I’m focusing on a few other projects for now, but will send out an email when I update the database again. Meanwhile, feel free to reach out on LinkedIn if you’d like to connect.

- Jim

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Key takeaways

• March was another strong month for venture studios and their startups

  • Total employees across all studios startup grew 1%, similar to prior months

  • Cyberstarts exited its startup Axis for “about $500m”

  • Eight funding rounds of greater than $5mm, the most in recent history

• Layoffs also increased in March with 22% of startups losing headcount, +1pp from February

• The fastest growing new startups were launched by either (a) well funded studios focusing on a specific end market like biotech, cyber, fintech or healthcare; or (b) incubated within a large vc like 8VC, Greylock, Sutter Hill or Thrive

• Two of the fastest growing startups are rollups:

  • Intrinsic Brands, a women’s health products rollup by Redesign

  • Kite, a consumer goods rollup by Juxtapose (announced $200mm funding from Blackstone in April)

Studio startup summary metrics

The fastest growing studio startups

Venture studios: top batting percentage

Venture studios: top slugging percentage

Studio startup funding

8VC startup Resilience, a sustainable pharmaceutical manufacturing company, raised $400mm in federal funding (Endpoints News)

Flagship Pioneering startup Ring, an anellovirus therapeutics company, raised $86.5mm from Alexandria Venture Investments, Altitude Life Science Ventures and CJ Investment (VC News Daily)

Sutter Hill startup Ghost Autonomy, which produces self driving software, raised $45mm (Crunchbase)

Diagram Ventures startup Synctera, which provides fintech infrastructure for startups, raised $15mm. The round was led by National Bank of Canada, a strategic partner (Global Fintech Series)

Hypothesis Studio startup Starfish Space, which manufacturers satellite service vehicles, raised $14mm. The round was led by Munich Re Ventures (Techcrunch)

Post Urban startup Hazy, a synthetic data company, raised $9mm. The round was led by Conviction VC (London Tech Watch)

Atomic startup Playbook, a Gen-Z/millennial focused financial and tax management app, raised $7mm. The round was led by Telstra Ventures (FinSMEs)

Operate Studio startup Torpago, a corporate credit card platform, raised $4mm (Crunchbase)

Studio startup exits

Cyberstarts startup Axis, a cloud security company, was acquired by HP Enterprise for approximately $500mm (Globes)

TandemLaunch startup Algolux, a computer vision company, was acquired by Torc Robotics. Terms were not disclosed (Crunchbase)

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we use employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring. More recently, it’s common for even high performing startups to limit hiring or reduce headcount to prepare for future macro conditions.

Not all funding or acquisitions are announced, and those cases will be undercounted in the summary metrics above.

The table of fastest growing startups includes U.S. based startups launched since 2020. In the ventures studio table, We measure startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

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Venture studio news

UBS announced strategic relationship with Swiss incubator, Tenity. As part of the deal, UBS will invest directly into Tenity’s fund and also serve as the strategic banking partner for Tenity’s fintech businesses - presumably making it easier for their startups to line up UBS as a lending partner. Having a capital partner out of the gate could be an appealing reason for founders to build their fintech startups with Tenity vs going at it alone and needing to secure their own lending partner. For banks, it can be difficult to pick with fintech will scale into a material driver of loan originations. Partnering with a venture studio is a good strategy to spread one relationship across many fintech bets (press release)

Atlanta based Neighborhood Studios launched a hyperlocal services focused venture studio. Starting with a list of 2,000 concepts across 250 verticals, their strategy is to build one MVP per month that they test with a dozen local users. Atlanta is a very representative city in terms of US demographics and may be a stronger testing ground than San Francisco or New York for the viability of new local services (hypepotamus)

Texas based venture studio, nth Venture, published its annual letter. Modeled after Berkshire Hathaway or Constellation Software, the firm incentivizes its managers via profit sharing vs pushing them to raise outside funding. It’s an interesting read from a new studio (nth Venture)

What is the difference between a venture studio and a startup studio? (Medium)

Interesting jobs

AI Fund - Founder in Residence, Book and I

“Book and I is an AI-powered system transforming the way organizations provide media-based services and learning experiences. We offer a large language model (LLM) companion platform which allows users to interact with text materials and media through a personalized and conversational learning experience, providing context, social learning, and smart annotations tailored to their needs. By focusing on higher education institutions, digital publishers, and corporate training sectors, we empower organizations to elevate the learning experience, boost productivity, and foster a culture of continuous growth.

While many generative AI applications are emerging as valuable assistance tools, they are not always designed to sustain engagement with the material, instead acting as helpful QA systems. In contrast, the Book and I system leverages effective learning techniques and individual preferences to personalize learning at scale, while preventing abuses like cheating, plagiarism, etc.”

Redesign Health - CEO, ALF Enhancement

“We are launching a Stealth Venture that provides clinical wraparound services (behavioral health + chronic care management + urgent care) and a communications software platform that partners with senior living facilities (with assisted living facilities (ALFs) as the initial target customer) and their existing rounding physicians at ALFs to enable interoperability, care coordination, and communications for delivering care to residents.

ALFs see high complexity and high acuity patients, and residents and families are increasingly looking to ALFs to manage the health of their seniors.  ALFs also have rounding physicians from the community who visit the facility and deliver care, with one PCP (or NP) often serving between 60-90% of the resident population. However, it is often a manual process for rounding PCPs to share clinical notes with ALFs and their residents / caregivers, hindered by lack of data sharing and interoperability.  This is where StealthCo comes in.  StealthCo’s vision is to empower ALFs and their PCPs to deliver coordinated and comprehensive care by partnering with the existing rounding PCPs and leveraging their existing patient relationships and penetration within the ALFs.”

Struck Studio - Various Positions, Pawcare

“Over 70% of U.S. households are now pet owners and an estimated 850M visits annually to service providers, yet discovering, comparing, and scheduling professional pet care is still a time-consuming and frustrating experience in comparison to booking services for their human counterparts.”

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email.

See every venture studio CEO role for a list of 50+ active startups in development.

Need advisor for bullying prevention telehealth non-profit

As part of a non-profit, I’m working with a renowned child psychologist on a bullying prevention program administered via telehealth. We are looking for best practices around building telehealth operations - e.g., user acquisition, HIPAA compliance, therapist credentialing, insurance billing.

If you have experience developing telehealth businesses and are interested in making an impact on this important cause I’d love to speak with you.

Right now we are currently looking for strategic advice on scaling out the program. There will be consulting, full-time and board-level opportunities as we make progress. Please reply to this email or reach out via linkedin.

Database additions

We added 8 venture studios and 7 startups to the database, which now totals 408 studios and 1,843 startups.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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Key takeaways

• February was a strong month for venture studios and their startups

• Headcount growth: headcount across all studio startups grew 1% in February, similar to January and faster than December

• Funding: five major rounds, most notably Cyberstarts startup Wiz raising at a $10b valuation

  • Lightspeed Venture Partners led rounds in two different studio startups

• Exits: five studio startups were acquired at small valuations or with terms not disclosed

• Sector observations: most of the fastest growing startups were in Cybersecurity or Healthcare, both sectors that benefit from industry relationships and are hard for solo founders to enter

• Studio batting %: at least 24 studios with the majority of their startups growing or having been acquired

• Studio slugging %: 13 studios have launched multiple large winners (500+ employees or an IPO). These studios mostly do external investments as well as incubations and all manage large funds

Studio startup summary metrics

The fastest growing studio startups

Venture studios: top batting percentage

Venture studios: top slugging percentage

Studio startup funding

Cyberstarts startup Wiz, which provides cloud security design software, raised $300mm at a $10b valuation. The round was led by Lightspeed Venture Partners, Greenoaks Capital and Index Ventures (Pitchbook)

Greylock startup Tome, an AI-powered Powerpoint killer, raised $43mm at a $300mm valuation. The round was led by Lightspeed Venture Partners (Tome by Lightspeed)

Otherlab startup Gradient, which provides a heating and AC window unit, raised $18mm. The round was led by Sustainable Future Ventures and Ajax Strategies (Press Release)

Madrona Venture Labs startup Vouched, which provides identity verification for regulated industries, raised $6.3mm. The round was led by BHG VC and SpringRock Ventures (GeekWire)

High Alpha startup Zylo, a SaaS spend management tool, raised $5mm. The round was led by MassMutual Ventures (Press Release)

Studio startup exits

Foundry.ai startup Curia.ai, which provides AI software for value-based-care healthcare providers, was acquired by Aledade. Terms were not disclosed (MedCity News)

eMotion Studios startup Hitbel, a Brazil based software provider to churches, was acquired by One Big Media for R$20mm - approx USD $3.8mm (Crunchbase)

R/GA IoT Venture Studio startup Homebox, a UK based utilities comparison and switching service, was acquired by Billing Better. Terms were not disclosed (Finextra)

Rocket Internet startup Katoo, a Spain based software tool for restaurant suppliers, was acquired by Choco. Terms were not disclosed (Crunchbase)

Signal Ventures startup OilX, a UK based energy analytics provider, was acquiredd by Energy Aspects. Terms were not disclosed (Press Release)

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we use employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring. More recently, it’s common for even high performing startups to limit hiring or reduce headcount to prepare for future macro conditions.

Not all funding or acquisitions are announced, and those cases will be undercounted in the summary metrics above.

The table of fastest growing startups includes U.S. based startups launched since 2020. In the ventures studio table, We measure startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

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Venture studio news

General Catalyst partnered with 15 health systems to enable pilot customers for its startups. While General Catalyst does more external investments vs incubations, the article explores various reasons hospital systems join venture networks in general: i.e., staying ahead of competition, joining a prestigious club and gaining a financial stake in startups:

"It's also an opportunity for the traditional healthcare system to diversify their portfolio at a time when inpatient revenue and outpatient revenue are a challenge. We've created, for lack of a better word, a cool club. Health systems that really don't have a lot to be happy about want to join that cool club. And what they're getting out of that is this amazing creativity and knowledge of what's happening." …

"The health systems, we're just supposed to be hospitals that take care of sick people. What people are realizing is that's going to make us Sears in 10 [years]. Meanwhile, the One Medicals, the Chen Meds, the Oak Street Healths are gonna say, 'Yes, Steve, you keep doing that. And your competitor is Penn. Just let us at One Medical take the paying patients. Don't do anything entrepreneurial. You just keep taking care of the Medicaid patients.' And again, it would be great if we had a system where that worked, but that doesn't work.

