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7 April 2026The UK government has expanded three entrepreneurship tax relief schemes effective 6 April 2026. The changes, introduced by Chancellor Rachel Reeves at Budget 2025, are expected to unlock around £100 million of additional private investment per year.Enterprise Management IncentivesThe gross assets test for EMI eligibility has been quadrupled from £30 million to £120 million. The employee limit has been doubled from 250 to 500, and the company share option limit doubled from £3 million to £6 million. The expansion is expected to support around 1,800 high-growth scale-up companies across fintech, life sciences and AI over the next five years, covering an estimated 70,000 employees.Enterprise Investment Scheme and Venture Capital TrustsThe EIS and VCT lifetime company investment limits have doubled to £24 million. Annual company investment limits have increased to £10 million. The gross assets test has increased to £30 million before share issue and £35 million after. Income Tax relief for VCT investors has been reduced from 30% to 20% to better align upfront relief with EIS and to direct capital toward higher-growth companies.UK Listings ReliefA three-year exemption from Stamp Duty Reserve Tax has been introduced for companies listing in the UK. The government describes this as an international first. The measure is intended to support trading volumes and share prices of UK scale-ups proceeding to a public listing.British Business BankThe British Business Bank has published a new Five-Year Strategic Plan with a permanent financial capacity of £25.6 billion. The BBB will invest at least £5 billion in growth-stage funds and scale-up companies. The government has asked the BBB to explore using its existing financial guarantee capacity to support IP-backed lending.Call for EvidenceA Call for Evidence on tax policy support for investment in high-growth UK companies, launched at Budget 2025, closed in February 2026. The government has said it will respond in due course.Source: <a href="https://www.gov.uk/government/news/britains-innovators-backed-with-around-100m-of-new-investment" rel="noopener noreferrer" target="_blank">https://www.gov.uk/government/news/britains-innovators-backed-with-around-100m-of-new-investment</a>--Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on deal-making, privately, directly without intermediaries <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank" style="color: rgb(37, 99, 235);">www.newnex.io</a>

UK Expands EMI, EIS and VCT Tax Relief Schemes for Startups and Scale-ups

9 April 2026The core fund investing team from Sapphire Partners, the LP investing arm of Sapphire Ventures, is joining LGT Capital Partners' venture capital platform. The move was announced on 7 April 2026 and is effective 15 April 2026.The team is co-led by Beezer Clarkson and comprises six investment professionals in total. Clarkson brings more than 20 years of experience in US and global venture capital fund investing.Sapphire Partners has operated as an LP investor for nearly 15 years, committing over $1.2 billion across more than 200 funds. Sapphire Ventures, the parent firm, is an enterprise AI-focused venture capital firm with over $10 billion in assets under management.Sapphire Ventures has stated it will continue to manage and deploy more than $2 billion in existing fund investments, with support from the transitioning team members at LGT Capital Partners during the handover period. The firm's target markets for those investments remain early-stage venture firms in the US, Europe and Israel.For LGT Capital Partners, the addition strengthens its US venture capital presence. The firm has been active in venture capital investing for nearly three decades and maintains relationships with more than 400 venture capital managers globally. Its venture capital team is already spread across Europe, both US coasts and the Asia Pacific region.Thomas Kristensen, Partner at LGT Capital Partners and responsible for the firm's venture capital team, said: "Expanding our venture capital platform in the US is a strategic priority for LGT Capital Partners. The investment professionals joining from Sapphire Partners bring a well-established track record, deep relationships across the global venture market and strong alignment with our long-term view and partnership-oriented culture. The addition significantly strengthens our ability to identify and evaluate best-in-class venture managers for the benefit of both current and future clients."Beezer Clarkson said: "I've known the LGT Capital Partners team for over a decade and have long observed its thoughtful approach to fund investing. From the outset of our discussions, it was clear our teams share a long-term investment philosophy, a commitment to building durable partnerships, and a focus on delivering differentiated outcomes for clients."LGT Capital Partners manages over $120 billion in assets under management and serves more than 700 institutional clients across 50 countries. The firm is privately held and owned by the Princely House of Liechtenstein, headquartered in Pfaeffikon, Switzerland.The announcement follows a separate expansion move by LGT Capital Partners in December 2025, when the firm entered a strategic partnership with Invesco to develop private markets solutions for the US wealth and retirement channels.--Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on deal-making, privately, directly without intermediaries <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank" style="color: rgb(37, 99, 235);">www.newnex.io</a>

Sapphire Partners Funds Team Joins LGT Capital Partners Venture Platform

March 2026GP stakes as a concept is not new. Minority ownership stakes in fund management companies have existed since the early 2000s, and Goldman Sachs raised the industry's first dedicated GP stakes fund nearly two decades ago. Blue Owl, formerly Dyal Capital, built an entire business around the strategy starting in 2010. What is new is the scale, the velocity, and who is now doing it.According to a recent report by Campbell Lutyens, GP stakes and GP M&amp;A transactions reached record levels in 2025, with deal volume increasing 40% year on year. The research recorded 164 private markets GP transactions in 2025 versus 117 in 2024. That is not a niche strategy quietly running in the background. That is a market segment moving into the mainstream of how institutional capital thinks about manager relationships.The reasons are not complicated. A GP stake gives an investor participation in management fees, which produce predictable cash flows independent of exit activity, plus a share of carried interest across every fund the firm raises going forward. For sovereign wealth funds with long deployment horizons and capital that needs to be working across market cycles, those characteristics are genuinely attractive in a way that LP commitments alone do not provide. Academic research on the space confirms that sovereign wealth funds are among the most frequent acquirers of GP stakes, and the probability of an investor being a GP staker increases significantly when that investor is a sovereign wealth fund.Abu Dhabi is the most documented example of this shift, but it is not the only one. Saudi Arabia's Public Investment Fund has acquired stakes in manager relationships through its tech arm Sanabil, including a position in NEA that was first sold to a Kuwait-backed firm in 2020. Qatar's sovereign wealth fund is an expanding participant across technology-focused managers. The pattern is consistent across Gulf capital: LP commitments at scale, supplemented by equity ownership in the managers themselves as the mechanism for building deeper, more durable relationships.The Lunate stake in Insight Partners, disclosed through a workplace lawsuit rather than any voluntary filing, is the clearest recent illustration of how this works in practice. Lunate, which manages over $115 billion and sits within Sheikh Tahnoon bin Zayed's investment network, has owned a piece of Insight's management company since January 2025. Insight manages over $90 billion and holds positions in OpenAI, Anthropic, Databricks, and Wiz. The stake is described by sources as under 2%, but the structure is what matters. Lunate is not just an LP in Insight funds. It is an equity owner in the firm that manages them, which is a different economic and relational position entirely.Mubadala took a minority stake in Silver Lake in 2020 and simultaneously announced a 25-year collaborative investment strategy alongside it. Judan, IHC's newly formed financial services holding company, acquired a 50.1% controlling stake in Alpha Wave Global in March 2026, gaining structural exposure to a $29 billion manager with direct equity positions in SpaceX, OpenAI, Anthropic, and Cerebras. These are not isolated transactions. They are a deliberate approach to private markets access that goes well beyond what any LP agreement can produce.The distinction between an LP commitment and a GP stake is one that does not get enough attention in how institutional investors talk about manager relationships. An LP commitment gives you exposure to a portfolio for the life of one fund. A GP stake gives you a share of management fees and carried interest across every fund the firm raises going forward, regardless of vintage. It creates a different quality of relationship with the firm's leadership, one where your interests are aligned with the health of the business itself rather than just the performance of a single pool of capital. In practice, as has played out at Silver Lake and Carlyle, these stakes become the foundation for co-investment pipelines and deal access that no LP agreement alone produces.The market is also expanding beyond the sovereign wealth fund base that historically drove it. In 2025, Ardian, Mubadala's investment arm, General Catalyst, and Accel-KKR all sold minority stakes in themselves. PitchBook recorded $3.4 billion in GP stakes deals globally in 2024, the highest level since the record year of 2021. The legal infrastructure around these transactions is growing in parallel. Weil Gotshal brought in a dedicated GP stakes partner from Kirkland in March 2026 specifically to handle the volume of upper-tier transactions moving through the market.There is also a structural shift in what kinds of transactions are getting done. Where the early GP stakes market was dominated by non-controlling minority positions, the trend in 2024 and 2025 moved toward controlling and strategic acquisitions. PitchBook noted that non-control transactions comprised less than half of deal flow in 2024, with large asset managers increasingly pursuing outright platform acquisitions rather than passive minority stakes. Judan's controlling position in Alpha Wave is a direct example of that direction.The Insight situation made this dynamic visible only because litigation forced disclosures that would never have been made voluntarily. Most of these arrangements sit inside Delaware LLCs and SPVs that the SEC has no obligation to surface below a 25% ownership threshold. The actual number of management company stakes held by sovereign wealth funds and large institutional investors is almost certainly larger than what is publicly known.The question for the market is no longer whether GP stakes belong in an institutional portfolio. The deal volume, the participant base, and the economics have settled that. The question now is how central the strategy becomes as sovereign capital continues moving from the LP seat into the ownership structure of the firms that manage the world's private markets capital.The data suggests that transition is already well underway.--Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on privately without intermediaries. <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank" style="color: rgb(37, 99, 235);">www.newnex.io</a>

Owning the Manager, Not Just the Fund: How Sovereign Capital Is Reshaping Private Markets from the Inside

Private Credit: What It Is, How It Grew, and Where It Stands Today

March 2026 | Based on McKinsey x IVCA LP Survey, November 2025India has quietly become the most attractive private market destination in Asia-Pacific. In a survey of more than 50 global limited partners, 31% ranked India first and 76% placed it within their top three choices across the region. That is a meaningful shift from just a decade ago, driven in large part by China's contraction. India's share of Asia-Pacific PE and VC deployment has grown from around 12% between 2015 and 2019 to about 21% from 2020 to 2024.The headline numbers back the sentiment. PE and VC deal activity expanded 1.6-fold to $207 billion between 2016-20 and 2021-25, while exits more than doubled to around $120 billion. Private capital as a share of GDP has more than doubled in the past decade, reaching 1.42% in 2025.Two types of LP, two readings of the same storyThe survey reveals a clear split between high allocators, who view India as a complex but scalable opportunity, and moderate allocators, who approach it with considerably more caution. Both groups broadly agree on India's strengths: political and economic stability, strong entrepreneurial talent, and domestic consumption as a structural driver. Where they diverge is on governance quality, regulatory consistency, and foreign investment policy. High allocators view exit potential, availability of quality targets, and depth of capital markets as relative strengths, while moderate allocators score these factors lower and in some cases weaker than other markets.On manager selection, the difference is just as sharp. High allocators prioritise deal pipeline quality and risk-adjusted IRR. Moderate allocators focus on a longer checklist including exit record measured by DPI, governance and disclosures, and management fees.Where capital is goingSector concentration remains pronounced. Almost three-quarters of PE capital in India was concentrated across five sectors from 2021 to 2025: technology (29%), financial services (15%), IT and IT services (13%), pharmaceuticals and healthcare (10%), and consumer goods (6%). LP preferences show no sign of broadening beyond this core, with pharma, new technology, and financial services dominating across buyout, growth, and venture strategies alike.On strategy, buyout and growth approaches are most preferred over the next five years, scoring 7.8 and 7.7 respectively on a ten-point scale, with venture at 6.4 and seed at 5.3. Control-oriented buyout strategies are particularly appealing for their influence over exit timing, which directly addresses the exit risk concern that moderates keep raising.Co-investment has become a significant part of the picture. Around 60% of surveyed LPs have participated in co-investments in India, and 54% of those reported outperformance relative to underlying fund investments, with another 42% reporting performance on par with fund investments.India-dedicated GPs gaining groundAppetite for India-dedicated fund managers is building. More than 50% of LPs surveyed plan to increase their allocation to India-dedicated funds, with just 5% expecting a reduction. On fund size, the $500 million to $1 billion range is most preferred, reflecting LP views on capital absorption potential. Domestic GPs still represent only around 15% of total PE deployment, a fraction of Korea's 62%, though that share has grown from 10% to 15% in recent years.What needs fixingDespite the optimism, structural issues remain. India's GP cohort ranks modestly against other markets on the metrics that matter most to LPs, including performance record (rated 5.4/10), exit record (4.9/10), and quality of investment teams (5.1/10). Currency risk, a complicated tax regime, capital control friction, and visa constraints are cited consistently across both allocator types.The policy agenda implied by the survey is fairly specific: LPs highlight the need for greater clarity around valuation norms and tax treatment including carried interest taxation, simplifying approval processes for cross-border transactions, and enabling longer-duration fund structures with periodic liquidity windows.Beyond PE and VC, private credit is drawing interest. About $36 billion was deployed in India's private credit market from 2020 to 2024, driven by demand for bespoke financing, improved creditor resolution frameworks, and persistent funding gaps for mid-market enterprises.The bottom lineIndia's private market story is real and increasingly institutionalised. But it remains narrow in terms of sector spread, GP concentration, and capital depth relative to the size of the economy. The six largest GPs accounted for 64% of the total $13.68 billion raised between 2022 and 2024, up from 59% from 2016 to 2018. The LPs who have leaned in know how to navigate that. The ones still on the fence are waiting for the structural improvements that would make the market more legible and liquid at scale.Source: <a href="https://www.mckinsey.com/industries/private-capital/our-insights/indias-private-markets-the-global-limited-partner-view" rel="noopener noreferrer" target="_blank">McKinsey &amp; Company / IVCA LP Survey, November 2025. Published March 11, 2026.</a>--Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on privately without intermediaries. <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank" style="color: rgb(37, 99, 235);">www.newnex.io</a>

