sales last year, while recently approved obesity therapy Zepbound appears to be off to a fast start.
💰 U.S. Drug Developers Raised a Staggering $6.2 billion in January
This marks the highest figure since February 2021. This surge can be attributed to upswing in investor confidence, significant stock recoveries, and notable M&A activity. Big pharma companies are looking to expanding through M&A activity or internal development, but also by investing in newer technologies through collaborations with innovative companies. For instance, Bristol Myers Squibb (MBS) has recentlyy entered into a partnership with Vant AI to accelerate Molecular Glue, with a substantial investment of $674 million. This encompasses contributions towards discovery, development, clinical trials, regulatory processes and sales milestone payments. Furthermore, BMS has committed to providing tiered royalties to Vant AI, underscoring its commitment to fostering innovation in the pharmaceutical landscape.
Not subscribed yet?