(Becker’s Hospital Review, thanks to Aayush Gupta for sharing)

Thrive Capital sold a 3% stake of its GP to a group of businessmen including Bob Iger and Henry Kravis, valuing the VC firm and incubator at $5.3b. This deal is not only the highest reported venture GP valuation, but also gives Thrive strategic partnerships with some of the most powerful people in France, Brazil, India and in Finance and Entertainment broadly (Announcement, Deadline, WSJ - $)

Founders Factory partnered with Fastweb, an Italian telecommunications firm, to launch an accelerator and incubator (Silicon Canals, Tech.eu)

Pioneer Square Labs published an example of an internal memo used to kill a startup idea. The analysis covers Google/FB customer acquisition test results, competitive landscape and TAM (Medium)

Google shut down most of its Area 120 incubator. The company still runs other incubators, including X - The Moonshot Factory (Techcrunch)

Nikhil Krishnan, a healthcare tech and business writer, published a list of GPT healthcare startup ideas (Out-Of-Pocket)

Union Square Ventures invested in startups from two different venture studios last month (Venture Studio Index)

Interesting jobs

AI Fund - Founder in Residence, Cerebro

“Cerebro’s vision is to build the first “data lakehouse” paradigm for large-scale DL workloads.”

High Alpha Innovation - CEO & Founder, Agri-Food Production Maintenance

“We are partnered with Purdue University's Digital Innovation in Agri-Food Systems Laboratory (DIAL), a part of the Purdue Applied Research Institute (PARI). DIAL is a venture studio focused on creating startups that bring digital innovation to our food and agriculture system. In our work together, we explore unmet needs in the agri-food value chain, develop potential solutions, and launch new companies to build and bring them to market.

Our newest company is currently in Stealth Mode and is seeking a CEO & Co-Founder to bring to market a software platform that helps Ag Retailers and Food Manufacturers get a grip on their maintenance and repairs to support vital operations such as work orders, equipment, skilled labor, process flow and forecast maintenance needs.”

Platform Venture Studio - Founder in Residence, "Party in a Box", Party Planning

“Party planning is time consuming and overwhelming for busy individuals, especially moms. Pricing and variable estimates for a traditional party planner is a concern, and there is currently no simple way to select and hire party planner. Is there a way to make party planning and decorating easier AND eco-friendly at the same time? We are looking for a founder who is interested in coming up with a one-stop shop platform to help consumers throw their picture-perfect party.”

Platform Venture Studio - Founder in Residence, Quality Childcare

“There is a significant childcare gap in US and it is costing the country billions of dollars. Many markets don’t have any childcare resources. We're looking for a founder who would be interested in designing an innovative solution to this -- perhaps a platform that offers major operational improvements and/or cost savings to the daycares, or a ‘daycare in a box’ service to help daycares get launched quickly and passing all regulatory hurdles.”

Redesign Health - CEO, Pediatrics Stealth Co.

“StealthCo will partner with and acquire pediatric primary care practices to enable a conversion from fee-for-service to value-based care by providing a full suite of support services, technology solutions, and care model innovations. Starting with the Medicaid managed care population, StealthCo will leverage these enhanced capabilities to develop value-based payor relationships and improve care access and quality for this underserved population.”

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email.

See every venture studio CEO role for a list of 50+ active startups in development.

Reader question

I’m speaking with LPs of venture studios and VC funds. If you are an institutional or individual investor in venture funds and are interested perspectives of other investors, please reach out or reply to this email.

Database additions

We added 7 additional venture studios to the database, which now totals 403 studios and 1,836 startups.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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Key takeaways

• Headcount across venture studio startups grew 1% in January vs 0% in December

  • The fastest growing startups were in healthcare, cybersecurity, real estate and vertical talent

  • New additions this month: Harbour Health (8VC), Pearl Health (AlleyCorp), Journey Clinical (Beckley Waves), Baselane (Diagram Ventures), Alltrna (Flagship Pioneering), Splitero (Gemeni Ventures), tvScientific (Idealab), Xembly (Madrona Venture Labs)

• Layoffs continued to increase in January, with even more startups shedding employees

  • Startups with the largest layoffs were in ecommerce, telehealth, martech, fintech and biotech

• Startup fundraising remained strong, though no monster rounds

  • Union Square Ventures invested in startups from two different venture studios

  • Other leads in January include Norwest Venture Partners, AXA Venture Partners, Caffeinated Capital and Fiat Ventures

• Only one acquisition in January, terms were not disclosed

The fastest growing studio startups

Studio startup summary metrics

Studio startup funding

Antai startup Wallapop, a Spain based circular marketplace, raised $88mm at an $832mm valuation. The inside round was led by Naver, the Korean internet company, and Korelya Capital (Techcrunch)

Atomic startup Butter Payments, which helps eliminate accidental churns due to payment issues, raised $22mm. The round was led by Norwest Venture Partners (press release)

Juxtapose startup Dayforward, a digital life insurance company, raised $25mm. The round was led by AXA Venture Partners (Fintech Global)

HVF startup Pathpoint, a digital insurance wholesale brokerage for carriers, raised $12.5mm. The round was led by Caffienated Capital (Coverager)

Gemeni Ventures startup Splitero, a tech enabled home equity partner, raised $11.7m. The round was led by Fiat Ventures (Pitchbook)

Aegis Ventures startup Hume AI, which provides an AI toolkit to understand human expression, raised $10mm. The round was led by Union Square Ventures (USV)

Beckley Waves startup Journey Clinical, which provides ketamine assisted psychotherapy via teleheath, raised $8.5mm. The round was led by Union Square Ventures (USV)

PSL startup SingleFile, a compliance filing startup, raised $2.1mm on an inside round (Crunchbase)

Studio startup exits

Kamet Ventures startup Anorak, a UK based personalized insurance advisor, was acquired by Clark. Terms were not disclosed (press release)

Rocket Internet startup Global Savings Group, a Munich based commerce content platform, was acquired by Pepper.com in December. Terms were not disclosed (AETOSwire)

Venture studios with highest hitrate (exits + growers)

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we use employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring. More recently, it’s common for even high performing startups to limit hiring or reduce headcount to prepare for future macro conditions.

Not all funding or acquisitions are announced, and those cases will be undercounted in the summary metrics above.

The table of fastest growing startups includes U.S. based startups launched since 2020. In the ventures studio table, We measure startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

Reader question

Are you interested in a similar analysis for the broader VC startup ecosystem? What specifically would be useful?

Please reply to this email if you have any thoughts.

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Venture studio news

Nobody Studios, based in Laguna Beach, launched an equity crowdfunding campaign. The deal is structured as a SAFE with a $30mm valuation cap. While the campaign has raised only $236K so far, crowdfunding may have an added perk of creating a network of advisors and scouts incentivized to assist in Nobody’s venture creation efforts. The discussion board has an interesting list of investor questions worth reviewing (press release)

Symrise, a German fragrance manufacturer, invested in Ignite Venture Studios. This is another example of “strategic” LPs for venture studios. Other examples include late-stage VC firms looking for dealflow (e.g., Tiger Global and Fractal Software), PE firms with captive customer relationships (e.g., Apollo/Lifepoint and 25madison). Symrise’s LP investment follows a successful co-investment into one of Ignite’s earlier startups in 2021 (Women’s Wear Daily)

Purpose Built, a New York based venture studio, published a Monte Carlo model illustrating the economic benefit to founders in working with a venture studio (Purpose Built blog)

Rule 1 Ventures, an Atlanta based venture studio, gave an interview analyzing the benefits of an evergreen venture studio fund structure (Morrow)

Marble, a Paris based venture studio, publishes its 12 climate themes of 2023 (Substack)

Interesting jobs

DESCOvery by D.E. Shaw - Entrepreneur in Residence, Know Your Customer (“KYC”)

High Alpha Innovation - CEO Digital Health, Hospital at Home

“We are seeking a world-class startup entrepreneur for the role of CEO and Co-Founder for our newest company, which is currently in stealth mode (hereafter "StealthCo"). StealthCo is a cloud-based software platform focused on helping hospitals and health systems solve a challenging problem that is growing in prominence, urgency, and potential value - identifying and navigating patients who are good candidates for high acuity, hospital level health care in the comfort of their own home. StealthCo will use clinical and non-clinical data inputs to improve patient identification and manage the workflow from navigating patients from hospital care to home care.”

NLC - CEO, Soteria Vascular

“We're building a venture that develops a novel vascular access device that simplifies the steps of achieving effective and atraumatic vascular access, leading to lower failure rates and fewer complications even when employed by non-experts.

The invention is a novel vascular access catheter that semi-automates and standardizes catheter manipulations. The catheter design lessens the impact of common user errors, prevents vessel trauma, enhances user control, and thereby facilitates greater first attempt placement success and avoids procedural complications. There is already an advanced prototype that can be used for clinical studies.”

Redesign Health - CEO, Hair Health Stealth Co.

“The current marketplace for Ample is highly fragmented and not designed around patients/customers. This is a multiple billion dollar market in spend and is growing. Ample is looking for the CEO to help develop this digital-first company from scratch focusing on end-to-end patient experience within a subscription model to establish lifelong customers who can navigate care which does not exist in the market today. Ample will be focused on clinical excellence, successful patient outcomes and high quality patient experience. This CEO must be driven with the ability to get people to partner with them from various stakeholder groups.”

Redesign Health - CEO, SaaS StealthCo for Healthcare SMBs

“Medical practice owners want to take good care of patients and employees while running their business efficiently; this is increasingly difficult as employee benefit costs rise and retaining staff is harder than ever. 7 in 10 employers in the US expect substantial increases in the cost of health benefits over the next 3 years, and more than 50% plan to address rising costs by using programs or vendors that reduce total spend. StealthCo will procure and administer key benefits like health insurance, support HR workflows with SaaS and expertise, and deliver in-product features and ancillary products built specifically to the needs of healthcare SMBs.” 

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email.

See every venture studio CEO role for a list of 50+ active startups in development.

Database additions

We added 5 additional venture studios and 1 startup to the database, which now totals 396 studios and 1,836 startups.

Note many recently launched studios and startups are still in stealth, so recent years are understated.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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Key takeaways

• Venture studio startup funding was stronger in December than November

  • 7 startups raised nearly $300mm in total equity, double that of November

  • One round was an inside round, another brought on a strategic partner for follow on financing

  • New investors include IGM Financial, Riverwood Capital, Harmony Partners and Skagen Conscience Capital

  • There were no reported exits

• Headcount was flat vs ~1% growth in prior months

  • 28% of studio startups grew in December vs 27% in November

  • 21% had declining headcount in December vs 19% in November

• The fastest growing startups were in cybersecurity, healthcare and vertical talent

Fastest growing studio startups

Studio startup summary metrics

Studio startup funding

Diagram Ventures startup Nesto, a digital mortgage platform, raised $80mm. The round was led by IGM Financial (press release)

Thrive Capital startup Cedar, a patient payment and engagement platform for hospitals, raised $68mm in follow on capital. The round was led by Memorial Hermann Hospital (Crunchbase)

AlleyCorp startup Pearl, which produces Medicare patient enterprise software, raised a $56mm on an inside round. The company had previously raised $20mm, led by A16Z (Crunchbase)

Greylock startup Gladly, a customer service platform, raised $55mm. The round was led by Riverwood Capital (VC News Daily)

Juxtapose startup Nectar, a DTC allergy care company, raised $17mm. The round was led by Harmony Partners (Press Release)

General Inception startup Partillion Biosciences, which is developing a functional single-cell analysis platform, raised $4.9mm (Crunchbase)

Zinc Labs startup BelleVie, a UK-based homecare service, raised £2.1mm. The round was led by Skagen Conscience Capital (Northstar Ventures)

Team Global startup Enpal, a Berlin-based solar power leasing firm for homeowners, secured an €855mm debt facility. Financing was led by Blackrock (Saur Energy)

Studio startup exits

There were no reported exits in December 2022.