India's Private Markets: What Global LPs Actually Think (McKinsey - IVCA)

Elon Musk launched TeraFab in late March 2026 with $20 billion in initial funding. The stated goal is to manufacture logic chips, memory, and advanced packaging all under one roof, an integrated chipmaking operation that no company on earth currently runs at scale. The $20 billion is a starting point. What Musk actually wants to build would cost 250 times that.Investment research firm Bernstein ran the numbers. To hit Musk's stated ambition of producing AI chips that consume one terawatt of power annually, TeraFab would need between 142 and 358 modern semiconductor fabs. The total price tag: approximately $5 trillion. For context, the entire US federal budget this year is around $7 trillion.What the math actually looks likeThe terawatt target is not a vague aspiration. Musk has said publicly he wants foundry partners, and now his own facilities, to produce hundreds of billions of AI chips per year. Bernstein translated that into wafer demand: roughly 22.4 million Rubin Ultra GPU wafers, 2.7 million Vera CPU wafers, and 15.8 million HBM4E memory wafers annually.A modern leading-edge logic fab produces around 20,000 wafer starts per month, or about 240,000 wafers per year. At 80% yield, hitting the GPU and CPU wafer targets alone would require approximately 126 logic fabs. Each 2nm-class fab costs between $25 billion and $35 billion to build. Logic capacity alone comes to somewhere around $3.15 to $3.78 trillion, before a single memory chip is made.Memory is a separate problem. HBM production requires DRAM fabs running at 100,000 to 200,000 wafer starts per month. Producing 15.8 million HBM wafers annually would need around 9 to 12 dedicated DRAM facilities at $20 billion each, adding roughly $240 billion to the bill. Then there is advanced packaging, the facilities that stack HBM onto processors using 2.5D and 3D integration. These run $2 to $3.5 billion per phase, and TeraFab would need tens to hundreds of them.Add land, R&amp;D, software infrastructure, and workforce, and the total exceeds $4 trillion by a wide margin. Bernstein's $5 trillion figure, while rough, is directionally conservative.To put $5 trillion in perspectiveNvidia's market cap as of early 2026 sits at around $4.34 trillion. Apple is at $3.71 trillion. Alphabet is at $3.5 trillion. Musk would need to mobilize capital exceeding the value of the world's most valuable company to build what he is describing. Even if the US government wanted to fund it entirely, doing so would consume more than 70% of its annual budget in a single appropriation.TSMC, the world's most advanced chipmaker, shipped 15 million 300mm-equivalent wafers across all its process nodes in all of 2025. It took the company over two decades and roughly 50 fab modules to reach that capacity. TeraFab is proposing to build more than twice that output, from scratch, on an unspecified timeline.The constraints that money cannot solveEven setting aside the financing problem, which is itself probably insurmountable for a private venture, there are hard physical limits that $5 trillion cannot simply override.ASML, the Dutch company that makes the extreme ultraviolet lithography machines required for cutting-edge chip production, ships roughly 50 to 60 EUV machines per year globally. Every major chipmaker is already competing for that allocation. A buildout of 100-plus leading-edge fabs would require hundreds of EUV machines over a compressed timeline. That supply does not exist.Skilled semiconductor engineers and fab technicians are already in short supply globally. Samsung, Intel, and TSMC are all struggling to staff their existing expansions in the US, Germany, and Japan. A TeraFab buildout at the scale Musk describes would require a workforce that simply has not been trained yet.Construction materials, ultrapure water systems, power infrastructure, and chemical supply chains for photoresists and process gases are all similarly constrained. Building one leading-edge fab takes four to five years under normal circumstances. Building 126 of them simultaneously is not a scheduling problem. It is a civilizational-scale industrial mobilization.What TeraFab actually is right nowThe $20 billion announced at launch is barely enough to build a single 7nm-class logic fab, a process node that TSMC commercialized in 2018. Tesla is currently hiring a semiconductor fabs construction manager, which suggests the project is in very early planning stages.The gap between where TeraFab starts and where Musk says it is going is not a gap that gets bridged through ambition or capital efficiency. It is a gap that would require a coordinated, multi-decade effort across governments, sovereign wealth funds, equipment makers, and capital markets simultaneously, all betting on a single private venture run by someone with seven other major companies competing for his attention.Musk's ambitions for TeraFab are also somewhat self-serving. Tesla, SpaceX, and xAI are all voracious consumers of compute. Vertical integration into chipmaking would reduce dependency on TSMC and Nvidia, both of which represent real strategic risks for his businesses. That framing makes TeraFab rational as a hedge. As a plan to reshape the global semiconductor industry, the numbers do not come close to adding up.The $20 billion is real. The $5 trillion is the actual cost of what Musk says he wants. The distance between those two figures is the most important fact in this story.---Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on privately without intermediaries. <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank" style="color: rgb(37, 99, 235);">www.newnex.io</a>

Musk's TeraFab Could Cost $5 Trillion. Here's Why That Number Is Almost Certainly Right.

March 2026The venture capital model is not broken.But it is evolving faster than most people in the industry are willing to say out loud.The structure hasn't changed much:<ul><li>10-year funds</li><li>Gradual deployment</li><li>5 to 9 year exit cycles</li></ul>That foundation is still there. What's shifting is not the model itself, but what's happening inside it: the distribution of outcomes, the speed at which winners scale, and how decisive capital concentration has become.Timelines: Same Structure, Different RealityThe 10-year model was built on an assumption of a relatively linear journey from investment to exit. That model is currently under high pressure.Two timelines are now clearly visible inside the same fund:<ul><li>Fast winners scaling in 2 to 5 years, driven by AI, distribution advantages, or sheer capital weight</li><li>Long-tail companies taking 10 to 15 years because of market complexity, regulatory cycles, or slower growth curves</li></ul>The industry has responded. Opportunity funds are normal. Continuation vehicles are common. Funds are holding onto winners longer wherever they can.But let's be clear about what these instruments actually are. They are workarounds, not structural solutions. The underlying challenge, LP return timelines are not matching the reality of how long companies take to reach liquidity; this has not been resolved. That distinction matters.Reserves: Same Principle, Greater ConcentrationDoubling down on winners is not a new idea in venture. Reserves have always been part of the strategy. What's changing is the intensity of it.A larger share of reserves is going into fewer companies. The gap between top performers and the rest of the portfolio is widening. Average-performing companies are increasingly deprioritised, not abandoned necessarily, but they are no longer where the attention or the capital goes.This is not a strategic pivot. It's the same strategy operating at a more extreme end of the spectrum.Ownership: From Important to DecisiveOwnership has always mattered. But in an environment where fewer companies drive the majority of returns, and those companies are scaling faster and larger than before, ownership is no longer just an important variable.It is the variable.The tension is this. The funds with the highest ownership in the best companies are almost always the ones who got in early, at low valuations, before the company was obvious. Entering later with meaningful ownership is nearly impossible to build for smaller funds. So while ownership is decisive, it is increasingly inaccessible in practice for investors who wasn't already in the room early.That gap between the funds who own the winners and those who don't is therefore not closing. It is widening.What's Actually ChangingIt's tempting to frame this moment as a structural overhaul of venture capital. It isn't.The fundamentals remain the same:<ul><li>Power law still applies</li><li>Reserves still matter</li><li>Ownership still drives returns</li><li>Fund structures are broadly similar</li></ul>What has changed is where the pressure is being felt: speed at the top end, duration at the long tail, and capital concentration into an increasingly narrow set of companies.The AI impactAI is compressing timelines structurally, not cyclically. It attacks the actual bottlenecks of company building: code, hiring, go-to-market, customer support. Those bottlenecks don't come back once the tools exist.But compression alone does not decide outcomes. Distribution does. Capital does.AI lowers the cost of building a product. It is not yet lowering the cost of reaching a market. And the companies with existing audiences, data, brand, and balance sheets are deploying AI on top of those advantages (Think Meta, Microsoft, Google). That widens the gap between them and everyone else rather than closing it.Product is no longer a moat on its own. A strong team matters for execution, but a great team with no distribution and no capital is now competing against an average team sitting on top of an existing user base with the same AI tools available to everyone. That is a harder fight than it was five years ago.The open question is not whether AI keeps compressing timelines. It will. The question is whether capital and distribution advantages become so dominant that product and team quality become secondary filters rather than primary ones. The early evidence suggests yes.The Growing DivideThe dynamics described above, concentration, speed, ownership pressure, mostly benefit large established funds with strong brand, early access, and the balance sheet to double down. For everyone else, the model getting more intense is not just more demanding. It is more punishing.Emerging managers, smaller funds, and institutional co-investors are operating in an environment where the best deals are locked up earlier, valuations at entry are higher, and the window for building meaningful ownership is narrower. The same model, running hotter, is structurally harder to navigate from outside the top tier.That's the part of this evolution that doesn't get said clearly enough.The Real ShiftThe most honest way to describe this moment is not "VC is broken" or "the model needs reinventing."It's this: the same model is now operating under more extreme conditions, and those conditions are not equally extreme for everyone.Bigger winners. Faster scaling. Longer holding periods. More aggressive capital concentration. And a growing divide between the funds positioned to benefit from all of that and the ones absorbing the pressure without the upside.The model didn't break. It intensified. And intensity, as always, separates.---Join Newnex - the exclusive platform for institutional VCs to syndicate, co-invest and follow-on privately without intermediaries. <a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

The VC Model Isn't Broken. But It's Operating Under More Extreme Conditions.

26 March 2026The venture capital market is undergoing a structural shift. What was once a broad, rising tide lifting many startups is now splitting into a K-shaped dynamic - where a small group of companies accelerates rapidly with abundant capital, while the majority face slower growth, constrained funding, or stagnation.This is not a short-term cycle. It is a reflection of a deeper change in how capital is allocated, how companies scale, and how venture returns are generated.Recent reporting from <a href="https://techcrunch.com/2026/03/20/ai-startups-are-eating-the-venture-industry-and-the-returns-so-far-are-good/" rel="noopener noreferrer" target="_blank">TechCrunch,</a> including developments involving firms like Andreessen Horowitz, highlights a clear pattern: capital is moving faster, in larger amounts, into a narrower set of high-conviction opportunities.What “K-Shaped” Means in VentureAt the top of the “K”:<ul><li>A small number of companies attract disproportionate capital</li><li>They scale rapidly, often driven by AI, infrastructure, or strong network effects</li><li>They secure top-tier investors and follow-on rounds quickly</li></ul>At the bottom:<ul><li>A large number of startups struggle to raise subsequent funding</li><li>Growth is more linear or constrained</li><li>Exit visibility becomes uncertain</li></ul>This is no longer just about performance - it is about access to capital becoming unevenly distributed.Why Capital Is Concentrating1. Winner-Takes-Most MarketsTechnology - particularly AI - is amplifying scale advantages. Early leaders can dominate quickly, making them natural magnets for capital.2. Speed Has Become CriticalThe best companies scale globally in months. Investors are concentrating capital to accelerate speed and secure market leadership.3. Larger Funds, Fewer BetsMany leading venture firms are writing bigger cheques into fewer companies, prioritising conviction over coverage.4. Signalling EffectsWhen a top-tier firm invests, it often validates the opportunity for others — further concentrating capital into the same companies.The Expanding Gap Between “Good” and “Great”Venture capital has always relied on outliers. But today, the gap between:<ul><li>Category-defining companies, and</li><li>Everything else</li></ul>…is widening.Strong, well-run businesses may still exist in large numbers. But without the potential for breakout scale, they are increasingly less aligned with traditional venture return models.Should VCs Still Invest Broadly?Rather than a binary yes or no, this is increasingly becoming an open strategic question across the industry.In a K-shaped market, where outcomes are more concentrated, funds are rethinking how broadly they should deploy capital — and what truly drives performance.In practice, many VCs continue to invest across a wide range of companies. This is shaped by several realities:<ul><li>The need to deploy committed capital within a defined timeframe</li><li>Limited access to highly competitive, oversubscribed deals</li><li>A belief that differentiated insight can uncover overlooked opportunities</li></ul>At the same time, the market is raising important considerations:<ul><li>Not all companies attract strong follow-on capital</li><li>Growth trajectories are diverging more sharply</li><li>The gap between solid businesses and venture-scale outcomes is increasing</li></ul>This is prompting a broader reflection within the industry:<ul><li>Should portfolios remain diversified to maximise exposure?</li><li>Or become more concentrated to align with where outsized returns are emerging?</li></ul>The answer is becoming less about “right vs wrong” — and more about strategy, access, and conviction.Some funds are leaning into concentration, backing fewer companies with higher conviction. Others continue to invest broadly, particularly where they believe they have a unique sourcing or underwriting edge.What is becoming more difficult to sustain is the middle ground — investing broadly without a clear differentiating advantage.What Winning VCs Are DoingThe most effective investors in this environment are adapting in a few consistent ways:<ul><li>Focusing on high-conviction investments rather than wide coverage</li><li>Reserving more capital for follow-on rounds in their strongest companies</li><li>Moving quickly to secure allocation in competitive deals</li><li>Avoiding “middle-zone” companies that are solid but unlikely to deliver outsized returns</li></ul>The shift is clear: from diversification toward precision and conviction.Implications for FoundersFor founders, this environment raises the bar significantly.Raising capital is no longer about being “good enough.” Increasingly, investors are looking for:<ul><li>Clear potential for category leadership</li><li>Strong early traction or differentiation</li><li>Speed of execution and scalability</li><li>The ability to attract follow-on capital</li></ul>Companies that cannot demonstrate these may still build meaningful businesses — but may find it harder to align with venture funding expectations.What To Do About It1. Prioritise AccessThe key advantage in today’s market is not volume of deals — but access to the right deals.2. Build Clear Investment ThesisGeneralist approaches are becoming less effective. Strong, focused theses help identify true outliers earlier.3. Increase SelectivityDoing fewer deals with higher conviction is becoming a more common strategy among top-performing funds.4. Double Down on WinnersReserving capital and supporting breakout companies is critical to capturing full upside.5. Strengthen Networks and SyndicationAccess is often driven by relationships. Collaborative investing and trusted networks are becoming more important.6. Recognise Different PathsNot every strong company fits the venture model. Distinguishing between venture-scale and non-venture-scale opportunities is increasingly important.The Strategic Shift AheadThe K-shaped venture market is not a temporary distortion — it reflects a more fundamental evolution:<ul><li>Fewer companies will capture a larger share of value</li><li>Capital will continue to concentrate around perceived winners</li><li>Access and conviction will define performance</li></ul>For investors, the central question is no longer how to see more deals — but:<blockquote>How to consistently identify and access the few companies that will define the future.</blockquote>Those who adapt to this shift will continue to outperform.Those who do not may find themselves active in the market — but increasingly on the wrong side of the curve.----Newnex enables direct access between VCs - privately, without intermediaries.Join 50+ venture capital firms already connecting with each other for high-quality deal flow in a trusted environment.<a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

