[Array VC] Exciting Reads, Industry Updates, and Investment & Job Opportunities

New Investments, Exits, IPO, M&A, Valuations, Market Observations, & More...

Array Ventures (website) invests in enterprise data/AI companies in their first ever raise. These tend to be companies raising a round for the first time and in many cases just incorporating as we commit to investing in them.

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Welcome New Investments to the Array Family

• Tellen - Audit Workflow

• Stealth - AI Customer Experience

We are still investing connect with us (arraydeals@array.vc) if you are know anyone starting a B2B data/AI company.

State of the Exits:

• A Fund 2 company PrecisionGX was acquired by Trend Health. This is the third Fund 2 acquisition. First 2 were by Era Software acquisition by ServiceNow in 2022 and Tank Utility acquisition by Generec in 2021.

• Fund 1 didn’t have any exits in Q3 but it has 8 exits so far from amazing enterprise public company logos such as  Pulse by Gartner, Art19 by Amazon, PassageAI by ServiceNow, Simility by Paypal, Zecops by JAMF and two others Wootric and Lennd by PE backed companies.

Portfolio Notable News & Follow-on Rounds:

• Overview announces OV20i an AI-enabled All-in-one vision inspection system

• Openprise introduces DataOps for RevOps

• RadAI wins AuntMinnie’s best New Radiology Software award for 2023

• EmpInfo is now the preferred income and employment verification solution for UKG Ready customers

• Capsule introduces AI-powered video editor for enterprises

• Blumira wins “SIEM Solution of the Year” in 2023 Cybersecurity Breakthrough Awards Program

• GraniteRock, Georgia-Pacific, CalPortland awarded Environmental Team of the year at Mapistry Annual Summit

• Cast.app launches AMA feature for the quick information on your business

• Gartner recognizes OpsVerse as a representative vendor in the Market Guide for Internal Developer Portals

• Uniform’s New Enterprise Visual Workspace Unifies Content, Data, AI and Technology in a Single Cloud for Marketers

• Fedex announces an investment in Vue.ai

• Zendar announces partnership with NXP Semiconductors along with their $30M raise.

• Oro Labs closed a $34M Series B round led by Felicis Ventures

*Few others that haven’t been announced yet but you will hear about it soon!*

Job Opportunities At Array’s 58 Portfolio Companies

Our companies are hiring and looking for Engineers (leads and IC’s), Sales, Customer Success, Marketers, Designers and more globally including many remote openings. Check out all the listings here.

Market Observations From An Early Stage Startup Investor

The startup funding landscape in 2023 has been characterized by a significant slowdown compared to previous years, with total funding down by around 42% compared to 2022. There are a number of factors such as the rising interest rates, geopolitical tension, and economic uncertainty that have contributed to the slowdown in startup funding in 2023. The slowdown in startup funding has had a significant impact on the startup ecosystem. Many startups are struggling to raise capital, which is forcing them to cut costs and lay off employees.

Despite the overall slowdown, there are still some startups that are able to raise large amounts of capital. These are typically startups that are addressing large and growing markets such as AI, Climate tech, and Healthcare. Startups in these verticals have managed to raise and monopolized the funding dollars. This has led to a situation that some have described as "feast or famine," with some startups still able to raise large amounts of capital while others are struggling to secure any funding at all. Larger funds are still sitting on record-high levels of dry powder ($280B in Q2’23) and are eager to deploy them, but they are looking for higher quality companies with valuations at rounds that are attractive for today’s venture market conditions.

Here are the high-level trends we see in the market. The general thesis is that the larger firms will retreat to their traditional funding stages that they play in which would bring sanity to the early stage market.

-       Seed is Shrinking: In Q3’23 we see the first significant QoQ dip in deal sizes and valuations, at both the top-decile and median seed rounds. Up until now, the seed market has been propped up by multi-stage firms entering the category. Multi-stage firms were involved in 36% of all seed deals in 2022. We are beginning to see the first signs of those multi stage investors leaving seed in pursuit of later stage deals. Nonetheless, valuations will remain high until we see the supply of seed capital provided by multi-stage firms decrease substantially over the next few quarters.

-       Slight Uptick for Late-Stage Investors: Late-stage venture funding on a deal value basis has ticked upwards slightly on a year-on-year basis in Q3. However, overall deal count is still declining. This has been largely due to one major deal: Anthropic’s $4B round with Amazon. We are hearing that investors are increasingly shifting their strategy towards later-stage rounds where the market conditions are in their favor. 

-       Slight Opening in IPO Market: The IPO market has shown signs of opening up, albeit modestly. Both Instacart and Klaviyo listed at lower share prices than their previous VC round, despite having revenue growth and being profitable. These listings illustrate some of the challenges that even best-in-class companies face if a listing is their next financing option. Current multiples are well below where many companies raised during 2020-2021, which means that companies often have to face an IPO listing at a lower valuation hurdle than their last round. 

-       Growing Corporate Venture Capital: Corporate venture capital activity has increased as a proportion of overall VC deal value, surging to 63%. This suggests that CVCs are investing dollars and we have seen new CVC’s start new funds as well. 

Thank you for reading. As always, please reach out with any questions. Wish you a joyful holiday season.

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