Venture studios with highest hitrate (exits + growers)

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we use employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring. More recently, it’s common for even high performing startups to limit hiring or reduce headcount to prepare for future macro conditions.

Not all funding or acquisitions are announced, and those cases will be undercounted in the summary metrics above.

The table of fastest growing startups includes U.S. based startups launched since 2020. In the ventures studio table, We measure startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

Conclusion

December was a stronger month for venture studio startup funding than November. Headcount growth, a proxy for traction, decelerated but still grew slightly. However, more startups conducted layoffs than in November.

The bright spots are again in cybersecurity, healthcare and vertical talent. These verticals are particularly well suited to venture studios - industries that benefit from high level partner relationships and the ability of the studio team to diligence many potential verticals to select the right entry point.

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Venture studio news

Andreessen Horowitz published its 40+ investment themes of 2023. These are the problem-areas large VC firms are looking to fund, and I expect to see many studio startups emerge to tackle them. Studios are particularly well positioned for several of them, thanks to the high-level relationships of their partners and their teams’ ability to diligence many potential verticals:

• Compliance as a competitive advantage

• Industrial robotics scale vertically

• Modern bio software stack

• Next generation of SaaS applications

• Specialized labor marketplaces

• The infrastructure stack for business banking

• Value-based care stack

(a16z.com)

New PE-backed venture studio focused on compliance for the wealth management industry. Menlo Park-based Surge Ventures represents a few themes of successful studios:

• Focused on building businesses in byzantine, regulated industries with difficult to obtain pilot customers

• Backed by a strategic pool of capital, in this case software PE firm Virgo Capital

According to Surge Venture’s press release, the firm will both incubate new companies as well as pursue acquisitions. This may be a third theme we will explore later (WealthManagement.com)

Steve Blank, who created the lean-startup movement, published an overview of venture studios in Harvard Business Review (HBR.org)

CEO roles for upcoming studio startups

We have created a new page tracking every venture studio CEO role. This is a great resource for founders interested in partnering with a venture studio, and for anyone interested in themes of startups in development.

Create - Co-founder, Moby

“Create has identified an opportunity in the device as a service space, which is a multibillion dollar market. Small to medium-sized businesses need a cost effective, seamless way to procure tech devices for their employees. Moby provides monthly device rentals for SMBs that are affordable, flexible and seamless.”

Create - Co-founder, Wedsy

“Create has identified an opportunity in the wedding planning space, which is a multi billion dollar market. There is currently very little overlap between people who need help planning their wedding and people who can afford a wedding planner. To resolve this issue, we are building a best-in-class platform that connects newly engaged couples with wedding planners and designers at an affordable price. The company’s vision is to democratize the wedding planning and design process for newly engaged couples around the world.”

Platform Venture Studio - Founder In Residence, Smart Truck Routing

“Truck drivers can drive 11 hours a day, but drive on average for only 5 due to inefficiencies in matching orders and drivers. Assigning one driver to a long route limits speed to an average of 30 mph due to the regulatory limit of 11 hours max driving per 24 hours. Truck drivers spend a lot of time away from home, leading to strain on relationships.

We are looking for a founder who is interested in designing a two-sided marketplace to solve this problem. We think this solution could look like:

• app or mobile web for drivers where they can find and pick up routes, and get updates and coordinates so they can successfully rendezvous for handover

• a loadboard like solution where a trucking company can post a route and have it broken into segments that get pushed out to drivers

• something else you come up with”

Redesign Health - Chief Executive Officer, SDOH Supplemental Benefit Platform

“We are launching a Social Determinants of Health vendor management and data optimization platform that enables payers to seamlessly offer targeted, high-impact, SDOH interventions to their chronically-ill members. This will be supported by an integrated, easy-to-use software platform enabling Community Based Organizations & health plans to collect high-value SDOH data, driving powerful analytics, improved health outcomes and member satisfaction. Health plans recognize the potential in SDOH support, but continue to face challenges in implementing programs to address members’ needs. By enabling health plans to provide customized SDOH benefits, Stealth Co’s end- to-end solution addresses key pain points and offers differentiated value, serving to close the care gap at the intersection of social determinants of health and chronic disease.”

Struck Studio - Chief Executive Officer / Co-Founder: Proptech

“This venture, still in stealth mode, is aiming to transform the traditional real estate rental model. With more and more companies embracing remote work, workers want flexible living arrangements that allow them to similarly evolve their personal lives. This venture aims to flip the traditional rental agreement on its head and enable location-flexible workers to live wherever they want whenever they want.”

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email.

Venture Studio Index is developing a recruiting service for venture studios to identify founders for their upcoming startups. Email founders@venturestudioindex.com or reply to this email.

See every venture studio CEO role for a list of 50+ active startups in development.

Database additions

We added 3 additional venture studios and 6 startups to the database, which now totals 391 studios and 1,835 startups.

Note many recently launched studios and startups are still in stealth, so recent years are understated.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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Venture studio news

A major venture studio conducted layoffs last week. Talent recruiting/sourcing was the primary department impacted, so if you’re a venture studio hiring for talent professionals with experience recruiting startup CEOs/CTOs then reply to this email, and I’ll pass along. Individuals are located in NYC, Texas, Florida, New Jersey, California, Pittsburg, Columbus and Boston.

Union Square Ventures partner, Albert Wenger, says venture studios were a “sign of the top:”

“To me one of the clearest signs of the top was that everybody was raising incubation funds. It was like "Oh, I'm raising a bunch of money for incubation." I'm like, "oh, I remember that I raised some incubation money at the height of the dot-com bubble." And when you get to the point where investors think-which was me at one point-that you don't even need entrepreneurs, that's kind of a really good sign it's the top.”

(The Information - $)

Back in 2011, Wenger wrote an interesting essay arguing the only type of venture studios that work are “foundries” by seasoned entrepreneurs who want to launch a few companies at the same time:

They are vehicles that let highly successful founders start multiple companies in parallel or rapid sequence. These companies are the founders’ ideas and the founders start out with 100% of the equity. They usually put in a relatively small amount of money themselves, quickly recruit a high class management team and build enough to be able to attract top-tier outside investors. What is critical to the success of foundries is the strength and connectedness of the founders. Without that it becomes impossible to attract strong teams and outside capital early in the process. 

Very few people have enough of a track record (and are great at picking ideas) to pull this off.…If you try to customize your offering for each startup and work with outside teams and their ideas, you wind up with both moral hazard and adverse selection problems of huge magnitudes. These incubators attract teams that are not strong enough to make it on their own (adverse selection) and expend too many resources for too long on concepts that are not getting traction (moral hazard). On top of that you don’t even have the control to make the changes that would be required to fix things.

I believe that the ecosystem at any point can sustain only a handful of accelerators and foundries. The fall off curve beyond those will be dramatic as by spreading out resources you diminish the likelihood of success (as we all know, starting just one successful business is super hard).

His examples of foundries that work were AlleyCorp and Idealab, which indeed did very well and produced a lot of good exits over the last decade (Continuations)

Pioneer Square Labs published a post on the areas they’re investing related to Generative AI (PSL)

Case study of a design sprint run by an AI startup last year that helped it find product market fit. The 5 day process moved from interviews to wireframe to simulation, which gave the startup conviction on what to build. This case study was part of the startup, Phaidra’s, recent $25mm Series A announcement. The piece was written by one of Phaidra’s VCs but the process has applications for the venture studio ideation process (Spring Stories)

We recently published data on November venture studio performance, and nearly all of the top growers were in Cybersecurity and Healthcare (Venture Studio Index)

Interesting job descriptions

Update: we have created a new page tracking every venture studio CEO role. This is a great resource for founders interested in partnering with a venture studio, and for anyone interested in themes of startups in development.

AI Fund - Founder-in-Residence, AI Career Coach

“The AI Career Coach is transforming the college recruitment process for graduate students.

From day one of their college experience, the AI Career Coach works backwards with students from their graduation date. The AI powered career coach makes personalized career recommendations for each student and identifies key goals they must complete to stay on track and find a job by their desired date.

Decreasing the manual effort involved in a job search, the career coach automates applications, outreach to the students’ networks, and scheduling.”

AI Fund - Founder-in-Residence: Identity Management Platform

“Identity and Access Management is an exploding market. However, nearly all solutions in this industry target the enterprise as the end customer. At AI Fund, we believe that Identity should be controlled by the individual, not the enterprise. With the emergence and maturation of AI, blockchain, and ubiquitous computing, the time is right for enabling individuals to regain control of their own digital and physical lives.”

AI Fund - Founder-in-Residence

“There are many scenarios in which marketers may solicit 100s or 1000s of pieces of freetext responses from users, such as:
- Market research to shape the definition of new products. 
- Reducing customer churn by reaching out proactively to specific customers to solicit feedback. 
- Soliciting user feedback on current products. 

Long-form multiple choice surveys have a low response rate. We have developed a new capability for marketers that enables them to synthesize user insights out of a collection of thousands or tens of thousands pieces of unstructured text written by users/customers/potential customers. In that synthesizing process, be able to predict customer desires, pain points and potential churn.”

Redesign Health - Chief Executive Officer, Sinope

“We are launching a software solution that streamlines clinical trial financial management workflows by addressing core operational and administrative frictions to reduce sponsor costs and trial delays. Clinical trial financial management workflows still rely on a combination of paper records, disparate spreadsheets and primitive software. This underpins the largely manual processes, fragmented/siloed data and lack of insights, which force sponsors to be reactive rather than proactive, contributing to avoidable trial delays and increased costs. Targeting the root cause of much of the inefficiency that exists today, StealthCo (Clinical Trial Finance Mgmt) is a planning and analytics platform built specifically for clinical trial sponsors.”

TandemLaunch - Chief Executive Officer of ChillSkyn

“ChillSkyn’s vision is to mitigate global warming impacts through the large-scale deployment of coatings that can achieve Passive Daytime Radiative Cooling (PDRC).   ChillSkyn is backed by TandemLaunch with $800k in the financing, with its next financing round scheduled for mid-2023.”

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email.

See every venture studio CEO role for a list of nearly 50 active startups in development.

CEO talent + passion areas

We regularly speak with founders open to partnering with studios in their next company. We are developing a recruiting service to help studios connect with potential founders who have told us they are passionate about the area where a studio is building.