The K-Shaped Venture Market: Why Capital Is Concentrating - and What to Do About It

A comprehensive analysis by Macfarlanes (February 2026) lays out the macroeconomic forces shaping private capital markets. Private capital markets enter 2026 in a paradox: deal momentum is returning, but liquidity remains constrained. Inflation is moderating, yet new inflationary forces are building. The US still dominates, but Europe is making its most decisive fiscal move in a generation. The takeaway is clear: 2026 rewards investors who can read policy divergence, manage liquidity creatively, and position at the intersection of infrastructure, technology, and cross-border capital flows. 1. Monetary Policy Divergence: The End of SynchronisationCentral banks are no longer moving in lockstep. The Fed is holding at 3.50–3.75% after a December cut, the Bank of England cut to 3.75% with further easing signalled, and the ECB is comfortable at 2% with inflation near target. This divergence is structural, not temporary — interest rate decisions are increasingly driven by local fiscal conditions rather than the global cycle. Investor Implication: For cross-border investors, this divergence creates real arbitrage in deal timing, financing costs, and exit windows. A deal that looks expensive at UK rates may pencil differently when structured through a European vehicle. Political pressure on the Fed chair has added a wild card, with some investors shifting safe-haven allocations from US Treasuries to European government bonds. For LP portfolios with significant dollar exposure, this is worth monitoring. 2. Europe's Fiscal Moment: Closing the GapGermany has approved a €500bn infrastructure fund and a record €58.3bn investment allocation in its 2026 budget, alongside significantly higher defence spending. This is not incremental — it represents the most expansionary fiscal shift in Europe in decades, backed by rising real wages and lower rates. The expectation is that this will reduce the economic growth gap with the US, creating diversification opportunities for investors concentrated in American assets. In the UK, fiscal headroom remains tight, but the Mansion House Accord is a structural catalyst for private capital. Defined Contribution pension providers have committed to allocating 10% of default funds to private markets by 2030, with 5% directed to UK investments. This is not voluntary signalling — it's a commitment that will channel billions into the ecosystem. The constraint is bond market discipline. The US, UK, and France all carry significant debt levels and remain exposed to what the ECB calls "bond vigilantes" — investors who sell off government bonds to protest irresponsible fiscal policies, raising borrowing costs and forcing course corrections. This matters for any GP relying on government-linked contracts or policy-dependent sectors. 3. AI: The Accelerator That Could Also Be the BrakeAI investment is projected to exceed $500bn in 2026. Data centre buildout alone is adding 10–20 basis points to US GDP growth. A small group of AI companies accounted for more than half of S&amp;P 500 returns and about one-third of global equity gains as of October 2025. But the Macfarlanes analysis highlights a risk that many investors are underpricing: AI-driven inflation. AI relies on scarce real-world inputs - power, grid capacity, rare earth minerals, specialised semiconductors - and these constraints are keeping specific cost pressures alive even as broader goods inflation cools. Reuters identified AI-driven inflation as 2026's most overlooked risk. Large allocators are increasingly concerned about an AI bubble, showing a growing preference for non-US markets, smaller companies, and overlooked sectors. The concentration risk is real: when a few companies drive a third of global equity gains, any correction reverberates through the entire portfolio. 4. Private Markets: The Liquidity EquationDeal Activity is BackGlobal M&amp;A rebounded to $4.4tn in 2025, with 22 of the 70 global deals over $10bn closing in Q4 alone. European M&amp;A saw a 25% increase in Q4 compared to Q2. According to a Citizens Financial survey, 58% of mid-market executives expect M&amp;A volume to climb further in 2026. But Liquidity Remains the ConstraintDespite recovering deal volumes, weak distributions to LPs remain the defining challenge. The industry is still working through older assets and accumulated unrealised value. This has made liquidity solutions — particularly secondaries and continuation vehicles — essential tools rather than niche options. Continuation vehicles hit approximately $107bn in transaction value in 2025, accounting for one-fifth of PE exits. Secondary market discounts narrowed from 9% to 6%, signalling improving confidence. But the governance questions are real: when buyer and seller sit under the same roof, transparent pricing and conflict management are non-negotiable. Fundraising ConcentrationThe top 10 PE funds captured 46% of US PE fundraising in 2025, a 34.5% increase from 2024. In a constrained liquidity environment, LPs are rationally concentrating around the largest managers. However, data consistently shows wider performance dispersion among small and mid-sized managers — meaning the best risk-adjusted returns may be found precisely where institutional capital isn't flowing. 5. Private Credit: Strong Demand, Tightening TermsPrivate credit enters 2026 with structural tailwinds: banks remain constrained, sponsors value speed and certainty, and rates — while no longer "higher for longer" in most markets — are still sufficient to deliver meaningful returns without excessive leverage. First-lien yields are expected to stabilise at 8.0–8.5%. The challenge is competition. As more capital has entered, spreads have tightened and creditor protections have weakened. Some deals now include more borrower-friendly features including aggressive liability management and payment-in-kind structures. Going forward, returns will depend less on broad market moves and more on manager selection, origination networks, and restructuring capability. A significant development is the Bank of England's launch of a system-wide stress test for private credit, engaging major managers. This signals that regulators are taking the public-private convergence seriously and that transparency and valuation discipline will be increasingly scrutinised. 6. Sector Spotlight: Where Capital Is FlowingInfrastructure: The Decade's TradeInfrastructure deal volumes rose 59% year-on-year in H2 2025. Digital infrastructure alone is projected to reach $19tn in global investment by 2040. The UK is seeing landmark commitments: Google's £5bn initiative, Microsoft's £22bn AI infrastructure deployment. Private infrastructure assets under management reached $1.3tn in 2024, quadrupling over the past decade with 16% annual growth — outpacing broader private capital markets at 13%. Cross-asset strategies are dominant, with 75% of infrastructure capital raised from H2 2023 through H1 2024 going to convergence strategies that blur traditional sector boundaries. The energy transition alone requires £40bn annually through 2030 under the Clean Power Action Plan. Sports: Institutional Asset Class ArrivesPrivate equity investment in sports reached approximately $6.3bn through Q3 2025. Following the NFL's August 2024 approval of PE minority stakes, the addressable market expanded to an estimated $239bn across major US leagues. Apollo's minority stake in Wrexham AFC, Sixth Street's 8% in the New England Patriots, and RP-Sanjiv Goenka's 70% acquisition of The Hundred's Manchester Originals illustrate the breadth of deal structures emerging.Media rights remain the core value driver, but underwriting requires recalibration as younger audiences fragment across platforms and direct-to-consumer models gain ground. UK Real Estate: The Recovery TradeCommercial investment volumes are tracking toward a 15–20% increase through 2026. Build-to-Rent is a standout sub-sector with £581.2m in Q3 2025 investment and £3.8bn under offer. Cross-border investment rebounded to 51% of total BTR investment in 2024, with North American capital deploying over £1bn in Q4 alone. Regional markets — Manchester at 2.2% economic growth, Birmingham with 22.2% rental value growth projected through 2028 — are outperforming London-centric strategies. The Cross-Border ImperativeThe macro environment in 2026 favours investors who operate across borders, think structurally about liquidity, and can access the mid-market where alpha is less competed away. Policy divergence between the Fed, BoE, and ECB creates timing advantages. Europe's fiscal expansion opens new deal corridors. AI's demand for physical infrastructure links back to India's semiconductor and manufacturing ambitions. Source: Macfarlanes, "The Macroeconomic Backdrop to Private Capital Markets — February 2026." Analysis with added commentary.Full report: macfarlanes.com<a href="https://www.macfarlanes.com/insights/102mehd/the-macroeconomic-backdrop-to-private-capital-markets-february-2026" rel="noopener noreferrer" target="_blank">https://www.macfarlanes.com/insights/102mehd/the-macroeconomic-backdrop-to-private-capital-markets-february-2026/</a> Disclaimer: This article is for informational purposes only and does not constitute investment advice. -----Join Newnex’s verified VC investors and syndicate alongside institutional VCs.Introduce and access current and follow-on rounds directly and privately, without intermediaries. The strongest signal in any round? Another investor committing: <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank">www.newnex.io</a>---Institutional VCs you can now connect on Newnex:Trifecta Capital Partners, Axiom Equity, G Squared, Velocity Capital, Finch Capital, BEENEXT (BEENEXT India), Bharat Innovation Fund (BIF), Invest‑NL (Deep Tech Fund), Redalpine, Axon Partners Group, Isometric Ventures, Forestay Capital, Unilever Ventures, Practica Capital, Blue Lion Global, Cornerstone VC, SystemaNova.vc, Hitachi Ventures, Prefcap VC, ZAKA VC, Tesi Finland, EQT Ventures, Yamaha Motor Ventures, Accion International, Red River West, Bayhouse Capital, Acrobator, NG Bio, Avataar Ventures, Big Pi Ventures, Synthesis Capital, Elaia, Tensor Ventures, XPRESS Ventures, European Investment Bank, Nexus Venture Partners, Va-ID

 Private Capital in 2026: Navigating Divergence, AI Risk, and the New Liquidity Playbook

