June 2023 | Community Newsletter
Hello,
Welcome back to the Houghton Street Ventures Community newsletter, our monthly update on what’s happening within the LSE startup and venture ecosystem.
Today, we are reflecting on the first half of 2023, sharing insights on the tumultuous start to the year within the LSE (and global) startup funding landscape. 2023 hasn't been the easiest of times for startup founders, but amid the challenges, there are plenty of silver linings.
If you’re interested in learning more about Houghton Street Ventures, we’d love to hear from you. Or if you have ideas about future content or collaborations, just hit reply!
H1 2023 in Review… Economic Silver Linings Playbook
Six months ago, in our review of the LSE entrepreneurial ecosystem for 2022, we wrote of how different it felt from the euphoria of 2021, but felt hopeful in general as we continue to track more and more founders in these challenging times. And although some of the macro-level statistics look a little subdued, there are huge successes to be found in the micro.
Jan-March 2023, in terms of volume, was low. You would have to go back to Q1 2015 to find a quarter with fewer deals announced, but we appear to have bucked the trend, with Q2 bouncing back by 25% from Q1 — and Q2 deal volume only 25% below the 2015–2020 quarterly average. Is it too soon to suggest that the worst of it may now be over? All of this said, knowing June was the strongest month of the year so far.
At Houghton Street Ventures, we go earlier than looking at funding round announcements as we regularly monitor and speak with founders on day one of their journeys. As such, we collect data on how many companies are being started, and I’m afraid the trend here is similar. However, the data likely shows us something else if we look closely enough…
The funding round drop from 2021 to 2022 of 30% looks similar to the drop in the number of companies founded from 2020 to 2021 of 35%.
The funding round drop from 2022 to 2023 of 40% looks similar to the drop in the number of companies founded from 2021 to 2022 of 35%.
So with a smaller drop of 15% (at the halfway mark) in the number of companies founded from 2022 to 2023, perhaps, with the one-year lag we see above, we get some insight into what the future might hold for future funding rounds with stabilisation into this ‘new normal’.
Additionally, to provide some context to the funding round drop the LSE ecosystem has experienced from 2022 to 2023, this is very much in with what we have seen in the global venture capital market — approximately 50% down (in USD terms) from H1 2022 to H1 2023, as discussed here on Crunchbase.
Community News & Updates
Houghton Street Ventures
Adam and Hannah were featured in Sifted, discussing the burgeoning trend of alumni-focused VC funds in the UK and Europe. Although we're not merely 'backing our schoolmates', we're excited to showcase Houghton Street Ventures' innovative approach to building a venture fund in partnership with a University. And sharing more of how our unique platform approach leverages the power of the school's network to pinpoint and invest in outstanding founders while offering them unparalleled access to LSE alumni for capital, talent and opportunities.
Big Deals
Rever - founded by Marius Montmany - raised a €7.5m Seed round from Mundi Ventures
Dexory - founded by Oana Andreea Jinga - raised a €17.3m Series A led by Atomico
GetHarley - founded by Charmaine Chow - raised a £52m Series B led by Index Ventures
NuvoCargo - founded by Deepak Chhugani - raised a $36.5m Series B led by QED Investors
Warp - founded by Zach Lloyd - raised a $50m Series B led by Sequoia
Synthesia - founded by Steffen Tjerrlid - raised a $90m Series C led by Accel
🦄 Congratulations to the Synthesia team on becoming LSE’s 27th Unicorn!
In the News
Alice Pelton and The Lowdown made the news again, this time on Channel 4 with Davina McCall, where they are featuring on a new documentary on contraception
Synthesia made it to the Nasdaq board in New York, and their $90million Series C picked up a lot of press as they became LSE’s 27th Unicorn
Rever featured in TechCrunch with how they’re helping e-commerce brands to minimise and manage their refunds and returns
Speakeasy appear in TechCrunch after emerging from stealth with their AI-powered API creation and distribution for developers
Meet the Team
The team will be in:
New York: 19 - 23rd July and again from the 16th to 24th September
If our paths cross or if you’re swinging by London, come visit us in the 5th floor of the LSE library - we’d love to catch up, let us know!
Best,
Hannah, Adam, and David