These U.S. based founders have all had a prior exit and/or are VPs of a major division in a tech company. They are passionate about starting companies in the following areas:

• B2B SaaS for marketing and sales ops teams

• Blockchain EMRs

• Consumer business focused on evolution of consciousness

• Culture travel (e.g., connecting travelers with locals for guided tours)

• Picks and shovels businesses for psychedelic medicine

• Precision fermentation / cellular agriculture

• Sustainable civic construction

• Workflow software with embedded lending for construction, manufacturing or restaurants

If you are a venture studio building in any of the above spaces and would like to connect to these founders, email founders@venturestudioindex.com or reply to this email.

Database additions

We added 5 additional venture studios and 54 startups to the database, which now totals 388 studios and 1,829 startups.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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For operators, the primary benefits in partnering with a venture studio are:

• Access to shared studio resources like engineering, design, sales, marketing, etc

• Access to capital from their fund and network of VCs

• Industry relationships and pilot partner relationships

These are attractive roles for operators who are passionate about solving a problem and open to partnering with a venture studio to accelerate their success. According to our data, CEOs of the most successful venture studio startups tend to be:

• Prior founders who are looking to build again

• VPs of major groups at a medium to large tech company

We track all the publicly available job listings here, but most CEO opportunities aren’t announced publicly. Many studios work with us to connect with founders for stealth ventures in development. If you interested in founding a startup with a venture studio, contact founders@venturestudioindex.com with your background and areas you’re passionate about, and we can connect you with the top studios working in these problems.

We update this list weekly, subscribe for free for new CEO roles:

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Venture studio CEO and EIR roles

Last updated: March 27, 2023

Climate

High Alpha - Measuring carbon emissions together

“Not all emissions are created equal – and some are harder to accurately measure than others. Scope 3 emissions touch not just your own business, but those you work with and buy from. Measuring Scope 3 requires that businesses collect data from across their entire value chain. Even once that step is complete, carbon accounting is far from standardized – organizing and interpreting the data is another onerous process. We want to build a platform that helps businesses collect and standardize vendor emissions data so they can more easily and accurately measure their Scope 3 emissions.”

Platform Venture Studio - Founder in Residence, Clean Energy Homes

“Many homeowners could reduce their carbon footprint by turning their homes into clean energy homes. However, the process can be overwhelming and expensive. Homeowners may not know what to do, how to prioritize the work, what incentives and financing options exist, and what contractors to use. The result is often inertia.

On the supply side, there are inefficiencies and lack of up-to-date sustainable & clean energy education and best practices. It is usually up to the homeowner (or a savvy contractor) to discover resources from a wide range of websites. Being able to spot scams is a concern.

We are looking for a founder who is interested in designing a one-stop shop solution for the home electrification journey.”

TandemLaunch - Chief Executive Officer of ChillSkyn

“ChillSkyn’s vision is to mitigate global warming impacts through the large-scale deployment of coatings that can achieve Passive Daytime Radiative Cooling (PDRC).   ChillSkyn is backed by TandemLaunch with $800k in the financing, with its next financing round scheduled for mid-2023.”

Cloud / Data

AI Fund - Founder in Residence, Cerebro

“Cerebro’s vision is to build the first “data lakehouse” paradigm for large-scale DL workloads.”

Crypto

High Alpha - Powering better web3 user experiences

“Many web3 user experiences are convoluted and full of friction. If you’ve set up a non-custodial wallet, you’ve experienced this firsthand. Bad user experiences are a major hurdle standing in the way of mass adoption. Better segmentation and analysis of user cohorts will help product teams decrease friction and tailor user experiences, but current product analytics tools aren’t built for web3. We want to build a new product analytics platform that helps web3 businesses gain a more holistic view of users by layering wallet and product usage data.”

E-commerce

Slimmer AI - E-commerce | Founder in Residence

“E-commerce themes we've been excited by (so far) due to their potential for AI: 

Inventory management: Demand forecasting; inventory planning to prevent stock out and waste; preventive supply-chain risk detection; sustainability assessment

Customer personalization: Customer-specific recommendations; conversational customer discovery platforms, localized omnichannel customer experience; customer retention analysis; sentiment analysis/purchase prediction; personalized content creation

Sales optimization: Potential use-cases: Omni-channel revenue intelligence; assortment optimization; purchase, sales and discount pricing strategy; fraud detection; pricing and loyalty strategy analysis”

Education

AI Fund - Founder in Residence, Book and I

“Book and I is an AI-powered system transforming the way organizations provide media-based services and learning experiences. We offer a large language model (LLM) companion platform which allows users to interact with text materials and media through a personalized and conversational learning experience, providing context, social learning, and smart annotations tailored to their needs. By focusing on higher education institutions, digital publishers, and corporate training sectors, we empower organizations to elevate the learning experience, boost productivity, and foster a culture of continuous growth.

While many generative AI applications are emerging as valuable assistance tools, they are not always designed to sustain engagement with the material, instead acting as helpful QA systems. In contrast, the Book and I system leverages effective learning techniques and individual preferences to personalize learning at scale, while preventing abuses like cheating, plagiarism, etc.”

Fintech, insurance and lending

DESCOvery by D.E. Shaw - Entrepreneur in Residence

“A new venture of the D. E. Shaw group (“DESCO”) seeks talented and highly motivated individuals to join its Entrepreneur in Residence (EIR) program as part of our DESCOvery initiative. DESCOvery is DESCO’s venture studio. It explores unique opportunities to build out innovative, non-asset management technology-oriented businesses and ventures in areas such as fintech, insurtech, and data and the EIR will help us explore such opportunities”

Platform Venture Studio - Founder in Residence, AI Debt Coach

“The financial industry provides debt consolidation and credit counseling but these are not good solutions for many people. Debt consolidation - whereby the borrower consolidates all of their credit card debt into a single loan, with a lower API - seems smart in principle but, in reality, borrowers do not consider the monthly cashflow required to make the payments on the new loan, and end up running-up balances on their credit cards again. In other words, consumers have been told that the way to get out of debt is to get more credit, which is clearly not a good solution. Credit counseling is presented as a mechanism for borrowers to lower their APR but is often provided by the credit card companies themselves to keep borrowers paying interest rather than consolidating into loans or filing for bankruptcy….We are looking for a founder who is interested in building something like a ‘Noom for Debt’”

Healthcare

Founders Factory Africa - Co-founder, Project Damian

“Project Damian is a Founders Factory Africa venture that will deliver quality in-home, on-demand healthcare services through its network of trained, registered nurses. Nigerian patients deserve greater access to quality healthcare, and Project Damian aims to democratise healthcare delivery—helping patients receive the treatment they need when they need it.”

Redesign Health - CEO, ALF Enhancement

“We are launching a Stealth Venture that provides clinical wraparound services (behavioral health + chronic care management + urgent care) and a communications software platform that partners with senior living facilities (with assisted living facilities (ALFs) as the initial target customer) and their existing rounding physicians at ALFs to enable interoperability, care coordination, and communications for delivering care to residents.

ALFs see high complexity and high acuity patients, and residents and families are increasingly looking to ALFs to manage the health of their seniors.  ALFs also have rounding physicians from the community who visit the facility and deliver care, with one PCP (or NP) often serving between 60-90% of the resident population. However, it is often a manual process for rounding PCPs to share clinical notes with ALFs and their residents / caregivers, hindered by lack of data sharing and interoperability.  This is where StealthCo comes in.  StealthCo’s vision is to empower ALFs and their PCPs to deliver coordinated and comprehensive care by partnering with the existing rounding PCPs and leveraging their existing patient relationships and penetration within the ALFs.”

Redesign Health - CEO, Endo-enablement StealthCo

“We are launching a stealth venture that is a physician enablement platform purpose-built for endocrinology practices that provides the resources to efficiently and profitably deliver superior clinical outcomes and comprehensive diabetes patient care. The Company will empower endocrinologists with a dynamic technology platform, centralized practice management services, patient access / engagement capabilities, incremental revenue opportunities (panel expansion + care management services), and value-based care capabilities (quality-based payments evolving to risk). Amidst growing incidence of diabetes, limited clinician resources, and non-existent value-based care penetration in endocrinology, there is an opportunity to address patient, payor, and, critically, endocrinologist pain points by enabling endocrinologists to assume a leadership role in managing care for diabetes patients and shift to value-based care over time.”

Redesign Health - CEO, Hair Health Stealth Co.

“The current marketplace for Ample is highly fragmented and not designed around patients/customers. This is a multiple billion dollar market in spend and is growing. Ample is looking for the CEO to help develop this digital-first company from scratch focusing on end-to-end patient experience within a subscription model to establish lifelong customers who can navigate care which does not exist in the market today. Ample will be focused on clinical excellence, successful patient outcomes and high quality patient experience. This CEO must be driven with the ability to get people to partner with them from various stakeholder groups.”

Redesign Health - CEO, SaaS StealthCo for Healthcare SMBs

“Redesign Health is launching a new venture, StealthCo, a B2B SaaS and service company that helps healthcare SMBs procure employee benefits like health insurance and lower their HR administrative burden.

Medical practice owners want to take good care of patients and employees while running their business efficiently; this is increasingly difficult as employee benefit costs rise and retaining staff is harder than ever. 7 in 10 employers in the US expect substantial increases in the cost of health benefits over the next 3 years, and more than 50% plan to address rising costs by using programs or vendors that reduce total spend. StealthCo will procure and administer key benefits like health insurance, support HR workflows with SaaS and expertise, and deliver in-product features and ancillary products built specifically to the needs of healthcare SMBs.” 

Redesign Health - Chief Executive Officer, SDOH Supplemental Benefit Platform

“We are launching a Social Determinants of Health vendor management and data optimization platform that enables payers to seamlessly offer targeted, high-impact, SDOH interventions to their chronically-ill members. This will be supported by an integrated, easy-to-use software platform enabling Community Based Organizations & health plans to collect high-value SDOH data, driving powerful analytics, improved health outcomes and member satisfaction. Health plans recognize the potential in SDOH support, but continue to face challenges in implementing programs to address members’ needs. By enabling health plans to provide customized SDOH benefits, Stealth Co’s end- to-end solution addresses key pain points and offers differentiated value, serving to close the care gap at the intersection of social determinants of health and chronic disease.”

Redesign Health - CEO | Topaz | Senior Behavioral Health Stealth Co.

“As CEO of Topaz, you will build and launch a new business focused on the behavioral health needs of seniors.  In the midst of a broader mental health crisis, the behavioral health needs of older adults are significant and tragically overlooked.  The lack of adequate behavioral health care for older adults results in preventable medical spend and dissatisfied health plan members. Topaz is an integrated behavioral healthcare platform that delivers senior-oriented diagnostics and treatment programs. The business coordinates a team-based, evidence-based treatment program designed to meet the unique needs of older adults, improving patient experience and outcomes. Additionally, we are partnering with a reputable health plan with highly-rated Medicare Advantage plans to build Topaz and launch a pilot for thousands of Medicare Advantage members!”