February 3, 2026 In a move that signals the growing maturation of cryptocurrency infrastructure and its acceptance within mainstream finance, Y Combinator-Silicon Valley's most prestigious startup accelerator announced that it will allow founders to receive their seed funding in stablecoins. This decision represents a fundamental shift in how venture capital moves across borders and marks a pivotal moment in the evolution of startup financing. Breaking the Traditional Banking MoldY Combinator's "standard deal" has long been a defining feature of the startup ecosystem: $500,000 in exchange for 7% equity in early-stage companies. Starting with the Spring 2026 batch, founders will have the option to receive this funding in USDC (USD Coin), a dollar-pegged stablecoin issued by Circle, rather than through traditional bank wire transfers. The stablecoin option will be available across major blockchain networks including Ethereum, Base, and Solana, giving founders flexibility in choosing their preferred infrastructure. Importantly, this move doesn't alter Y Combinator's investment terms or amounts—it simply provides an alternative delivery mechanism for capital. Nemil Dalal, Y Combinator's visiting partner focused on crypto and a former Coinbase executive, emphasized that the decision was driven by significant "founder demand" for faster and more cost-effective alternatives to traditional banking rails. The practical advantages are stark: while international wire transfers can cost dozens of dollars in intermediary fees and take several days to clear, USDC transfers typically cost less than one cent and settle in under a second. Solving Real Problems for Global FoundersThe implications of this shift extend far beyond technological novelty. For internationally-based founders, particularly those in emerging markets or regions with restrictive banking systems, the ability to receive funding in stablecoins eliminates weeks of delay and significant friction. Traditional international wire transfers routinely encounter delays due to compliance checks, intermediary banking relationships, and time zone differences. For early-stage startups operating on tight runways, these delays can prove existentially dangerous. Every day without access to committed capital increases risk and limits the ability to capitalize on market opportunities, hire talent, or secure critical infrastructure. Y Combinator has already witnessed success stories from portfolio companies that leveraged stablecoins for this purpose. Latin American-focused firms like DolarApp and Aspora have used stablecoins to bypass inefficient local banking systems, demonstrating the practical value of blockchain-based settlement for cross-border operations. For founders in countries with volatile local currencies, receiving funding in dollar-pegged stablecoins also eliminates foreign exchange risk during the critical window between commitment and receipt of funds. This stability, combined with near-instantaneous settlement, represents a fundamental improvement in capital efficiency. The Regulatory TailwindY Combinator's decision reflects a broader regulatory environment that has become increasingly favorable to stablecoins. The timing of the announcement coincides with what industry observers call a "regulatory inflection point" in the United States, particularly following the passage of the GENIUS Act in 2025. This legislation created a federal framework for stablecoins that mirrors the safety and soundness standards of traditional banks, giving institutional players the confidence to integrate digital dollars into their primary workflows. The framework addresses custody requirements, reserve attestations, and compliance protocols that have historically been sources of concern for regulated financial institutions. Major financial institutions have begun offering stablecoin services to corporate clients, and traditional accounting firms now provide guidance on stablecoin treasury management. This institutional infrastructure makes Y Combinator's stablecoin option operationally feasible in ways that would have been impractical just two years ago. Dalal noted that while broader cryptocurrency markets have experienced volatility, with Bitcoin nearing multi-month lows, the enthusiasm around stablecoins continues to grow. "The excitement on stablecoins is just growing," he said. "It's actually agnostic of prices." Operational Challenges and ImplicationsWhile the benefits are compelling, stablecoin-based funding introduces new operational requirements that startups must address. Companies receiving funding in stablecoins must immediately determine how those assets will be safeguarded, how spending authority is defined, and how balances are reported internally and externally.In traditional corporate finance, much of this governance work is outsourced to banks. Funds arrive in accounts governed by well-established legal and regulatory frameworks, with controls embedded in the institution. Stablecoin-based funding removes that layer, forcing organizations to supply their own governance infrastructure. The most immediate consequence is the absence of a bank as gatekeeper. Transactions are not reviewed by compliance departments or delayed by correspondent networks. Finality is near-instant. This efficiency carries a corollary: the burden of governance shifts decisively inward. YC-funded startups that opt for stablecoins must establish wallet architectures that reflect corporate realities rather than individual convenience. Multi-signature arrangements, role-based permissions, and clear separation between custody and authorization are becoming prerequisites for credible financial management across blockchain infrastructure. Accounting ComplexitiesBeyond governance, accounting presents persistent challenges. Stablecoins, despite their dollar peg, do not enjoy uniform treatment as cash or cash equivalents under prevailing accounting standards. They are typically classified as intangible assets or, in some jurisdictions, as financial instruments, with implications for valuation and reporting. For firms receiving funding in stablecoins, this affects how capital is recorded from day one and how subsequent expenditures are recognized. Companies must work with accountants familiar with cryptocurrency accounting principles and be prepared for additional reporting complexity compared to traditional fiat funding. A Blueprint for Enterprise AdoptionThe significance of Y Combinator's move extends beyond startups. The accelerator's cohort effectively becomes a live laboratory for mature enterprises to observe how stablecoins might scale in areas like payments, custody, compliance, and risk management. For established multinationals that have spent years debating whether crypto belongs near their balance sheets, YC's formalization of stablecoin funding offers a concrete example of how digital assets can be integrated into corporate financial operations without collapsing into ideology or speculation. The most tangible advantage of stablecoin-based funding emerges in payments, particularly across borders. Startups with distributed teams can compensate contractors or vendors directly, without navigating foreign exchange conversions, correspondent banking delays, or opaque fee structures. Settlement occurs on a shared ledger, typically within minutes. Cross-border payments remain one of the least efficient aspects of global finance. Stablecoins don't eliminate regulatory or tax considerations, but they do compress the mechanics of movement. Observing how small organizations operationalize this capability offers insight into how it might scale for larger enterprises. Visa, recognizing this opportunity, launched its Stablecoins Advisory Practice in 2025 to help banks, FinTechs, merchants, and businesses of all sizes navigate the integration of stablecoin infrastructure into their operations. Y Combinator's Crypto JourneyY Combinator's embrace of stablecoin funding represents a continuation of its long engagement with the cryptocurrency sector. Since backing Coinbase in its 2012 batch, the accelerator has invested in nearly 100 crypto-related startups. The decision to accept stablecoin funding is both a validation of the sector it has supported and a form of institutional commitment to its future. Last September, YC partnered with Coinbase and Base to encourage founders to build more blockchain-related companies. At the time, the accelerator described the world as entering "Fintech 3.0," characterized by a financial system built with code, where payments settle instantly, assets are held in self-custodial wallets, and financial services operate globally around the clock. Dalal emphasized that YC is actively looking to fund more companies working on stablecoins as the technology matures. Beyond stablecoins, the accelerator is also interested in areas such as tokenization, new credit markets, and onchain capital formation. Strategic Context and Competitive ImplicationsY Combinator's announcement places competitive pressure on other accelerators and early-stage investors to modernize their payment infrastructure or risk appearing technologically backward to a generation of founders who have grown up with cryptocurrency. The decision is particularly significant given Y Combinator's outsized influence in shaping norms and practices within the startup ecosystem. When the accelerator introduces a new standard or practice, competitors and later-stage investors often follow suit within months. For venture capital firms that have been hesitant to engage with cryptocurrency due to compliance concerns or technological unfamiliarity, YC's move provides a roadmap for how established institutions can incorporate digital assets without abandoning traditional investment structures or fiduciary responsibilities. Importantly, Y Combinator is not investing in cryptocurrency or taking on crypto-denominated assets. It is simply offering a more efficient payment rail for delivering U.S. dollar-denominated investments. This distinction matters for regulatory and risk management purposes, as it allows the accelerator to realize the operational benefits of blockchain technology while maintaining exposure exclusively to fiat currency. The Broader Trajectory of Venture Capital InnovationY Combinator's stablecoin initiative is part of broader experimentation with alternative funding mechanisms in the venture capital industry. Rolling funds, syndicate platforms, and tokenized investment vehicles have all emerged in recent years as alternatives or supplements to traditional venture capital structures. These innovations reflect both technological possibilities and market demand for more flexible, efficient, and accessible investment mechanisms. The venture capital industry has historically been characterized by long settlement times, complex legal structures, and high barriers to entry for both investors and founders. Cryptocurrency and blockchain technology promise to reduce friction at multiple points in the investment lifecycle. While Y Combinator's stablecoin option represents a relatively modest application of this technology—focused solely on the disbursement phase—it establishes precedent for more ambitious integrations of digital assets into venture capital operations. Impact on Startup Treasury ManagementBeyond faster funding disbursement, Y Combinator's stablecoin option may influence how startups manage their treasuries more broadly. Founders who receive funding in stablecoins gain firsthand experience with cryptocurrency wallets, blockchain transactions, and digital asset management. This operational familiarity could encourage more startups to maintain a portion of their operating capital in stablecoins, particularly if they have international vendors or contractors who prefer cryptocurrency payments. The ability to pay suppliers, contractors, and employees in stablecoins could generate significant cost savings for startups with distributed teams, eliminating wire transfer fees and foreign exchange spreads that can consume several percentage points of each international payment.For startups building products or services related to cryptocurrency, blockchain, or decentralized finance, receiving Y Combinator funding in stablecoins also provides a form of validation and signals alignment between the accelerator and the startup's technological focus. Looking Forward: The Future of Startup FinanceDalal articulated Y Combinator's long-term vision for blockchain integration: "In the future, we expect more and more of the financial needs of startups to be enabled by blockchains." This extends beyond just receiving initial capital to encompass how startups raise subsequent rounds, run financial operations, and eventually access public markets. Founders are already using stablecoins for developer tools, remittances, and payouts, where speed and cost matter most. Over time, blockchains could increasingly underpin the entire financial lifecycle of startups, from formation through exit.As the startup ecosystem becomes increasingly global and digital-native founders become the norm rather than the exception, pressure to modernize venture capital infrastructure will only intensify. Y Combinator's decision to embrace stablecoin payments positions the accelerator at the leading edge of this transformation, potentially influencing how an entire generation of startups thinks about capital formation, treasury management, and financial operations. Mainstreaming Crypto InfrastructureY Combinator's move to offer stablecoin funding represents more than a technical upgrade to payment infrastructure. It signals the mainstreaming of cryptocurrency in Silicon Valley's most influential institutions and validates blockchain technology as a practical tool for solving real business problems rather than as a speculative asset class. Whether other major investors follow Y Combinator's lead will depend on regulatory developments, technological maturation, and the demonstrated benefits that early adopters realize from this new approach to startup funding. But the precedent has been set: one of the world's most respected startup accelerators has formally integrated cryptocurrency into its core operations. For the broader financial ecosystem, the implications are clear. Stablecoins are transitioning from a niche innovation to legitimate financial infrastructure. As regulatory frameworks solidify and operational best practices emerge, the barriers to institutional adoption continue to fall. Y Combinator's decision accelerates this trajectory, lending credibility and creating practical examples that other institutions can study and potentially emulate. The quiet revolution in venture capital infrastructure has begun, and it's being built on blockchain rails, one $500,000 seed check at a time. <a href="https://www.newnex.io/blogs/asset-management/the-future-of-money-how-stablecoins-cbdcs-and-digital-banking-are-redefining-the-financial-system" rel="noopener noreferrer" target="_blank">Click here to learn more about Stable Coins and CBDCs:</a> -----Join Newnex’s verified VC investors and syndicate alongside institutional VCs.Introduce and access current and follow-on rounds directly and privately, without intermediaries. The strongest signal in any round? Another investor committing: <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank">www.newnex.io</a>---Institutional VCs you can now connect on Newnex:Trifecta Capital Partners, Axiom Equity, G Squared, Velocity Capital, Finch Capital, BEENEXT (BEENEXT India), Bharat Innovation Fund (BIF), Invest‑NL (Deep Tech Fund), Redalpine, Axon Partners Group, Isometric Ventures, Forestay Capital, Unilever Ventures, Practica Capital, Blue Lion Global, Cornerstone VC, SystemaNova.vc, Hitachi Ventures, Prefcap VC, ZAKA VC, Tesi Finland, EQT Ventures, Yamaha Motor Ventures, Accion International, Red River West, Bayhouse Capital, Acrobator, NG Bio, Avataar Ventures, Big Pi Ventures, Synthesis Capital, Elaia, Tensor Ventures, XPRESS Ventures, European Investment Bank, Nexus Venture Partners, Va-ID

Why Is Y Combinator Offering $500K in Stablecoins Instead of Cash? Here's What You Need to Know

Tuesday, February 3rd wasn't just another down day for tech stocks. It was the moment the market decided AI had crossed another line - from helper to replacement. Anthropic released plugins for Claude Cowork late last week. By Tuesday morning, $285 billion in market value had evaporated across software, financial services, and asset management companies. A Goldman Sachs basket of U.S. software stocks fell 6% in a single session-its worst day since April's tariff selloff. This was repricing in real-time. What HappenedOn January 30th, Anthropic released 11 open-source plugins for Claude Cowork on GitHub. These weren't incremental AI features. They were complete workflow automation tools designed to handle end-to-end business processes across legal, sales, finance, marketing, and data analysis. The legal plugin specifically targets contract review, NDA triage, compliance checks, legal briefings, and templated responses. It's configurable to an organization's risk tolerances. Anthropic cautioned that outputs "should be reviewed by licensed attorneys"but that disclaimer didn't calm investors.The market's reaction wasn't about what the tool does today. It was about what it signals for tomorrow. Why This Matters More Than Previous AI ReleasesHere's what's different: Anthropic isn't a startup building on someone else's foundation model. They are the foundation model. Harvey AI is valued at $5 billion. Legora raised at a $1.8 billion valuation. Both build legal AI tools. But both depend on licensing models from companies like Anthropic or OpenAI. Now Anthropic has entered their market directly-and they control the underlying infrastructure these startups depend on. As one analyst noted, foundation model companies have "the unique advantage of disrupting both traditional legal news and data services as well as legal AI upstarts." That's not competition. That's an existential threat to two different categories of companies simultaneously. The Real Target: Business Models, Not Just Software FeaturesThomson Reuters—which acquired West Publishing and its Westlaw legal research platform in 1996—lost 18% in a single day. The company inherited West's century-old moat: the Key Number System, human-curated headnotes, citation tracking, and court relationships. West's actual defensibility was never about owning case law (that's public domain). It was about the structure, classification, and editorial layer imposed on top of that content. The Key Number System organized over 110,000 legal topics. Attorney-editors wrote headnotes summarizing key legal principles. KeyCite tracked how cases cited each other. AI doesn't need any of that infrastructure anymore. Claude can understand legal concepts directly, summarize cases itself, and analyze relationships between precedents on the fly. RELX (owner of LexisNexis) fell 14% and is now down nearly 50% from its February 2025 peak. Wolters Kluwer dropped 13%. LegalZoom plunged 19.7%. These aren't tech startups with inflated valuations. These are established companies with real revenue, real customers, and decades of market dominance. And the market just decided their moats don't exist anymore. The Per-Seat Revenue Model Is DyingSchroders analyst Jonathan McMullan captured the core problem: "AI tools allow businesses to do more with fewer staff, threatening the traditional model of charging per software user." Traditional SaaS economics worked like this: Company grows → hires more people → buys more software seats → software company revenue grows. It was predictable, recurring, and highly valued. AI breaks that equation. If a company can eliminate 30-40% of seats while maintaining or increasing productivity, software revenue compresses even if the product remains valuable. Most SaaS companies have 70-80% gross margins but spend heavily on sales and marketing. Compress topline revenue by 30% and many become unprofitable. The market is starting to price this in. The Contagion Spread GloballyThe selloff wasn't limited to legal software. By Tuesday's close:<ul><li>Financial data providers: Bloomberg, London Stock Exchange Group, FactSet, Morningstar all declined significantly</li><li>Marketing/advertising tech: Omnicom down 11.2%, Publicis fell 9%</li><li>Alternative asset managers: Blue Owl Capital hit a record ninth straight day of declines. Ares, KKR, TPG each fell over 10% at one point</li><li>Indian IT services: Tata Consultancy dropped 6%, Infosys fell 7.1%</li><li>Cloud accounting: Xero fell 16% in Sydney-worst day since 2013</li></ul> The iShares Expanded Tech-Software Sector ETF dropped 4.6% on its sixth consecutive day of losses. It's coming off a 15% decline in January—its worst month since 2008. The Nasdaq 100 fell as much as 2.4% before trimming losses to 1.6%. What The Numbers Tell UsOnly 71% of S&amp;P 500 software companies beat revenue expectations this earnings season. That compares to 85% for the overall tech sector.This gap isn't temporary. It's the market telling us software businesses are experiencing fundamental demand compression while the rest of tech—particularly infrastructure and hardware—continues growing. The "SaaSpocalypse"Jefferies analysts dubbed it the "SaaSpocalypse"—an apocalypse for software-as-a-service stocks. Bloomberg quoted trader Jeffrey Favuzza: "Trading is very much 'get me out' style selling." The fear isn't that AI makes software better. It's that AI replaces the need for software entirely by owning workflows directly.For decades, software companies sold tools that sat between people and their work. Now AI can execute the work itself. The software layer becomes optional. What's At Immediate Risk (And What Isn't)Highest risk:<ul><li>Professional services software (legal, accounting, consulting) built on information access and workflow automation</li><li>Financial data and analytics that AI can now replicate</li><li>Marketing and advertising tech already facing margin pressure</li></ul>Moderate risk:<ul><li>Horizontal SaaS where AI can automate the core value proposition</li><li>Any per-seat licensing model dependent on headcount growth</li></ul>Lower risk:<ul><li>Infrastructure and AI compute (the picks and shovels)</li><li>Vertical software with genuine regulatory moats (healthcare IT, financial compliance, government contractors)</li><li>Software controlling physical systems or hardware</li><li>Collaboration platforms where the value is human coordination, not automation</li></ul> The Uncomfortable Questions Every Software Investor Must Ask 1. Is the moat data, or structure? If your defensibility is "we have proprietary data," that's not enough. AI trains on public data and synthesizes across sources. The question is whether your structure (classification systems, networks, processes) creates genuine barriers. 2. Can the company survive 30-40% revenue compression? Even if customers stay, if they cut seats by a third, does the unit economics still work? Most SaaS companies optimized for growth, not compression. 3. Is AI a feature or a replacement? "We're adding AI features" isn't a strategy. The question is whether AI makes your core product more valuable or makes it redundant. 4. How fast can management adapt? Some companies will rebuild successfully. But that requires acknowledging the threat is real—not just adding "AI-powered" to marketing slides. What Happens NextWe're early. Anthropic's plugins launched Friday. The selloff hit Tuesday. Most companies haven't reported earnings that reflect any real AI impact yet. The 71% vs 85% earnings beat gap? That will likely widen. Expect more vertical-specific AI tools. Expect more incumbent software companies to miss estimates. Expect more consolidation as beaten-down companies get acquired at distressed valuations by buyers with better AI strategies. But also expect opportunity. Markets overshoot. Some companies will adapt. New categories of software-things we can't build until AI makes them possible—will emerge. Publicis earmarked €900 million for AI-related acquisitions in 2026. They see the writing on the wall and are buying their way into relevance. Others will follow. Stephen Yiu, CIO of Blue Whale Growth Fund, was direct: "This year is the defining year whether companies are AI winners or victims, and the key skill will be in avoiding the losers. Until the dust settles, it's a dangerous path to be standing in the way of AI."The assumptions that justified 10x revenue multiples for SaaS businesses—predictable growth, expanding margins, sticky customers—are all being questioned simultaneously. Software as we've known it for the past 15 years is being repriced. Not every company will survive. The market is figuring out who makes it through—and it's doing so with sell orders, not spreadsheets. The $285 billion that disappeared Tuesday? That's not temporary fear. That's the market calculating which business models still work when AI can execute workflows directly. The question isn't whether AI disrupts software anymore. It already has.The question is whether you can separate the survivors from the companies whose moats just evaporated. ---Join Newnex’s verified VC investors and syndicate alongside institutional VCs.Introduce and access current and follow-on rounds directly and privately, without intermediaries. The strongest signal in any round? Another investor committing: <a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>---Institutional VCs you can now connect on Newnex:Trifecta Capital Partners, Axiom Equity, G Squared, Velocity Capital, Finch Capital, BEENEXT (BEENEXT India), Bharat Innovation Fund (BIF), Invest‑NL (Deep Tech Fund), Redalpine, Axon Partners Group, Isometric Ventures, Forestay Capital, Unilever Ventures, Practica Capital, Blue Lion Global, Cornerstone VC, SystemaNova.vc, Hitachi Ventures, Prefcap VC, ZAKA VC, Tesi Finland, EQT Ventures, Yamaha Motor Ventures, Accion International, Red River West, Bayhouse Capital, Acrobator, NG Bio, Avataar Ventures, Big Pi Ventures, Synthesis Capital, Elaia, Tensor Ventures, XPRESS Ventures, European Investment Bank, Nexus Venture Partners, Va-ID

