Venture studio exits, fundraises and headcount growth in September
Venture studio exits, fundraises and headcount growth in September
Welcome to Venture Studio Index - data and research on the venture studio industry. The free, public database of venture studios and their startups is here. If you aren’t subscribed, join the hundreds of studio executives, EIRs and future founders reading each week:
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.