Redesign Health - CEO, Value-Based Rx Stealth Startup

“Redesign Health is launching a new venture, StealthCo, a pharmacist-enabled comprehensive medication management approach, optimizing prescription drug outcomes for patients and providers.

The annual US cost of drug related morbidity and mortality is greater than $500B, with nearly 40 million US adults impacted by improper use of prescriptions / drug mortality. Current drug optimization and adherence solutions are not comprehensive and lower touch.

StealthCo is a tech platform that integrates the pharmacist as a key member of the care team, empowering patients to feel heard about their diverse medication challenges, driven to stay on therapy, and capable of leading healthier lives.”

Slimmer AI - B2B Healthcare | Founder in Residence

“B2B Healthcare themes we've been excited by (so far) due to their potential for AI: 

Digitization of healthcare workflows (doctors/GP/physician-focused tech stack): Patient scheduling; data logging and clinical documentation; optimization of patient referral; recovery pathways; admin workflow optimization, preemptive diagnosis; intelligent process routing

Diagnostics and treatments (hospital/clinic-focused tech stack): Data integration, predictive analytics and clinical intelligence; clinical screening and diagnostics through data analytics; enhanced patient monitoring; tele health services; precision health, claims, and payment administration

Pharmaceutical tech stack: Automated clinical trial workflow and research; automated procurement and supply chain; ML-enabled drug discovery and research; precision medication and personalization of healthcare”

Martech / Revtech

AI Fund - Founder-in-Residence

“There are many scenarios in which marketers may solicit 100s or 1000s of pieces of freetext responses from users, such as:
- Market research to shape the definition of new products. 
- Reducing customer churn by reaching out proactively to specific customers to solicit feedback. 
- Soliciting user feedback on current products. 

Long-form multiple choice surveys have a low response rate. We have developed a new capability for marketers that enables them to synthesize user insights out of a collection of thousands or tens of thousands pieces of unstructured text written by users/customers/potential customers. In that synthesizing process, be able to predict customer desires, pain points and potential churn.”

High Alpha - Letting podcast fans join the conversation

“Podcast communities are fragmented. Some are active on Twitter, some have Slack, Discord, or Facebook groups, and still others have Reddit communities. There is no dedicated place for fans to go to engage with episodes. Fans can’t react in a way that parallels the medium of content – conversationally, through audio and speech. We want to build a platform for podcast communities to better engage with episodes and have two-way, continuous conversations with hosts and other fans.”

High Alpha - Centralizing in person events strategy

“As we emerge from the pandemic, in-person events like conferences and tradeshows are back and here to stay. But, these events can be a headache for marketers to sponsor and plan for their team to attend, not to mention a large expense. Leads generated and other important metrics aren’t always followed up on or accurately tracked. Even when all this data is captured, it lives in Google Sheets, CRM or across multiple tools, leaving marketers to manually pull everything together to calculate ROI. We want to build a dedicated platform for marketers to more effectively plan, execute & measure effective field events.”

High Alpha - Disrupting the sales pitch

“The way we consume content has radically changed since the advent of the sales pitch. For many of us, smartphones have become our default operating system. Social media has rewired our brains to crave engaging, short-form content. Meanwhile, we’ve witnessed the “consumerization of the enterprise,” whereby consumer trends and technology infiltrate businesses. Despite those significant trends, sales collateral looks the same as it did five decades ago. There should be a solution for creating and sharing short-form, mobile-first sales content.”

High Alpha - Automating HubSpot ops

“HubSpot implementation and administration is a big lift for marketing teams. If they don’t set up their instance correctly and maintain good data hygiene over time, it can quickly become unmanageable, forcing some teams to start over from scratch These challenges have contributed to the rise of dedicated marketing operations roles, but those hires are costly and not typically made until well after HubSpot is selected. We want to build the no-code MarketingOps platform for Hubspot, helping companies optimize their instance setup and maintenance as they grow.”

Pets

Struck Studio - Various Positions, Pawcare

“Over 70% of U.S. households are now pet owners and an estimated 850M visits annually to service providers, yet discovering, comparing, and scheduling professional pet care is still a time-consuming and frustrating experience in comparison to booking services for their human counterparts.”

Privacy

High Alpha - Data privacy done the right way

“If it’s free, you are the product. Consumers and regulators seemed to realize this slowly and then all at once. Recently, a wave of data privacy regulations, including GDPR and CCDA, have been enacted. In addition, Google plans to phase out third-party cookies on Chrome by the end of this year. With data privacy at the top of consumers’ minds and a “cookie-less” future in sight, marketers need to adapt. We want to build a platform that finally does data right by compensating consumers for consent to sharing their data with advertisers.”

Wilbur Labs - EIR for stealth online privacy protection services company

“With the ever-growing online presence of consumers, it’s more important than ever to have protection in place to mitigate the risk of identity theft, harassment, fraud, and other forms of cybercrime. Wilbur Labs is seeking an Entrepreneur in Residence to define, launch, and lead an exciting new stealth venture that will offer new online privacy protection services to everyday consumers and businesses.”

Real Estate

High Alpha - Preparing multi-family properties for the future

“The recently passed California Green Building Standards Code requires that new construction and major alterations include adding infrastructure to support electric vehicles (EVs). The state is offering to award existing apartment complexes grants for every charging station installed. In addition, landlords are now required to add an EV charging station if a lessee requests it. California is a first mover around EV policy, but many other states and cities are following suit by passing laws and earmarking money to bolster EV adoption. Multi-family properties will need a platform help navigate these new mandates and manage EV charging station investments across properties and tenants.”

Struck Studio - Chief Executive Officer / Co-Founder: Proptech

“This venture, still in stealth mode, is aiming to transform the traditional real estate rental model. With more and more companies embracing remote work, workers want flexible living arrangements that allow them to similarly evolve their personal lives. This venture aims to flip the traditional rental agreement on its head and enable location-flexible workers to live wherever they want whenever they want.”

Supply chain / Logistics

Slimmer AI - Supply Chain | Founder in Residence

“Supply Chain themes we've been excited by (so far) due to their potential for AI: 

Inventory management: End-to-end inventory visibility in real-time, demand sensing/forecasting, stock level analysis (under/over stocking), upstream delivery management and prediction

Procurement: Supplier/vendor management; strategic sourcing; asset tracking, maintenance, and management; contract management and spend analytics; procurement workflow optimization and automation

Logistics and warehousing: Tooling, optimization and automation of warehouses; Tooling, optimization and automation of transportation networks; route optimization and asset tracking; last-mile logistics network and analytics

Supply chain monitoring and orchestration: Predicting end-to-end supply chain lifecycle; distribution planning; Supply chain security and risk assessment; end-to-end orchestration platform”

Other CEO and EIR roles

25madison - Apply to co-found with us

Cache Ventures - Founder in Residence

Create - Co-founder, Moby

“Create has identified an opportunity in the device as a service space, which is a multibillion dollar market. Small to medium-sized businesses need a cost effective, seamless way to procure tech devices for their employees. Moby provides monthly device rentals for SMBs that are affordable, flexible and seamless.”

Diagram Ventures - Co-Found with Diagram

High Alpha - Ensuring ethical AI/ML practices

“Artificial intelligence & machine learning (AI/ML) promise to unlock a revloutionary intelligence layer across software in every vertical. “Foundational models” like GPT-3 and DALL-E have been trained by feeding them virtually the entire internet. New and existing businesses are building on top of these foundational models and fine tuning them for specific use cases. Despite the rapid progress and adoption, there are few guardrails or standards in place for how ethically leverage AI/ML. That is starting to change, and New York City was recently the first to passed a law around AI/ML use in the hiring process. We believe the scrutiny and stakes for businesses will continue to grow, especially when the outcomes have high-stakes, real-world impacts. We want to build a tool that helps businesses vet models and data sources to ensure they are ethically leveraging AI/ML.”

Highline Beta - Founder in Residence (CEO), B2B SaaS

Platform Venture Studio - Founder in Residence

Platform Venture Studio - Founder in Residence, Quality Childcare

“There is a significant childcare gap in US and it is costing the country billions of dollars. Many markets don’t have any childcare resources. We're looking for a founder who would be interested in designing an innovative solution to this -- perhaps a paltform that offers major operational improvements and/or cost savings to the daycares, or a "daycare in a box" service to help daycares get launched quickly and passing all regulatory hurdles.”

Recruiting for a CEO? Email jobs@venturestudioindex.com to submit a new CEO role or discuss our recruiting service for CEO candidates.

Interested in being a CEO? Email founders@venturestudioindex.com with your background and areas you’re passionate about, and we can connect you with the top studios working in these problems.

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Key Takeaways

• November was a weak month for venture studio startup funding

  • Only six startups in our database raised meaningful rounds

    • These rounds were led by Gentree Fund, Georgian, Impact Labs, Jungle Ventures, Spring Lake Equity Partners

    • The VCs who typically lead venture studio financings did not lead any rounds this month

  • Only one exit and terms were not disclosed. This is the third month without a major studio startup exit

• Headcount across all studio startups grew 1% vs 2% in October and 1% in September

  • Fewer startups added headcount vs prior months

  • However, fewer startups reduced headcount

• Redesign Health and Cyberstarts dominated the fastest growing startups list this month

  • Almost every top grower was in healthcare or cybersecurity

Fastest growing studio startups

Studio startup summary metrics

Fastest growing studio startups

Cyberstarts startup Island, a secure web browser for the enterprise, raised a $60mm series B extension led by Georgian (VCAonline.com)

Rocket Internet startup Ofload, a freight forwarding company, raised $60mm led by Jungle Ventures (SmartCompany)

High Alpha startup Zylo, a SaaS management company, raised $31.5mm led by Baird Ventures with participation from Spring Lake Equity Partners (FinSMEs)

Heartbeat Labs startup Betriebsarzt Service, a Berlin-based occupational safety service, raised €6,8mm from Impact Labs (Crunchbase)

Wright Partners startup AgriAku, a Jakarta-based agriculture tech company, raised $5mm from Gentree Fund (Crunchbase)

Kernal Labs startup Forma Labs, a holographic meeting platform, raised $3.8mm (Crunchbase)

Studio startup exit

DaftCode startup Nethone, a Warsaw based fraud prevention service that had raised $11mm, was acquired by Mangopay. Terms were not disclosed (PYMNTS)

Venture studios with highest hitrate (exits + growers)

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we use employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring. More recently, it’s common for even high performing startups to limit hiring or reduce headcount to prepare for future macro conditions.

Not all funding or acquisitions are announced, and those cases will be undercounted in the summary metrics above.

We measure startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

Conclusion

As venture capital funding has dried up, so has the ability for venture studio startups to raise external money. However, headcount across the industry has continued to grow and fewer startups are laying off employees than in prior months. Venture studio startups appear to be faring better than your typical VC backed startup.

The bright spots are in cybersecurity and healthcare, especially those startups launched by Cyberstarts and Redesign Health - well funded studios with deep industry connections.