Thank Anthropic for negative $285 Billion : What Tuesday's Market Selloff Means for VC Investors

Partners Group published Private Markets outlook 2026. We are summarising the TL;DR key insights from the report for a quick reference with relevant actions. Private markets enter 2026 at elevated valuation levels across public and private assets, increasing sensitivity to shocks and reducing margin for error.High starting valuations require greater emphasis on valuation discipline, downside protection, and selectivity in capital deployment. Policy support remains a stabilising factor but does not eliminate valuation risk.• United States: expected rate cuts and fiscal measures support consumption and investment.• Europe: continued monetary easing in response to weak consumption and modest growth.• China: policy focused on domestic consumption and managing industrial overcapacity, supporting stabilisation rather than acceleration.Regional conditions are uneven.• United States remains relatively resilient but exposed to policy, trade, and institutional uncertainty.• Europe faces structural challenges including weak household consumption and subdued industrial activity.• China’s economy is stabilising but constrained by deflationary pressures and excess capacity. Long-term structural forces remain central to private markets opportunity.• Artificial intelligence is a key secular growth driver, with long-term expansion in adoption, data usage, and hyperscaler investment despite elevated valuations in parts of the ecosystem.• Infrastructure faces significant renewal needs after years of underinvestment, with growing capital requirements across energy, power, utilities, transport, and digital assets.• Real estate is undergoing structural adaptation driven by energy efficiency, digitisation, and changing usage patterns, increasing obsolescence risk for non-compliant assets. Portfolio construction discipline is critical in a high-valuation environment.• Scenario analysis and stress testing across adverse macro outcomes are essential.• Portfolios should focus on secular themes rather than short-term cyclical drivers.• Capital deployment should be gradual over three to four years to achieve vintage diversification.• Geographic diversification remains important, balancing North America, Europe, and other regions. Private equity activity is recovering after a prolonged slowdown.• Valuations have moderated from peak levels, creating selective opportunities.• Preference for control investments, thematic strategies, and selective secondaries.• Continuation vehicles are increasing and require careful quality assessment.Private credit returns are expected to moderate as interest rates decline.• Credit fundamentals remain stable.• Europe offers relatively better value than the US due to wider spreads and stronger creditor protections.• Selectivity remains important, particularly in middle-market lending.Infrastructure is positioned as a strategic allocation within private markets.• Supported by inflation-linked cash flows and strong secular demand.• Opportunities exist in both direct investments and secondaries where pricing dislocations are present. Real estate requires selectivity and value-add execution.• Returns must be driven by operational improvements rather than leverage.• Secondary investments provide access where direct transaction activity remains constrained. Royalties are an expanding asset class.• Global market estimated at approximately USD 2 trillion.• Used as a diversifier with low correlation to traditional private market assets.• Structures are expanding beyond traditional sectors.Overall, Partners Group positions 2026 as a year where capital discipline, patience, and rigorous portfolio construction matter more than capital availability, with success driven by selectivity rather than broad market exposure. Key-insights and possible actions: Markets start 2026 near historic highs<ul><li>Expectations of volatility mean discipline in valuation and scenario analysis is critical.</li><li>Be prepared for downturns as well as upside — don’t assume a straight continuation of recent trends.</li><li>Supportive fiscal and monetary policy (US fiscal expansion, ECB easing, China initiatives) may help sustain activity.</li></ul>Possible actions:- Set valuation guards and scenario stress tests for portfolio underwriting.- Avoid overpaying at peak multiples — discipline beats trend-chasing. Portfolio Construction Principles1. Stress-Test for Disruption<ul><li>Build scenarios (recession, stagflation, productivity shocks) into underwriting and risk management.</li><li>Don’t rely on a single macro view for 2026.</li></ul>Possible actions:- Implement multi-scenario models in investment memos and committee reviews. 2. Maintain Thematic Discipline<ul><li>Structural, secular themes (AI adoption, infrastructure modernization, demographics) should drive capital allocation rather than short-cycle economic calls.</li></ul>Possible actions:- Prioritize investments tied to resilient structural demand, not cyclical bet-ups. 3. Vintage &amp; Regional Diversification<ul><li>Spread private equity vintages (3–4 years) to smooth entry price dispersion.</li><li>Target balanced geographic exposure: North America 40–50%; Europe 40–50%; RoW 10–20%.</li></ul>Possible actions:- Structure deployment pacing and triangulate entry by region and cycle phase.- Asset Class Priorities- Private Equity Outlook:<ul><li>Transaction volumes are rebounding after a multi-year trough.</li><li>Valuations are moderating from peak levels, creating opportunities.</li><li>Stronger opportunities in control buyouts and selected secondaries.</li></ul>Possible actions:- Focus on control / operational value-creation strategies in sectors like pharmaceuticals and resilient industrials.- Underwrite GP-led continuation vehicles cautiously — quality varies. Private CreditOutlook:<ul><li>Returns moderate as base rates decline.</li><li>Credit quality remains stable.</li><li>Europe offers relative value over the US (spread &amp; protections).</li></ul>Possible actions:- Emphasize selective middle-market lending over large direct segments that face margin compression. InfrastructureOutlook:<ul><li>Strategic overweight due to inflation protection and secular growth (e.g., power, data, energy).</li><li>Mid-market secondaries with attractive discounts. <a href="https://www.partnersgroup.com/en/news-and-views/perspective/private-markets-outlook-2026" rel="noopener noreferrer" target="_blank">partnersgroup.com</a></li></ul>Possible actions:- Target resilient, essential infrastructure with inflation-linked cash flows.- Prioritize due diligence in renewables and data centers given regional policy variances. Real EstateOutlook:<ul><li>Value-add strategies matter more than yield chasing.</li><li>Secondaries present attractive entry amid muted direct activity.</li></ul>Possible actions:-Lean into operational value creation and tech adoption in assets (e.g., logistics, residential).- Use secondaries to capture discounts. RoyaltiesOutlook:<ul><li>Growing as a diversification tool across sectors (pharma, energy, entertainment).</li><li>Low correlation to other private-market returns.</li></ul>Possible actions:- Integrate royalty strategies as non-correlated holdings to improve portfolio resilience. Key Shifts to Act On in 2026:<ul><li>Stay valuation-disciplined and scenario prepared.</li><li>Embed structural thematic investing (AI, infrastructure, demographics) into strategy.</li><li>Balance vintage and regional diversification.</li><li>Be selective: middle-market credit, control private equity, inflation-linked infrastructure, and secondaries where price dislocations exist.</li></ul> Disclaimer: Possible actions outlined above are for informational purposes only and do not constitute investment advice, recommendations, or an offer to buy or sell any securities. Full report here: <a href="https://www.partnersgroup.com/en/news-and-views/perspective/private-markets-outlook-2026#executive-summary" rel="noopener noreferrer" target="_blank">https://www.partnersgroup.com/en/news-and-views/perspective/private-markets-outlook-2026#executive-summary</a> ----Newnex is a verified institutional VC network enabling direct syndication and co-investment with other VCs - no intermediaries and no SPVs.Sign up free.<a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

Insights from Partners Group Private Markets Outlook 2026

Money is quietly changing form. It is moving from paper and metal into entirely digital representations that travel at the speed of the internet. Yet what appears as a simple balance on a screen can mean very different things depending on who issues it, who guarantees it, and how it functions. Today, three systems define the landscape of digital money: traditional digital banking, stablecoins, and central bank digital currencies (CBDCs). Each has distinct characteristics, technologies, and implications for the future of finance. Digital Banking: The Money We Already UseWhen a person checks their bank account, the numbers they see are digital banking money - an entry in the database of a commercial bank. This money is the bank’s promise to pay. It functions smoothly because banks are regulated and supervised, and because deposit insurance provides a safety net. However, this money ultimately depends on the financial health of private institutions. If a bank fails, deposits are insured only up to a certain limit. Digital banking money is therefore a claim on a bank, not on the state. Digital banking dominates everyday transactions - salaries, utility payments, credit cards and transfers. It is efficient and trusted but not instantaneous across borders, as transfers rely on layers of intermediaries through systems like SWIFT or SEPA. Stablecoins: Private Digital Money with Public AmbitionsStablecoins are digital tokens designed to maintain a stable value, often pegged to a traditional currency such as the US dollar or the euro. Issued by private companies, stablecoins are backed by reserves - typically cash and short-term government securities - held to mirror the value of the tokens in circulation. The goal is stability, making stablecoins usable for payments, remittances and trading. Well-known examples include Tether (USDT), USD Coin (USDC), and euro-based versions such as Tether Euro (EURT) and Circle’s Euro Coin (EUROC). These coins operate on public blockchains such as Ethereum, enabling instant global transfers without relying on banking hours or geographical limits. The stablecoin sector has grown rapidly. Global stablecoin transaction volume rose from about 3.5 trillion US dollars in 2023 to over 5.5 trillion in 2024. Market capitalisation stood near 230 billion dollars in early 2025 and is projected to reach two trillion dollars by 2028. Stablecoins are now a key element in crypto markets and cross-border finance, but their reliance on private issuers raises questions about transparency, auditing, and regulatory oversight. The European Union’s Markets in Crypto-Assets (MiCA) regulation, coming into effect in 2025-2026, introduces strict requirements on reserve management and supervision. Alongside, major European financial institutions are developing euro-denominated stablecoins under regulatory frameworks. DWS, a leading German asset manager, has announced a regulated euro stablecoin to launch in 2025, and a consortium of European banks is working on G7 currency-pegged stablecoins, including a euro version. Central Bank Digital Currencies (CBDC): The Public’s Digital CashA central bank digital currency, or CBDC, is a digital form of state-issued money - a direct liability of the central bank. It is the digital equivalent of cash: fully guaranteed, universally accepted, and risk-free. When someone holds CBDC, they hold money issued by the state itself rather than a promise from a commercial bank. The motivation for CBDCs is not to imitate cryptocurrencies but to modernise official money for a digital world. They ensure that public money remains relevant in an economy increasingly dominated by private payment systems and global technology firms. CBDCs could make domestic and international payments faster and cheaper, provide resilience if commercial systems fail, and allow governments to distribute support or benefits directly to citizens. The Chinese digital yuan (e-CNY) is currently the largest pilot, with over 7 trillion yuan - nearly 1 trillion US dollars - transacted in test regions. India is developing the digital rupee for both retail and wholesale use. The European Central Bank is preparing the digital euro, now in its design phase, with pilot issuance expected around 2027–2028. To prevent disruption to the banking system, the ECB plans to limit how much CBDC each person can hold and use a “waterfall mechanism” to move excess funds back into bank deposits automatically. Most CBDCs do not rely on public blockchains. Instead, they use permissioned distributed ledger technology or secure centralised systems operated by the central bank and approved financial institutions. This approach combines the traceability and speed of blockchain with the control and compliance required for monetary policy. Why Three Systems?At first glance, CBDCs, stablecoins and digital banking money seem similar: all are digital, and all show as numbers on a screen. But the difference lies in who stands behind the promise. With bank deposits, the promise comes from a commercial bank. With stablecoins, it comes from a private issuer managing reserves. With a CBDC, the promise comes directly from the central bank and by extension from the state. The first carries some credit risk, the second depends on private audits, and the third is as secure as the sovereign itself. Each system also serves different goals. Stablecoins promote innovation and global connectivity. CBDCs safeguard public trust and monetary sovereignty. Digital banking remains central to lending, investment, and financial intermediation. Their coexistence represents not competition but an evolution of money into distinct but connected layers. Timeline of Key Developments2014–2017: Bitcoin and early cryptocurrencies popularise blockchain-based value transfer.2018–2020: USDT, USDC, and other stablecoins gain widespread use in crypto trading.2020: China begins large-scale pilot of the digital yuan (e-CNY).2021–2023: Central banks accelerate CBDC research.2023: The European Central Bank confirms the preparation phase of the digital euro.2024–2025: MiCA regulation introduces stablecoin supervision in Europe.2025: DWS and partner institutions launch regulated euro-stablecoin.2027–2028: Target window for potential digital euro rollout. The Future LandscapeAs digital money matures, users will have multiple choices. Bank accounts will remain the core of credit and finance. Stablecoins will continue to dominate blockchain ecosystems and fast international payments. CBDCs will ensure access to secure, state-issued money for everyone in a digital economy. The interaction among these systems will shape how individuals, businesses, and governments use and think about money. The distinction between them may seem technical, yet it reflects one of the most significant changes in financial history: the redefinition of what counts as “money” itself. Whether issued by a bank, a private company, or the central bank, the key question for users will increasingly be not how digital their money is, but who stands behind it.---Newnex is venture capital made efficient - VCs, LPs and Startups connect with verified peers and co-invest and raise directly and privately with references and without intermediaries. <a href="https://newnex.io" rel="noopener noreferrer" target="_blank">Get Access to Newnex</a> <a href="https://newnex.io" rel="noopener noreferrer" target="_blank">https://newnex.io</a>

The Future of Money: How Stablecoins, CBDCs and Digital Banking Are Redefining the Financial System

In a game-changing move for India’s innovation landscape, eight powerhouse U.S. and Indian venture capital (VC) and private equity (PE) firms have launched the India Deep Tech Investment Alliance (IDTA), pledging over $1 billion over the next decade to fuel Indian-domiciled deep tech startups. Unveiled on September 2, 2025, at SEMICON India, this bold coalition aims to supercharge sectors like artificial intelligence (AI), semiconductors, quantum computing, robotics, biotech, and space tech, while cementing U.S.-India tech collaboration. Newnex dives into the details of this historic initiative and what it means for India’s startup ecosystem. The Heavyweights Behind the Alliance The IDTA brings together a stellar lineup of investment firms with deep expertise in backing cutting-edge ventures. The founding members are: - Accel: A global VC titan known for spotting early-stage tech winners, with a strong presence in India’s startup scene.- Blume Ventures: A 14-year veteran of Indian deep tech, backing trailblazers in warehouse automation and satellite tech.- Celesta Capital: The U.S.-based VC leading the charge, with investments in Indian space tech, drones, and AI-driven diagnostics.- Gaja Capital: An Indian PE firm focused on scaling tech-driven businesses with global potential.- Ideaspring Capital: A go-to for early-stage deep tech, championing transformative ideas in AI and robotics.- Premji Invest: The investment arm of Wipro’s Azim Premji, bringing long-term capital to strategic sectors.- Tenacity Ventures: A VC player targeting tech companies blending deep expertise and innovation.- Venture Catalysts: India’s top seed-stage investor and incubator, known for its mentorship and vast network. Leading the alliance is Arun Kumar, Managing Partner at Celesta Capital and former KPMG India CEO, who chairs the IDTA’s Advisory Committee. Joined by reps from Accel, Premji Invest, and Venture Catalysts, the committee will steer the alliance while letting each firm flex its own investment strategy. The IDTA is already eyeing expansion, planning to rope in more global and Indian investors to amplify its impact. Tackling India’s Deep Tech Funding Crunch Deep tech startups—think AI, quantum computing, or biotech—require hefty R&amp;D and time to scale, making them riskier bets than India’s e-commerce or food delivery giants. This funding gap hit the spotlight earlier this year when India’s Commerce Minister sparked debate by calling out startups for chasing quick wins over innovation. Founders fired back, pointing to a lack of capital for deep tech ventures. The IDTA is stepping up to fill this void with patient, long-term capital, perfectly timed with the Indian government’s ₹1 trillion ($11 billion) Research, Development, and Innovation (RDI) scheme from the 2024-25 budget. This scheme pushes startups to incorporate in India to tap incentives, and the IDTA is all in, focusing on Indian-domiciled companies to drive local innovation. “Semiconductors, deep tech, and AI are India’s shot at leading the next global tech wave,” said a Venture Catalysts spokesperson. “With over 3,600 deep tech startups—74% of them AI-driven—and ₹20,000 crore in government backing via the India Semiconductor Mission, the momentum is unstoppable.” What’s on the Table: Investments and Focus Areas The IDTA is zeroing in on early-stage startups (seed to Series B) in high-stakes sectors: - Artificial Intelligence (AI): Dominating India’s deep tech scene, with 74% of startups AI-focused.- Semiconductors: Riding the wave of India’s Semiconductor Mission and its ₹20,000 crore push.- Space Tech: Backing ventures like satellite and launch innovators.- Quantum Computing, Robotics, Biotech, Medical Devices, Energy, and Climate Tech: Solving global challenges with cutting-edge solutions. The alliance’s $1 billion-plus pledge will roll out over five to ten years, with each firm contributing independently while sharing mentorship, global networks, and market access. Beyond funding Indian startups, the IDTA will help U.S. and global portfolio companies break into India’s booming market. “Deep tech is the next big thing, and the U.S.-India corridor is where it’s happening,” said a Celesta Capital leader. “With the RDI scheme as a catalyst, we’re ready to back the next wave of world-changing companies.” Syncing with U.S.-India Tech Goals The IDTA dovetails with the TRUST initiative, launched by U.S. and Indian leaders in February 2025 to boost collaboration in critical technologies. Even with trade tensions like U.S. tariffs on Indian goods, the alliance signals a shared commitment to innovation. Arun Kumar noted, “This is about aligning with both nations’ strategic priorities in emerging tech.” The coalition will also work with policymakers to shape incentives and regulations, ensuring private capital amplifies government efforts like the India Semiconductor Mission. Proven Players, Big Wins The alliance’s members aren’t new to deep tech. Celesta Capital has backed space tech, drone, and AI-diagnostic startups, while Blume Ventures has powered ventures in automation, carbon capture, satellites, and defense optics. Ideaspring Capital and Accel have fueled early-stage innovators with global ambitions. “India’s deep-tech founders are ready to build and export solutions worldwide,” said an Accel partner. “With talent, policy, and capital aligning, the sky’s the limit.” Challenges and the Road Ahead The IDTA’s ambition isn’t without hurdles. Many Indian deep tech startups incorporate in the U.S. for better funding and infrastructure, a trend the alliance hopes to reverse by making India a more attractive hub. Coordinating eight competitive firms demands trust to avoid red tape or clashing priorities. Policy shifts could also shake things up. Still, the IDTA’s blend of pooled capital and individual freedom is a fresh take on cross-border VC collaboration. With mentorship and policy engagement, it’s poised to reshape India’s deep tech landscape. Newnex Takeaway The India Deep Tech Investment Alliance is a bold bet on India’s innovation potential. With Accel, Blume Ventures, Celesta Capital, Gaja Capital, Ideaspring Capital, Premji Invest, Tenacity Ventures, and Venture Catalysts committing over $1 billion, the IDTA is set to bridge the funding gap for India’s 3,600+ deep tech startups. Backed by the government’s RDI scheme and U.S.-India strategic ties, this alliance could make India a global deep tech powerhouse.______ NEWNEX is a verified global network and platform for VCs and Institutional Investors to connect, syndicate and co-invest without intermediaries - directly and privately. Join now <a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