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A studio that launches studios

Paris-based venture studio eFounders has rebranded itself Hexa, a studio of studios. Hexa is now a holding company for three separate studios: Logic Founders (focused on Fintech), 3founders (focused on web3) and eFounders (focused on future of work). Hexa plans to launch two new studios next year, eyeing the agriculture, AI, climate, education, healthcare and real estate verticals.

High Alpha has pursued this strategy by launching High Alpha Innovation, focused on co-builds, as well as dedicated funds for certain university partnerships. 25madison launched 25m Health in partnership with Apollo Global and its hospital portfolio company LifePoint Health to build co-build companies.

I’ve spoken to other studios planning to become a “studio of studios” or a “meta-studio,” and expect to see even more. Reasons why:

• Venture creation is a craft effort, requiring a studio partner to find management teams, pilot customers, funding and market opportunity. At some point the hands-on work doesn’t scale

• Analogy here is the “multistrategy fund” pursued by Citadel, Point72, Millennium, etc. These firms raise a large pool of LP capital and shift funds across many individual hedge fund portfolio managers (PMs), while providing shared risk parameters and back office execution. This franchise model enables PMs to focus on picking stocks, while removing operational overhead. Multistrategy funds are becoming the dominant form of the hedge fund asset class

• Similar here, a meta-studio model like eFounders and High Alpha enables the firm to scale its startup creation playbook and LP relationships. Meanwhile, it lowers the barrier to entry for operators with the skillset and relationships to run their own venture studio by eliminating the need to raise their own fund. This franchise model could be a good solution for both sides

• Scale. A meta-studio can develop a more extensive track record and larger array of investment options, potentially improving its access to institutional LP capital pools from pension funds and endowments

• Industry focus. Slicing up a venture studio into multiple entities enables each studio franchise to focus on a specific end market, and continually develop relationships with potential pilot customers and portfolio company CEOs. Many successful studios are built around end markets such as Cyberstarts (cybersecurity), Redesign Health (healthcare), Flagship Pioneering (biotech) and this enables similar strategic focus

Still, it remains to be seen whether this meta-studio model will dominate as it has with hedge funds. Challenges include:

• Many of the largest venture studios exits required significant, hands-on effort by the seniormost studio founder to get off the ground. Mike Speiser is often CEO for the early years of Sutter Hill’s incubations. HVF and Kairos HQ’s founders are still the CEOs of Affirm and Bilt Rewards. Other successful incubations came out of VC firms who pursue a lower volume of high-conviction incubations. While there are examples of successful high volume studios, there also may be a limit to the number of levels that can exist in a successful system. And whether the marginal hour is better spent by the studio founder in improving the trajectory of their winnners vs franchising their studio model

• The meta-studio model adds another middleman who needs to get paid in company creation who is not part of the ongoing management team of the startup

• Availability of talent. Finding startup CEOs who are comfortable sharing their equity with a venture studio is already a challenge to the industry. How many potentially elite venture studio founders exist who are happy to operate as part of a franchise?

(Techcrunch, Hexa announcement)

Interesting job descriptions

DESCOvery - Entrepreneur in Residence

“A new venture of the D. E. Shaw group (“DESCO”) seeks talented and highly motivated individuals to join its Entrepreneur in Residence (EIR) program as part of our DESCOvery initiative. DESCOvery is DESCO’s venture studio. It explores unique opportunities to build out innovative, non-asset management technology-oriented businesses and ventures in areas such as fintech, insurtech, and data and the EIR will help us explore such opportunities”

gener8tor - CEO, Hi WiFi

“Hi WiFi provides infrastructure, network management and business tools that empower communities to form their own independent internet service providers. Incumbent ISPs do not provide stable and affordable internet to rural and low-income communities. Hi WiFi delivers a turnkey business-in-a-box solution that leverages mesh networks to enable rural and low-income communities to create their own independent ISPs”

General Mills - Co-Founder/Corporate Entrepreneur

“The G-Works Co-founders are corporate entrepreneurs who bring passion, grit, agility and innovation to General Mills as they work in 3 person startup teams to discover new business opportunities. They develop deep empathy for consumers through research, learn through experimentation, and ultimately leverage the scale of General Mills to accelerate growth for their business…we are looking for strategic, passionate, entrepreneurial leaders to join as Co-founders in February 2023. These Co-founders will identify, create, validate, and operationalize new businesses that solve critical consumer problems in the food space. Their specific focus area will be around convenience or joy”

Redesign Health - Founder/CEO of Neurodegenerative Disease Care StealthCo

“Silver is a tech-enabled care partner that empowers PCPs and Neurologists to manage the increasing prevalence of Neurodegenerative Diseases (NDD), in particular the rise of dementia and Parkinson’s (PD) and the impact these NDDs have on patients’ comprehensive health outcomes.  Silver’s multidisciplinary care team of mid-levels augments existing clinicians’ capabilities to deliver the “gold standard” of coordinated care in a scalable way to move NDD care into a value-based model.”

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email

Startup CEO recruiting service

Venture Studio Index is developing a paid service to help studios recruit founders for their new ventures. Leveraging our data on thousands of venture studio startups, we are building a network of high potential founders and the problems they are passionate about solving in partnership with a venture studio. The service connects clients to potential CEOs with matching interest for exploratory conversations.

If you are a studio interested in being a pilot customer and connecting with high potential startup CEOs, email founders@venturestudioindex.com or reply to this email.

Database additions

We added 6 additional venture studios and 8 startups to the database, which now totals 383 studios and 1,775 startups.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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One knock against the venture studio model is that VCs are reluctant to invest in their startups given their large initial ownership (20-50%). Investors prefer this equity be used to motivate management and lay in reserve for future fundraises. They are worried about too much “dead weight” on the cap table.

At the same time, at least a thousand studio startups have raised outside funding. Reasons why studio startups still make attractive investments include:

• They are generally well-dilligenced opportunities in markets ripe for disruption

• Studios recruit experienced management teams passionate about the problem space

• These startups have existing governance structures (board of directors, protective provisions) implemented by the studios upon company formation

• Studios provide ongoing expertise, network, playbooks and support

It’s painstaking work for venture studios to articulate these benefits to investors, especially to those with no familiarity of the venture studio business model.

That’s why we collected data on every U.S. based venture studio seed and series A funding round in the past five years to find which VCs are leading the most deals.

List of VCs

More than 800 unique firms participated in a seed or series A rounds for a U.S. based venture studio startup. These firms should at least be knowledgeable of the venture studio model going forward.

Nearly 200 unique firms have led a seed or series A round for venture studio startup.

33 firms have led or invested in multiple startups from multiple studios. These firms are as follows:

• Acrew Capital

• Amplify.LA

• B Capital Group

• Canaan Partners

• Coatue

• Crosslink Capital

• Define Ventures

• ETF@JFFLabs

• FirstMark

• Flying Fish Partners

• Forerunner Ventures

• Founders Fund

• Foundry Group

• General Catalyst

• Greylock

• Harlem Capital Partners

• Hearst Ventures

• Initialized Capital

• Jazz Venture Partners

• Kickstart

• Kleiner Perkins

• M13

• MaC Venture Capital

• Norwest Venture Partners

• Revelry Venture Partners

• SeaChange

• SV Angel

• Tiger Global Management

• Tusk Venture Partners

• Ulu Ventures

• Unusual Ventures

These rounds span a large number of tech verticals: AI, biotech, crypto, cybersecurity, data, fintech, healthcare and software.

Strategic relationships between studios and VCs

Several VCs not only invest in startups coming out of studios, but also act as strategic investors into the studios themselves. These relationships can also be informal, where venture firm partners are LPs in studios funds. VCs create these relationships with venture studios to have proprietary access to future deals.

The data here is mixed. While most top venture studios have raised from the same VCs across multiple startups, none of the top studios have 100% of their rounds led by the same VC. Conversely, the VCs most active with venture studio startups tend to invest across multiple studios.

There’s certainly value in strategic relationships - for the VCs to generate proprietary dealflow and for the studios to have trusted capital sources - but there’s also a limit. Neither side appears interested in total exclusivity, both sides want alternatives.

Conclusions / future research

Concern around lack of VC interest in studio startups appears overblown. There is already a large number of VCs with experience investing in venture studio backed startups. I expect this interest to continue, especially as more PE firms, hedge funds and family offices enter the space. On the other hand, not all of the previously funded startups will work out and some of those VCs may not continue to invest alongside venture studios.

For venture studios, the VCs who have invested in multiple rounds across multiple venture studio startups are probably good relationships to create.

For VCs, relationships with venture studios can be a source of proprietary dealflow of startups in well-diligenced markets, with experienced management teams and good governance structures in place.

I expect to cover this topic in more detail, especially how VCs, PE firms and family offices partner with venture studios in various ways. Please reach out if you have thoughts or are interested in more data here, and subscribe if you haven’t already for future updates.

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Venture studio news

Fractal Software, which specializes in b2b saas, has launched ~100 startups since being founded in 2020. Fractal does not publicize its startups, but the ones we’ve found in our database are workflow software and embedded fintech solutions for local service verticals like auto body repair shops, civic construction firms, HVAC, pest control, and school nurses (Michael Karnjanaprakorn on Twitter)

Enhance Ventures hosted a webcast on “The State of the Venture Studio World,” with good slides on funding and legal structures. One interesting statistic is that venture studios have raised over $21B, 50% of which has been raised by the top 5 studios:

(Youtube)

25madison, a New York based venture studio, launches its own brand experience agency, 25m Create. Several venture studios like Coplex and Dovetail extended from agency work to doing in-house incubations, and 25m Create is this extension in reverse. Agency work can be strategic as it leverages in house expertise to generate immediate revenue, and will likely serve as dealflow for future corporate co-build partnerships. More broadly, the “fully-scaled” studio generally pursues in house incubations, corporate co-builds, external vc investments and regional franchises (LinkedIn)

Redesign health publishes its company creation process, including phasing, partnership strategy and scoring framework:

(Redesign Health)

Founder of Wright Partners, a Singapore and Jakarta based venture studio focused on corporate co-builds, reflects on their first two years. One knock against the studio model is that VCs are reluctant to invest in studio startups due to their large initial ownership. However, Wright sees increasing interest from VCs, “for ventures that can leverage corporate unfair advantage paired with good governance and a financial return” (LinkedIn)

Blue Cross executive discusses a current need where they’re willing to pilot with a new startup. Also discusses general best practices for how to pitch and structure pilots with health insurance payers:

“One of the areas that I have spent a lot of time thinking about is disruption in pharmacy. Pharmacy costs now make up ~1/3 of our total medical spend, and this is increasing every year…A player to help with the contracting, distribution and outcomes that has different incentives than the traditional PBM model could help make more of these models emerge and even disrupt areas with meaningful gross to net bubbles (IYKYK) that have been historically difficult to make meaningful impact on. Reach out if you want to talk thoughts!”