U.S.-India VC Alliance Commits Over $1B to Power India’s Deep Tech Revolution

The European Long-Term Investment Fund (ELTIF) is one of the EU’s most ambitious innovations in financial markets. Introduced in 2015, ELTIFs were designed to bridge Europe’s chronic investment gap by channeling private capital into infrastructure, real assets, and small and medium-sized enterprises (SMEs). They align with the EU’s Capital Markets Union (CMU) strategy: making European savings work harder for long-term growth. The first generation, ELTIF 1.0, had limited success. But with the launch of ELTIF 2.0 in January 2024, the regime has been revamped to improve flexibility, broaden access, and meet both institutional and retail investor needs. Now, ELTIFs are poised to become a mainstream investment vehicle, combining patient capital, diversification, and regulatory safeguards. This guide breaks down what ELTIFs are, how they work, their benefits and risks, and what the new reforms mean for investors and Europe’s economy.What Are ELTIFs? European Long-Term Investment Funds (ELTIFs) are EU-regulated investment funds governed by Regulation (EU) 2015/760, revised under ELTIF 2.0 in 2024. They are a type of Alternative Investment Fund (AIF) managed by authorized Alternative Investment Fund Managers (AIFMs). ELTIFs channel investor capital into long-term, illiquid assets, such as:<ul><li>Infrastructure projects (renewable energy, transport, digital networks).</li><li>Real estate with social or economic value.</li><li>Private equity in unlisted companies and SMEs.</li><li>Sustainable investments such as green bonds.</li></ul> What sets them apart is that both institutional and retail investors can participate, with ELTIFs benefiting from an EU-wide marketing passport. This pan-European reach democratizes access to private markets while offering regulatory protection.Think of ELTIFs as a hybrid between private equity funds and mutual funds: they invest in long-term projects traditionally reserved for large institutions but are structured under EU regulation to be more widely accessible. Why Were ELTIFs Created?The EU identified three structural problems in European finance:<ol><li>Over-reliance on banks: Unlike the U.S., Europe has historically depended on bank lending, leaving infrastructure and SMEs underfunded.</li><li>Short-termism in markets: Traditional funds and ETFs prioritize daily liquidity and quarterly results, not long-horizon projects.</li><li>Underutilized savings: European households hold more than €14 trillion in savings, much of it in low-yield bank deposits.</li></ol> ELTIFs were designed to address these challenges by:<ul><li>Supporting the real economy: Financing growth companies, infrastructure, and sustainability projects.</li><li>Opening private markets to retail investors: Allowing individuals to diversify beyond stocks and bonds.</li><li>Promoting cross-border investment: Leveraging the EU single market to distribute ELTIFs across member states.</li><li>Aligning with ESG and climate goals: Funding green energy, sustainable real estate, and climate transition.</li></ul> Key Features of ELTIFs1. Regulatory Oversight<ul><li>Supervised by national competent authorities (NCAs).</li><li>Operate under the AIFMD (Alternative Investment Fund Managers Directive).</li><li>Benefit from EU-wide marketing passporting.</li></ul>2. Investment Focus<ul><li>55%+ of NAV in eligible assets (down from 70% under ELTIF 1.0).</li><li>Eligible assets include unlisted companies, listed SMEs (market cap ≤ €1.5 billion), real assets, green bonds, and even global assets.</li><li>Remaining assets can be invested in liquid securities for flexibility.</li></ul>3. Structures<ul><li>Can be closed-ended (fixed maturity) or semi-open with redemption windows.</li><li>Options include fund-of-funds, master-feeder structures, and semi-liquid ELTIFs with secondary matching mechanisms.</li></ul>4. Marketing and Distribution<ul><li>Open to both professional (pension funds, insurers) and retail investors.</li><li>Retail rules simplified under ELTIF 2.0:</li><li class="ql-indent-1">No €10,000 minimum investment.</li><li class="ql-indent-1">No 10% portfolio cap for investors with &lt;€500,000 portfolios.</li><li class="ql-indent-1">Suitability tests aligned with MiFID II.</li></ul>5. Leverage and Diversification<ul><li>Retail ELTIFs: Borrowing up to 50% of NAV.</li><li>Professional ELTIFs: Borrowing up to 100% of NAV, with concentration and diversification limits largely removed.</li></ul> How ELTIFs Work: Mechanisms Explained Investment StrategyELTIF managers target assets with long-term value creation. These could be financing a new data center, developing renewable energy parks, or supporting mid-sized companies preparing to scale.Portfolio Composition<ul><li>Retail ELTIFs must diversify across assets (no more than 20% in a single undertaking).</li><li>Professional ELTIFs can pursue concentrated strategies with full flexibility.</li></ul>Liquidity and RedemptionA major innovation in ELTIF 2.0 is the introduction of redemption flexibility:<ul><li>Periodic redemptions (quarterly or less frequent).</li><li>Notice periods tied to liquidity levels (from 1 month if 40% liquid assets to 12 months if fully illiquid).</li><li>Liquidity management tools (LMTs) such as swing pricing, anti-dilution levies, redemption gates.</li><li>Secondary market matching: Investors can sell their shares via a platform or liquidity window, matched with buyers at NAV.</li></ul> Valuation and Reporting<ul><li>Assets must be valued under robust frameworks aligned with AIFMD.</li><li>Managers must report changes in redemption policies within 3 days to regulators.</li><li>Service providers (administrators, transfer agents, custodians) play a key role in compliance.</li></ul> Benefits of ELTIFsFor Investors<ul><li>Diversification: Access to alternative assets usually unavailable in public markets.</li><li>Return potential: Illiquid assets offer an “illiquidity premium” over liquid securities.</li><li>Regulatory protections: Strong oversight under EU law.</li><li>Retail access: Democratization of private equity and infrastructure investing.</li></ul>For Fund Managers<ul><li>Flexibility: Broader eligible assets, higher leverage limits, semi-liquid structures.</li><li>Scalability: Ability to market across the EU, tapping both retail and institutional pools.</li><li>Alignment with ESG: Many ELTIFs target green, social, and sustainable projects.</li></ul>For the European Economy<ul><li>Capital mobilization for infrastructure, green transition, and innovation.</li><li>SME growth: Providing equity and debt financing to mid-sized companies.</li><li>Job creation and competitiveness across industries.</li></ul> Risks and ChallengesDespite their promise, ELTIFs carry risks:<ul><li>Illiquidity risk: Redemption options are limited; investors must commit long-term.</li><li>Valuation uncertainty: Private assets are harder to price, requiring strong governance.</li><li>Liquidity mismatch: Redemption policies must carefully balance investor needs with illiquid holdings.</li><li>Operational complexity: Semi-liquid funds require sophisticated infrastructure and distribution.</li><li>Regulatory risk: RTS requirements (e.g., liquid asset buffers up to 40%) may reduce returns.</li></ul> ELTIF 1.0 vs ELTIF 2.0 Feature ELTIF 1.0 ELTIF 2.0 (2024) Eligible Assets Narrow (EU-based, strict thresholds) Expanded (global, securitized assets, green bonds, FoFs) Retail Investor Barriers €10,000 minimum; 10% exposure cap Barriers removed; simplified suitability tests Liquidity Locked-in until maturity Redemption windows, matching mechanisms, LMTs Diversification 10% per asset cap Relaxed to 20% (retail); removed for professional funds Leverage 30% NAV 50% (retail), 100% (professional) Market OutlookThe ELTIF market is still young but growing fast. As of 2025:<ul><li>Over 100 ELTIFs authorized across the EU, with Luxembourg leading (62% market share).</li><li>Asset managers are launching semi-liquid ELTIFs, inspired by the success of similar funds in the Nordics and U.S. “retail alts.”</li><li>Surveys suggest strong optimism: nearly 50 market participants in early 2025 expected rising adoption, particularly as retail demand for alternative assets grows.</li></ul> Challenges remain — notably liquidity rules under the RTS, which some managers consider restrictive. Closed-ended ELTIFs with secondary market matching may dominate, while truly open-ended structures could face hurdles.Still, the opportunity is vast: redirecting even a fraction of Europe’s household savings into ELTIFs could unlock hundreds of billions annually for long-term growth and sustainability. Who Should Consider ELTIFs?<ul><li>Retail investors seeking long-term diversification into alternatives.</li><li>High-net-worth individuals comfortable with illiquidity in exchange for higher potential returns.</li><li>Institutional investors looking for regulated, pan-European vehicles to invest in infrastructure and private equity.</li><li>Impact-driven investors interested in green, social, and sustainable projects aligned with EU policy.</li></ul> ELTIFs embody the EU’s ambition to transform idle savings into engines of long-term growth. With ELTIF 2.0, they are now more flexible, accessible, and scalable — opening alternative assets to a broader audience while supporting Europe’s infrastructure, SMEs, and climate goals.For investors, ELTIFs offer an attractive opportunity to diversify, capture illiquidity premiums, and align portfolios with sustainable growth. For the EU, they represent a cornerstone in financing its digital, green, and competitive future. The next few years will be decisive: if asset managers can balance liquidity with performance, and if retail investors embrace patient capital, ELTIFs may well become the mutual funds of Europe’s long-term economy. Disclaimer: This article reflects regulations and market conditions as of August 2025. Investors should seek professional advice before committing to ELTIFs, as they involve complex risks and long-term commitments. Join NENWEX - the verified institutional VC-LP Network to collaborate and syndicate without intermediaries - join and get verified now www.newnex.io

A Comprehensive Guide to European Long-Term Investment Funds (ELTIFs): Unlocking Patient Capital for Europe’s Future

London, UK – The global private markets are gearing up for a significant resurgence in 2025, buoyed by an accelerating innovation supercycle, an improving liquidity landscape, and the potential for favourable policy shifts. This optimistic outlook comes from Adams Street Partners' fifth annual "2025 Global Investor Survey: Navigating Private Markets," which gathered insights from 200 limited partners (LPs) and financial advisors (FAs) across the US, Europe, and APAC. After navigating several years of "tempestuous" conditions, marked by subdued dealmaking, exit activity, and fundraising following an "unsustainable level of exuberance" in 2021, the market is showing clear signs of recovery. A 25% rebound in global private equity and venture capital dealmaking value in 2024 indicates a cautious but growing optimism for steadily improving market conditions in the year ahead and beyond. Investors are increasingly optimistic that a recovery in dealmaking will boost liquidity, which in turn could drive fundraising as reinvested capital increases – a positive flywheel effect. This confidence is underpinned by the strong belief among survey respondents that private markets will outperform public markets over the long term. This outperformance is attributed to factors like lower volatility, superior governance, innovation, and the inherent agility of fast-growing private companies. As Richard Turnill, Senior Bursar at Trinity College Cambridge, notes, private market valuations tend to adjust more slowly and modestly than public market equivalents, making them less susceptible to short-term volatility. Preqin forecasts that private markets could grow from $15 trillion in 2023 to nearly $30 trillion by 2033. Key Drivers Propelling Private Market Growth: <ul><li>The Artificial Intelligence (AI) Revolution:</li><li class="ql-indent-1">AI is identified as a pivotal driver of value creation, standing at the forefront of what could be the most far-reaching technological revolution in history. The survey highlights the expectation of a proliferation of AI-leveraging startups across all economic sectors, significantly boosting labour productivity.</li><li class="ql-indent-1">Early-stage AI-native startups are attracting substantial capital, capturing almost half of the $209 billion in global venture deal value in 2024. Investment in AI and machine learning startups surged by over 50% to $131.5 billion in 2024, accounting for 35.7% of all venture dollars globally.</li><li class="ql-indent-1">Brijesh Jeevarathnam, Partner &amp; Global Head of Fund Investments at Adams Street Partners, notes that this "combination of customer and fast-paced innovation cycle fuels venture capital investments today". Marcus Lindroos, Principal, Primary Investments, reinforces that "Venture capital is an interesting opportunity for investors to capture technological innovation".</li><li class="ql-indent-1">This AI-driven innovation supercycle, coupled with the accelerating digital transformation of the global economy, is expected to underpin growth in private markets in the year ahead.</li></ul> <ul><li>Favourable Policy Changes and Regulatory Environment:</li><li class="ql-indent-1">The prospect of lower interest rates, regulatory streamlining, tax adjustments, and reduced antitrust scrutiny could create a more conducive environment for private market participants.</li><li class="ql-indent-1">A potential relaxation of stringent initial public offering (IPO) application rules may also boost this crucial exit route. Global IPO volumes saw a slight increase to $123 billion in 2024.</li><li class="ql-indent-1">Under a potential US President Donald Trump administration, expectations include reduced regulation and a more lenient approach to mergers and acquisitions (M&amp;A), which could benefit markets by boosting growth and easing compliance burdens. Jason Malinowski, CIO at SCERS, anticipates overall deal volumes in 2025 to fall between 2021 and 2023 levels, partly due to a reduction in the bid-ask spread and more realistic valuation expectations from founders.</li></ul> <ul><li>Pent-Up Demand and Realistic Valuations:</li><li class="ql-indent-1">A plentiful supply of capital, more realistic valuation expectations, and pent-up demand for dealmaking and liquidity are creating highly favourable conditions for private markets investors.</li><li class="ql-indent-1">US private equity managers currently hold an eight-year inventory of companies they are eager to sell. The gradual reawakening of the IPO market is a clear signal that the pent-up demand for dealmaking may be reaching a pivot point.</li><li class="ql-indent-1">Growth equity valuations have stabilised, with a renewed focus on "profitable growth" over a "growth-at-all-costs mentality," according to Brijesh Jeevarathnam.</li></ul> Key Strategies and Sectors Drawing Investor Interest: <ul><li>Private Credit: This asset class has been a strong performer, with Assets Under Management (AUM) reaching a record $1.6 trillion by the end of 2023, accompanied by $520.2 billion in dry powder. Investors are drawn to its attractive relative yields, better pricing, capital structure seniority, and robust credit protections, making it a "compelling risk-return proposition". While direct lending remains a mainstay, specialty finance, opportunistic credit solutions, and Net Asset Value (NAV) lending are seeing significant growth.</li><li>Co-investments: LPs are highly bullish on co-investments, with 88% planning to allocate up to 20% of their capital to this strategy. Valued for their favourable economics, diversification potential, and ability to foster deeper GP relationships, co-investments are seen as an increasingly vital tool for lead sponsors to complete large transactions.</li><li>Secondary Investments: Solidifying its role as a crucial portfolio rebalancing and liquidity management tool, the secondaries market saw transaction volume rise 45% to a record $162 billion in 2024. GP-led deals, particularly continuation vehicles, are gaining traction, offering potential for outsized risk-adjusted returns. Secondary investments also offer a compelling entry point for individual investors, providing access to more mature assets with lower risk, shorter durations, and greater liquidity.</li><li>Venture and Growth Equity: Investor enthusiasm is improving, with 26% of respondents planning to deploy more capital into venture capital this year, representing the largest increase among all strategies. Driven by AI and digital transformation, these areas continue to attract significant investment, with a renewed focus on the quality and sustainability of growth.</li><li>Technology and Healthcare: Consistently identified by 47% of LPs as the most promising sectors for private markets investments in 2025, driven by AI-driven innovation and digital transformation.</li></ul> Challenges and Geopolitical Headwinds: Despite the optimism, investors face significant challenges. Inflation (86%), interest rates (83%), international geopolitical risks (83%), and domestic political instability (74%) are identified as top concerns for LPs. More than 80% of survey respondents expect geopolitical events to impact their investment decision-making, with US-China trade tensions (54%), the Ukraine-Russia war (53%), and US political instability (37%) being key considerations. Potential policy shifts under a US President Donald Trump administration, including higher tariffs, could be inflationary and hinder growth. Furthermore, investor enthusiasm for environmental, social, and governance (ESG)-focused opportunities appears to be waning, with only 31% ranking it among the most attractive opportunities for 2025, down from 46% last year. This shift is partly attributed to ESG becoming politically divisive in some markets, especially parts of the US, and potential policy rollbacks concerning climate action, such as the US withdrawal from the Paris climate agreement in January 2025. However, the broader "energy transition" theme continues to influence investment decisions across various strategies. Geographically, North America and Europe remain top investment preferences for 62% of LPs. China's appeal has declined to 11%, while interest in emerging Asia-Pacific (such as India and Southeast Asia) has risen to 38%. A Strategic Window of Opportunity The outlook for private markets in 2025 is decidedly more optimistic, driven by increased dealmaking and liquidity, which are expected to catalyse a rebound in fundraising across buyout, secondary, co-investment, and private credit strategies. The "unstoppable trend" of AI will continue to drive significant investment in venture and growth equity. As private markets evolve and become more accessible, innovation in product design and new investment structures are anticipated, creating a dynamic landscape ripe with diverse opportunities for growth and value creation. Managers looking to attract new capital will need to demonstrate deep sector and subsector expertise (43%), individual portfolio manager experience (38%), advanced digital analytics and reporting (35%), and an ability to execute large and complex deals (35%). The current environment presents a strategic window of opportunity for astute investors and managers. Read more: <a href="https://www.adamsstreetpartners.com/insights/2025-global-investor-survey" rel="noopener noreferrer" target="_blank">https://www.adamsstreetpartners.com/insights/2025-global-investor-survey/</a>--------Join the verified VC-LP institutional network - where VCs connect directly, no intermediaries - Free to Join <a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

Private Markets Set for Resurgence in 2025, Driven by AI, Liquidity, and Policy Shifts, Global Survey Reveals