(Out-of-Pocket)

Interesting job descriptions

Slimmer AI - B2B Healthcare | Founder in Residence

B2B Healthcare themes we've been excited by (so far) due to their potential for AI: 

Digitization of healthcare workflows (doctors/GP/physician-focused tech stack): Patient scheduling; data logging and clinical documentation; optimization of patient referral; recovery pathways; admin workflow optimization, preemptive diagnosis; intelligent process routing

Diagnostics and treatments (hospital/clinic-focused tech stack): Data integration, predictive analytics and clinical intelligence; clinical screening and diagnostics through data analytics; enhanced patient monitoring; tele health services; precision health, claims, and payment administration

Pharmaceutical tech stack: Automated clinical trial workflow and research; automated procurement and supply chain; ML-enabled drug discovery and research; precision medication and personalization of healthcare

Slimmer AI - E-commerce | Founder in Residence

E-commerce themes we've been excited by (so far) due to their potential for AI: 

Inventory management: Demand forecasting; inventory planning to prevent stock out and waste; preventive supply-chain risk detection; sustainability assessment

Customer personalization: Customer-specific recommendations; conversational customer discovery platforms, localized omnichannel customer experience; customer retention analysis; sentiment analysis/purchase prediction; personalized content creation

Sales optimization: Potential use-cases: Omni-channel revenue intelligence; assortment optimization; purchase, sales and discount pricing strategy; fraud detection; pricing and loyalty strategy analysis

Slimmer AI - Supply Chain | Founder in Residence

Supply Chain themes we've been excited by (so far) due to their potential for AI: 

Inventory management: End-to-end inventory visibility in real-time, demand sensing/forecasting, stock level analysis (under/over stocking), upstream delivery management and prediction

Procurement: Supplier/vendor management; strategic sourcing; asset tracking, maintenance, and management; contract management and spend analytics; procurement workflow optimization and automation

Logistics and warehousing: Tooling, optimization and automation of warehouses; Tooling, optimization and automation of transportation networks; route optimization and asset tracking; last-mile logistics network and analytics

Supply chain monitoring and orchestration: Predicting end-to-end supply chain lifecycle; distribution planning; Supply chain security and risk assessment; end-to-end orchestration platform

Founders Factory - Founder/CEO for Healthy Food Distribution Venture

Our vision is to create a network of fresh food automated “micro markets” underlying an engaging digital customer experience

Founders Factory - Tech Cofounder / CTO - Project Freebird

The Freebird Club is a peer-to-peer social travel and homestay club for the over 50s. It offers a new and accessible way of travelling for older people, a fun way to meet and enjoy social & cultural interaction at home & away, and a means to unlock value in their homes and earn income in later life. Positioned at the intersection of traveltech and agetech, where the silver economy meets the sharing economy, the Freebird Club seeks to address social issues such as loneliness, disconnection and lack of later life opportunities for older adults through a tech enabled community model.

Founders Factory - Tech Cofounder - Project Healthkey

HealthKey is an API-first platform that enables digital health companies (e.g. digital therapeutics, mental health apps, e-pharmacies) to be accepted and reimbursed by large payers (e.g. insurers, large employers, health plans). HealthKey aims to build a two-sided platform between payers and digital health companies to enable easier payment flows, procurement processes, and integration systems for both parties.

In essence, HealthKey could be described as the Okta or TrueLayer for the healthcare industry. Please find the full pitch here. 

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Key takeaways

• October was a stronger funding month than September

  • Across 1,767 studio startups we track in our database, new funding was >$500mm in October vs ~$150mm in September

  • Investors leading these rounds were Citadel, Left Lane Capital, MaC Venture Capital, Norwest Venture Partners, Primary, Tritium Partners, TTV Capital, and VI Partners

  • Note: we are considering developing a service that tracks (i) VCs who have backed venture studio startups, (ii) LPs who have invested in venture studios and (iii) early stage VC funds and their thesis areas. Contact data@venturestudioindex.com or reply to this email if interested

• No major exits in October

  • Team Launch, WattX and Wright studios sold startups last month

    • Terms were not disclosed

• Headcount growth across all studio startups was +1% in October, similar to September and August

  • 32% of active studio startups added employees last month, up from September and August

• Popular themes for studio startups raising money or growing headcount were: agtech, AI, consumer fintech, cloud/data, electric vehicles, healthcare, labor marketplaces and proptech

• At least 20 studios demonstrated a high “hitrate,” with >50% of their startups either growing or having exited. These studios span multiple strategies, geographies and end markets

Fastest growing studio startups

Studio startup summary metrics

Studio startup exits

WattX startup Statice AI, a Berlin based data privacy startup, was acquired by Anonos. Terms were not disclosed (Press Release)

Team Launch startup Follain, a beauty retailer, was acquired by Credo. Terms were not disclosed (Bizjournals - $)

Wright Partners startup Comeby, a Kuala Lumpur based retail analytics SaaS tool, was acquired by Maxis. Terms were not disclosed (Digital News Asia)

For more detail, see: the largest all time venture studio startup exits.

Studio startup fundraises

Team Global startup Volocopter, which is developing eco-friendly air taxis in Germany, raised $175mm from the Saudi government (Press Release)

Kairos startup Bilt, a rewards app for renters, raised $150mm at a $1.5b valuation. Left Lane Capital led the round, with participation from Smash Capital, Wells Fargo, Greystar, Invitation Homes, Camber Creek, Fifth Wall, and Prosus Ventures (FinTech Global)

Sutter Hill startup Sila Nanotechnologies, which makes batteries for electric vehicles, received a $100mm grant from the US DoE (Crunchbase)

Coplex startup Qwick, a hospitality labor marketplace, raised $40mm. Tritium Partners led the round, with participation by current investors Album VC, Kickstart, Desert Angels and Revolution’s Rise of the Rest Seed Fund (Techcrunch)

Madrona Venture Labs startup Xembly, an AI meeting assistant, raised $15m. Norwest Venture Partners led the round, with participation from Lightspeed Venture Partners, Ascend, Seven Peaks Ventures, and Flex Capital (Geekwire)

Citi Ventures startup Onward, a fintech tool for co-parents, raised $10mm. TTV Capital led the round with participation from Lerer Hippeau, Citi Ventures, Correlation Ventures, and Gingerbread Capital (Press Release)

Atlanta Ventures startup Greenzie, which makes robotic lawnmowing software, raised $8mm as part of a strategic partnership with the Bobcat Company (Hypepotamus)

Diagram Ventures startup Retirable, a retirement planning service, raised $6mm. Primary led the round, with participation from Vestigo Ventures, Diagram, Portage and Primetime (Techcrunch)

Rocket Internet startup Flash Coffee, a Singapore based grab-and-go coffee chain, raised a $5mm extension from Citadel and Vulpes Ventures (Deal Street Asia)

Merantix startup Vara, which is developing automated medical radiology screening in Berlin, raised a €4.5M extension. VI Partners led the round, with participation from EQT Foundation, Med 360, AI Venture Studio, Merantix, as well as Think Health (FinSMEs)

BBVA Anthemis startup DwellWell, a homebuying guidance startup, raised $4.5mm from MaC Venture Capital (BuiltInLA)

Venture studios with highest hitrate (exits + growers)

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we used employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring. More recently, it’s common for even high performing startups to limit hiring or reduce headcount to prepare for future macro conditions.

Not all funding or acquisitions are announced, and those cases will be undercounted in the summary metrics above.

We measured startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

Conclusion

The data from October compares favorably to September. While exits remained weak, funding was stronger as was the portion of startups adding headcount.

As mentioned in prior posts, the most optimistic metric is the 20+ studios who demonstrate a 50+% hitrate on their startups, which bodes well for their ability attract future founders and more LP capital. The fact that these studios operate across various geographies and end customer markets suggests there may be room for even more studios.

The successful firms above all have large in-house teams, which require a large operating budget and LP base. Several of these firms - such as Greylock, Sutter Hill and Thrive - are venture capital funds with an incubation arm. Since capital is an advantage in incubations and having proprietary access to deals is an advantage in raising capital, we may see more asset managers pursue incubations.

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Venture studio news

Purpose Built, an NYC based venture studio, shared their ideation rubric. I found their rating categories very interesting, especially: “ease of de-risk quickly inside the studio without too many resources”

(Purpose Built Blog)

Bilt Rewards, a startup launched out of Kairos studio, is now a unicorn thanks to $150mm of funding led by Left Lane Capital. The company partners with property owners to provide a rewards program and no-fee credit cards to renters. Kairos is an example of “low volume, hands on” studio: the CEO of Bilt Rewards is also the CEO of Kairos (Techcrunch)

Lists of startup ideas around generative AI. Models like GPT-3, Stable Fusion and DALL·E 2 have the potential to disrupt many different verticals within professional services, and two investors speculate on which markets are most ripe for disruption from this new technology (Elad Gill, Sarah Guo)

Johns Hopkins looking for venture studio partner

A technology development leader at Johns Hopkins is looking to speak with venture studios with experience launching software companies in AI, cybersecurity or digital health, to discuss bringing a few of their internally developed technologies to market. Message me on LinkedIn or Twitter if you’re interested, and I’ll pass along your info.

Interesting tools

GummySearch mines reddit for startup ideas and potential customers looking for solutions (GummySearch)

OpenVC, which facilitates connections between startups, VCs and LPs, announced this week that venture studios can add themselves on their database (OpenVC)

Interesting jobs

Platform Venture Studio - Founder in Residence, Clean Energy Homes

“Many homeowners could reduce their carbon footprint by turning their homes into clean energy homes. However, the process can be overwhelming and expensive. Homeowners may not know what to do, how to prioritize the work, what incentives and financing options exist, and what contractors to use. The result is often inertia.

On the supply side, there are inefficiencies and lack of up-to-date sustainable & clean energy education and best practices. It is usually up to the homeowner (or a savvy contractor) to discover resources from a wide range of websites. Being able to spot scams is a concern.

We are looking for a founder who is interested in designing a one-stop shop solution for the home electrification journey.”

SuperLayer - Founder: Style-to-Earn in partnership with Paris Hilton

“SuperLayer and M13 are partnering with Paris Hilton and 11:11 Media to build a new content and commerce platform connecting fashion creators, their fans, and the brands they support. The fashion industry as a whole has shifted from an exclusive to an inclusive form: consumers now express their opinions daily on social media with an ‘OOTD’ and ‘GRWM’. We see an opportunity to create a one-stop shop for fashion discovery and curation, where a sticky web2 UX meets the shared economics of web3.”

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Database additions

This week we added 5 additional venture studios to the database, which now totals 377 studios and 1,767 startups.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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Venture studio news

Juxtapose is building platforms to rollup mom-and-pop businesses in local services categories, starting with HVAC:

The HVAC company Juxtapose is building, codenamed Project Zephyr, aims to combine the best of both the VC and PE worlds. The firm will buy independent HVAC businesses, primarily in the US Midwest, and merge them into one company. Project Zephyr will build technology not just for ordering services but also for helping technicians to manage their workflow. The acquisitions will require a significant investment of hundreds of millions of dollars over the company's lifetime, Miller said. For now, Juxtapose will make the acquisitions out of its current $300 million fund, which it raised in 2021. But Miller believes they will pay off as Juxtapose builds a tech platform around them, with the aim of creating a transformative experience for customers and workers alike. That's what distinguishes Juxtapose's strategy from the typical private-equity approach, in Miller's view. "You don't typically hear about CEOs being excited to go to private-equity firms to innovate," he said.

PE firms love services business rollups, but the hardest part is finding the right platform business to start with. Building modern platforms from scratch is a novel application of the venture studio model, and I expect to see more. Venture studios regularly build startups that match popular VC funding themes, seems no reason why they can’t build for private equity strategies as well.

Local services is a difficult category for pure tech businesses, where customer acquisition is expensive and there’s low barrier to entry for competition. However, M&A rollups in industries with sticky customers where technology can improve economics could be a promising category for venture studios.

Of course, there will be competition. Within HVAC specifically, there is another tech-enabled, VC backed rollup - PipeDreams - backed by Canvas Ventures and led by a team from Nextdoor, Bain and Roto-Rooter.

Local services is a large category with room for multiple winners. The key question is the extent to which technology enables these services businesses to run more efficiently, and afford a higher multiple for local services businesses than your average PE-backed acquiror. And whether the technology must to be developed internally, or if it can simply be licensed from third parties.

(Business Insider - $)

Vault Fund, a fund-of-funds focused on the venture studios, argues the best term to describe this asset class is “company creation funds:”

“We’ve found that the term “venture studio” is too ambiguous and means different things to different people. In fact, we’ve seen creative agencies and accelerators describe themselves as venture studios, despite not being company founders and in some cases not even taking equity for their involvement in the companies….These entities must have ground-level, founding ownership stakes. Company creation funds are entities that create their own portfolio of companies with founding roles at entry level valuations backed by resources and processes to go-to-market at faster speeds.”

(Vault Fund website)

Twitter thread by the co-founder of On Deck debating the merits of offering higher cash compensation to access a larger pool of potential founders/EIRs who need to offset their personal fixed costs (Erik Torenberg on Twitter)

Content marketing piece from a studio startup founder: “Why I left Google to co-found with super{set}” (blog post)

Interesting tool

“The tools we use to de-risk startups faster” by Pioneer Square Labs. Demos a prospecting and outreach tool the firm has developed internally to streamline customer discovery. (PSL blog)

Interesting job descriptions

25madison - Chief Clinical Officer of Stealth Behavioral Health Company

“We are working to collaborate with primary care providers to create easy access to mental healthcare, specifically targeted at older adults. We use an integrated behavioral health model and collaborate with providers to ensure patients receive the best care.”

Redesign Health - Director of Investor Analytics and Strategy

Shows an impressive level of sophistication on fundraising operations, including:

“Maximize Capital Development business development team’s time spent selling by minimizing low impact non-selling activities…Develop evidence-driven client contact strategy recommendations…Rigorously track and manage sales funnel performance metrics, unearthing key metrics, sales effectiveness insights and opportunities to optimize funnel and drive results…Support sales strategy by identifying the most attractive opportunities based on value and probability of closing”

Submit new venture studio roles to jobs@venturestudioindex.com or reply to this email

Database additions

This week we added 4 additional venture studios and 8 startups to the database, which now totals 372 studios and 1,770 startups.

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Key takeaways

• Venture studio startup funding and exits were relatively weak last month

  • Across the 1,750 studio startups we track in our database, new funding was ~$150mm

    • While some VCs avoid studio startups due to large studio ownership, the investors leading these rounds include Lux Capital, Access Capital, Nomad Ventures, BTG Pactual, CommerzVentures, MTIP and Siddhi Capital

    • Startups raising money last month were primarily focused on CPG and consumer

  • Founders, High Alpha and Sunray Ventures sold startups last month

    • Terms were not disclosed

• Headcount growth across all studio startups was +1% in September, flat from +1% in August

  • The fastest growing startups were in biotech, b2b software, cybersecurity, healthcare and labor marketplaces

  • These are crowded VC categories, and several studio startups with shrinking headcounts also fell into these themes

• At least 19 studios demonstrated a high “hitrate,” with >50% of their startups growing over the last 3 months

  • These studios all have large in-house teams (20-120+ people)

  • Studios are able to demonstrate a high hitrate across differing geographies, end market focus and rate of startups launched

  • A high hitrate should help studios recruit future founders and attract more LP capital

Fastest growing venture studio startups

The following table includes US based startups who grew headcount the fastest over the last three months:

The fastest growing startups primarily operate in biotech, cybersecurity, healthcare and labor marketplaces.

Studio startups fundraises

Science startup Liquid Death, a canned water brand, raised $70mm at a $700mm valuation. Science led the round with participation from Live Nation, PowerPlant partners, Access Capital and Nomad Ventures (Techcrunch)

Atomic startup OpenStore, an ecommerce rollup, raised $32mm at a $970mm valuation. Lux Capital led the round (Techcrunch)

Fisher Venture Builder startup Ali Credito, a Brazil based consumer lending service, raised R$135mm (~$26mm USD). BTG Pactual led the round (Terra)

BBVA Anthemis startup Cledera, a London based subscription management software company, raised $20m. CommerzVentures led the round with participation from Carbide Ventures, Massive, Nauta Capital and Notion Capital (Capital Riesgo)

Kamet Ventures startup Apricity, a Paris based virtual fertility clinic, raised €17mm. MTIP led the round with participation from Iris Ventures (Sifted)

Saturn Five startup Aura Bora, a sparkling water brand, raised $8mm. Siddhi Capital led the round with participation from Consumer Ventures, Gaingels, Seaside Ventures and Simple Food Ventures (Food Business News)

Pioneer Square Labs startup Boltive, an advertising monitoring company, raised $7.5mm (Crunchbase)

Studio startup exits

Founders startup Kontist, a banking app for freelancers, was acquired by Ageras Group. Terms were not disclosed (The Payers)

High Alpha startup Structural, a workplace connectivity platform, was acquired by Augeo. Terms were not disclosed (Press Release)

Sunray Ventures startup Daystar Power Group, a Nigeria based power company, was acquired by Royal Dutch Shell. Terms were not disclosed (Reuters)

Venture studios with the highest hitrate

Demonstrating a high “hitrate,” or ability to consistently launch successful startups, is an important selling point to potential founders and LPs.

We estimated hitrate by: (i) finding all the startups for each studio who grew employees over the past 3 months, (ii) adding any startups who have been acquired or IPOed, and (iii) dividing that sum by the total number of startups launched by that studio.

The studios where the majority of their startups have either exited or continue to grow include:

High hitrate studios focus on both B2B and B2C, operate in different geographies and launch startups at different rates. It appears the only requirement for a studio to demonstrate a high hitrate is having a large in-house team between 15 and 120+ employees.

The above data is based on LinkedIn headcount, which is imperfect and incomplete. This analysis may slightly undercount newer studios who have not yet explored exits and also excludes studios who are no longer operating but demonstrated a high hitrate in the past. See the methodology section below for more detail.

For more detail on exits, see: the largest venture studio startup exits.

Methodology and data limitations

Startup and studio data comes from our database of venture studios and their startups. See data methodology and limitations for more background.

In this analysis we used employee counts as a proxy for traction, but this is an imperfect metric. Some startups accelerate hiring ahead of revenue and other startups may be growing revenue quickly but have not accelerated their hiring.

We measured startups / year or startup velocity by taking the number of startups launched since 2017 and dividing by 5. This figure undercounts studios who do not disclose all their startups.

We focused on private companies and excluded IPOed or acquired ventures. Studios likely exited their stakes in those circumstances.

In the first table, we highlighted the startups who have at least 30 employees and added the most headcount over the past 3 months a % basis. This limitation excludes some recently launched startups with small teams but scaling quickly.

Conclusion

The data from September is both bullish and bearish for startup studios.

Funding and exits were weak, and the most action was in CPG and consumer. There were no major exits last month.

Headcount across all studio startups grew 1% overall. We saw similar growth in August, down from 2% m/m in July.

The most bullish metric: 19 different venture studios have the majority of their portfolio either exited or continuing to grow, which should bode well for their ability attract future founders and more LP capital. The fact that these studios operate across various geographies and end customer markets suggests there may be room for even more studios.

The 19 successful firms above all have large in-house teams, which require a large operating budget and LP base. Several of these firms - such as Greylock, Sutter Hill and Thrive - are venture capital funds with an incubation arm. Since capital is an advantage in incubations and having proprietary access to deals is an advantage in raising capital, we may see more venture capital firms pursue incubations.

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Venture studio news

High Alpha partners with Twilio to launch Stitch, a consultancy helping marketers integrate Twilio’s products. Twilio provides developer-friendly messaging tools, while companies like Braze build software on top of Twilio to serve business users on marketing teams at large companies. Twilio customers skew earlier stage and pay $10-15K annually on average, while Braze customers skew enterprise and pay ~$215K. Stitch may help Twilio bolster adoption among mid-market and enterprise marketing teams who don’t have the technical resources to build on top of Twilio directly. There’s likely an opportunity for more developer tool companies to partner with studios to launch startups facilitating enterprise business user adoption (press release)

LinkedIn thread on the cashflow pain of the venture studio model, discussing the need to sell a stake in the GP early on (Jeff McDermott on Linkedin)

Interesting job descriptions

Prufrock Labs - Business Athlete

“You’ll dig into the market opportunity, draw up a business case, draft an Amazon style 6-pager. And once your business gets funded you’ll act like a founder for that business as we take it to market and drive scale. You’ll wear hats of product manager, business analyst, business development, market research. And if you put your finger on an idea that you find particularly exciting and you prove yourself to the team, maybe you will even run that business as founder.”

Note: Prufrock Labs is a new venture studio founded by two former Amazon executives

Pioneer Square Labs - Future CEO: Modern Factoring Company

“Minca is a FinTech company with a mission to enable government contractors to thrive by giving them access to affordable capital. Minca will focus its initial offerings on a factoring solution to contractors who fulfill construction work orders for the government, but could later expand its offerings and become a one-stop-shop to give financial and operational solutions to small businesses.”

AI Fund - CEO/Co-Founder: Zest Intelligence

“Zest’s mission is to improve the lives of users by guiding them through incremental lifestyle changes that build healthier habits resulting in natural and sustained weight loss. This is accomplished through evidence-based education, cognitive-behavioral interventions, and building healthier habits through daily guidance and progress tracking. The approach has been shown to shift the user’s mindset, making willpower unnecessary for behavioral change. Zest partners with other health, wellness, and related providers (ex: insurance companies) to distribute their mobile health solutions at scale.”

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Database additions

This week we added 5 additional venture studios and 6 startups to the database, which now totals 368 studios and 1,762 startups.

Submit studios and startups to data@venturestudioindex.com or reply to this email

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