Continuation vehicles are becoming important in today’s private investment world. They allow investment managers to keep holding onto their best-performing assets longer, instead of being forced to sell them when their original fund reaches its end. If you’re new to the concept or just want a clear overview, here’s everything you need to know - from what they are to how they get set up and why they matter. What Are Continuation Vehicles?Think of a continuation vehicle as a new investment fund created specifically to take over and hold a company or asset that’s doing well. Usually, VC funds have fixed lifespans - typically 10 years with extensions. However, some assets need more time to reach their full potential. Rather than selling these assets prematurely, managers set up a continuation vehicle so they and investors can keep benefiting from growth. Imagine you’re a VC firm. Your firm owns some stake in a company, but when your fund’s term ends, you’d normally have to sell. Instead, you start a new fund (the continuation vehicle) that buys the stake from your original fund and raises money from new or existing investors willing to stay for the long haul. Why Use Continuation Vehicles?<ul><li>More Time to Grow: Good companies often need extra years to fully mature and create value.</li><li>Investor Flexibility: Some investors may want to exit, while others may want to roll their stakes forward into the new vehicle.</li><li>Strong Commitment: The managers themselves typically invest their own money too, aligning their success with yours.</li></ul> Key Features You Should Know<ul><li>Fees: Most continuation vehicles today charge a low management fee - usually 1% or less per year on invested capital. This is a shift from higher fees, driven by investor demands for fair pricing.</li><li>Performance Bonuses: Managers earn extra rewards if the asset performs well, with carried interest often rising to 30% after hitting certain return milestones.</li><li>Governance: Investors get protections like approval rights, “key person” clauses that protect against sudden departures, and the ability to remove managers for misconduct.</li><li>Follow-On Capital: Many vehicles put aside extra capital (“dry powder”) to fund additional growth activities, like acquisitions or expansion, rather than just holding the asset passively.</li></ul> How Are Continuation Vehicles Set Up?<ol><li>Selecting the Asset: The GP (general partner or manager) identifies a company or group of companies (assets) that has strong growth potential but may need more time.</li><li>Investor Check: The GP gauges who among existing investors wants to stay in (rollover) or cash out.</li><li>Fair Valuation: An independent review ensures the price for transferring the asset to the new vehicle is fair to all parties.</li><li>Forming the Vehicle: A new fund or company is established with agreed terms on fees, duration (usually five years plus extensions), carried interest, and governance rules.</li><li>Aligning Interests: The GP usually invests their own money or rolls over previous earnings, ensuring they have “skin in the game.”</li><li>Governance Protections: Key person triggers, LP removal rights, and lead investors are put in place for oversight.</li><li>Raising Reserves: Capital is raised not only to buy the asset but also to fund follow-on opportunities.</li><li>Launch and Manage: The continuation vehicle launches, and the GP actively manages and grows the investment while keeping investors informed.</li></ol> An example:Picture a venture capital fund backing an UK tech startup. The fund nears its end, but the startup is just hitting profitability and needs more capital and time. Instead of selling, the VC sets up a continuation vehicle, inviting willing investors to roll their stakes or cash out at a fair price. The new vehicle raises extra “dry powder” to fuel further growth. The GP invests personally, management rights and terms are agreed, and the whole group is poised to potentially reap greater rewards over the next five years. What Should Investors Watch For?If you’re considering investing via a continuation vehicle, keep these in mind:<ul><li>Check that management fees are reasonable, ideally 1% or less.</li><li>Look for tiered carried interest that rewards strong performance.</li><li>Ensure the GP has committed their own capital—this shows confidence and alignment.</li><li>Verify governance features like key person clauses and removal rights.</li><li>Confirm there’s reserve capital available for ongoing growth, not just a holding vehicle.</li></ul> Continuation vehicles are about giving great investments the time and resources they need to thrive, while offering flexibility to investors and alignment with managers. They bring transparency, discipline, and opportunity to private markets. As this structure gains popularity, especially in fast-growing markets like India, it’s worth understanding how they work and why they’re becoming a standard tool for serious private investors. 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Understanding Continuation Vehicles: A Simple Guide to Structure, Setup, and Benefits for VCs

Venture capital (VC) investment in Europe experienced a modest decline in the second quarter of 2025, reflecting growing investor caution amid an uncertain geopolitical and trade environment. According to recent data, total VC funding dropped from $16.3 billion in Q1 2025 to $14.6 billion in Q2 2025. More notable than the slight dip in investment amounts was the sharper fall in deal volume. The number of deals decreased by over 26%, falling from 2,358 in the first quarter to 1,737 in Q2. This significant reduction highlights investors' more selective approach and reluctance to commit in an increasingly unpredictable market landscape. For entrepreneurs and startups, this trend signals a potential tightening of available capital, particularly affecting early-stage companies that rely heavily on seed and Series A funding rounds. Investors appear to be reserving funding for ventures with robust business models, proven traction, and clearer pathways to profitability.Analysts suggest that the cautious stance stems from multiple factors, including ongoing geopolitical tensions in key regions, volatile trade relations, and concerns over global economic growth. In this environment, venture capitalists are prioritizing risk management, which translates to fewer but potentially larger or higher-quality deals. Despite the slowdown, Europe’s innovation ecosystem remains resilient. Sectors like fintech, green technology, and health tech continue to attract investor attention due to their long-term growth potential and alignment with global sustainability goals.For startups seeking funding, the current climate recommends sharpening business strategies, emphasizing revenue generation, and demonstrating clear differentiation. Founders should also be prepared for longer negotiation processes and potentially more demanding due diligence as investors become more vigilant. ---Join Newnex - The Exclusive VC &amp;LP Institutional Investors Only Platform to Connect, Syndicate, and Co-Invest Directly Without Intermediaries <a href="https://newnex.io/" rel="noopener noreferrer" target="_blank">https://newnex.io</a>

Venture Capital Investment in Europe Experiences Modest Slowdown in Q2 2025

The European Investment Bank (EIB) is poised to invest a substantial €70 billion into Europe's technology sector by 2027. This ambitious initiative, dubbed TechEU, aims to significantly close the innovation gap with the United States and strengthen Europe's position in emerging technologies, including crucial areas such as artificial intelligence (AI) and military drones. TechEU is described as the European Investment Bank Group’s platform dedicated to accelerating innovation across Europe, connecting innovators to funding and expertise to help bring "game-changing technologies to market". It will establish a centralised hub for financing requests from researchers and companies, seeking to streamline and accelerate EU funding processes. EIB President Nadia Calviño has underscored the bank's renewed willingness to embrace risk in its financing strategies, recognising this as pivotal for startups operating in fast-moving markets. A key operational change under TechEU will see the EIB process startup financing applications within six months, a significant improvement from the current 18-month timeframe. Calviño describes this accelerated timeline as a 'gamechanger,' essential for keeping pace with the rapid nature of tech innovation. This substantial investment is also expected to act as a catalyst for much larger private investment. The EIB projects that its backing, through plans to co-invest with private investors, could unlock up to €250 billion for the European tech ecosystem by inspiring confidence and mitigating risk. Beyond innovation, the EIB has explicitly prioritised defence and security within its portfolio, acknowledging the strong synergies between these sectors and technological advancements. The EIB’s dedicated Security and Defence Office serves as a one-stop shop for financial support and expert assistance for businesses and innovators in these critical areas. This approach ensures that investments in defence can stimulate broader technological development, thereby fortifying Europe’s overall technological agenda. Digitalisation and technological innovation are also among the EIB's core priorities. The initiative comes at a time when the current geopolitical landscape, including uncertainties generated by US economic policies, is seen by Calviño as an opportunity for Europe to attract international investors due to its inherent stability and market potential. The European Investment Fund (EIF), as part of the EIB Group, also contributes to the TechEU initiative. The EIF aims to make it easier for Small and Medium-sized Enterprises (SMEs) and infrastructure projects to access finance, thereby contributing to the EIB Group's priorities and the EU's strategic policy objectives. As a large implementing partner for InvestEU, the EIF is aiming to generate approximately €145 billion in investments for businesses. The EIB is awaiting approval for this initiative from the 27 EU finance ministers, which is expected to take place next month. This strategic move by the EIB directly supports broader European Union strategic priorities. The European Commission, as the EU’s main executive body, sets priorities for 2024-2029. Among these are Competitiveness and Security and defence. The EIB's investment in technology and defence directly aligns with these overarching EU goals, demonstrating how European financial institutions contribute to the EU's vision for a stronger, more secure, and technologically advanced Europe.---Join Newnex - The Exclusive VC &amp;LP Institutional Investors Only Platform to Connect, Syndicate, and Co-Invest Directly Without Intermediaries <a href="https://newnex.io/" rel="noopener noreferrer" target="_blank">https://newnex.io</a>

 European Investment Bank is poised to invest €70 billion into Europe's technology sector by 2027.

On August 7, 2025, President Trump issued an executive order encouraging expanded access to private equity and other alternative investments in 401(k) plans. The Order directs the Department of Labor (DOL), in coordination with the Securities and Exchange Commission (SEC) and the Treasury, to facilitate greater availability of these asset classes to 401(k) investors. While the Order does not change ERISA’s substantive requirements, it signals a significant policy shift and opportunity for asset managers. Five Immediate Action Items for Managers, according to Ropes &amp; Gray LLP 1. Act Now, Don’t Wait for Further Guidance:&nbsp;&nbsp;&nbsp;&nbsp;The Order is a call to action for rapid innovation. Managers should begin product development immediately to capitalize on the momentum, remaining flexible to adapt as further guidance emerges. 2. Assess and Build Capabilities:&nbsp;&nbsp;Managers must evaluate their current capabilities and identify what needs to be developed to serve 401(k) investors, such as establishing or partnering with trust companies for collective investment trusts (CITs) and sourcing ongoing investment opportunities. 3. Address Liquidity and Valuation Challenges:&nbsp;&nbsp;401(k) plans have unique liquidity needs. Managers must create products that can handle frequent participant transactions and provide consistent daily net asset value (NAV) reporting, especially when alternatives are included as a sleeve in target date funds (TDFs). 4. Leverage TDF Provider Relationships:&nbsp;&nbsp;&nbsp;Asset managers should form or strengthen relationships with TDF providers or design products that can integrate into multiple TDFs, enabling broader exposure to alternatives for plan participants. 5. Prioritize Fiduciary Compliance:&nbsp;&nbsp;&nbsp;&nbsp;All product structures must ensure ERISA fiduciary compliance at every level, supporting plan fiduciaries in making prudent and well-documented investment decisions. Five Key Takeaways from the Executive Order 1. Affirmative Stance on Alternatives:&nbsp;&nbsp;&nbsp;&nbsp;The Order reframes access to alternatives as an affirmative right for plan participants, urging fiduciaries to consider these options rather than avoid them due to novelty or perceived risk. It may also lead to rescinding prior guidance that discouraged alternatives. 2. Focus on Reducing Litigation Risk:&nbsp;&nbsp;&nbsp;&nbsp;The Order acknowledges litigation risk as a barrier and instructs the DOL to prioritize actions that may curb ERISA litigation, aiming to make plan sponsors more comfortable with offering alternatives. 3. Neutral Approach to Asset Types:*&nbsp;&nbsp;&nbsp;The Order is agnostic regarding types of alternative assets, allowing for a wide range of investments—private funds, real estate, cryptocurrencies (via actively managed vehicles), commodities, infrastructure, and lifetime income products—so long as fiduciary processes are followed. 4. Potential for Safe Harbors:&nbsp;&nbsp;&nbsp;&nbsp;The DOL is directed to consider new safe harbors for offering alternatives, which could provide additional comfort to managers and fiduciaries, though managers are encouraged to move forward without waiting for these to materialize. 5. DOL in the Lead, with SEC and Treasury Support:&nbsp;&nbsp;While the SEC and Treasury are to collaborate, the DOL will take the lead in regulatory guidance, potentially accelerating the process for bringing new alternative products to the 401(k) market. The Order is expected to spur innovation and expand investment options in 401(k) plans, while providing a more supportive regulatory environment for plan sponsors and asset managers considering alternatives. It signals a shift toward broader acceptance of alternative assets in retirement plans, provided fiduciary standards are maintained. Read the full article at Ropes &amp; Gray LLP <a href="https://www.ropesgray.com/en/insights/alerts/2025/08/planning-to-take-advantage-of-executive-order-on-alternatives-in-401k)." rel="noopener noreferrer" target="_blank">https://www.ropesgray.com/en/insights/alerts/2025/08/planning-to-take-advantage-of-executive-order-on-alternatives-in-401k</a> Disclaimer: This article is an analysis intended for informational purposes only and does not constitute investment advice. Join Newnex - The Exclusive VC Institutional Investors Only Platform to Connect, Syndicate, and Co-Invest Directly Without Intermediaries <a href="https://newnex.io/" rel="noopener noreferrer" target="_blank">https://newnex.io</a>

401(k) Pension Plans allowed greater access to Private funds and Crypto - learn more

August 13, 2025 – Korea Investment Partners (KIP), one of South Korea’s leading venture capital and private equity firms, has invested $10 million in SpaceX. While relatively small compared to the multi-billion-dollar rounds the company has attracted in recent years, the move signals growing international participation in the space sector’s most valuable private company. KIP’s entry comes as SpaceX is estimated to be valued at around $400 billion, placing it among the most valuable privately held enterprises in the world. Other Major Investors in SpaceXSpaceX’s investor base combines high-profile institutional backers, strategic technology funds, and early-stage venture capital pioneers:<ul><li>Elon Musk – retains a controlling interest exceeding half the company’s equity, ensuring founder-led strategic direction.</li><li>Founders Fund – long-term backer with a significant early stake.</li><li>Fidelity Investments – one of the largest institutional investors in SpaceX.</li><li>Alphabet (Google) – entered through a joint investment with Fidelity, securing a meaningful share.</li><li>Baillie Gifford – UK-based fund with positions in multiple Musk-led ventures.</li><li>Valor Equity Partners – a growth equity player with early commitments.</li><li>Sequoia Capital – joined in later rounds to bolster capital for scaling operations.</li><li>Draper Fisher Jurvetson – one of the earliest venture supporters of the company.</li><li>Gigafund – dedicated to backing SpaceX and related ventures.</li><li>Vy Capital – significant private investment group with deep ties to Musk’s companies.</li><li>RIT Capital Partners – a London-listed investment trust providing indirect public exposure.</li><li>Select public funds and ETFs – provide fractional indirect access for retail investors.</li></ul> SpaceX Remains a Magnet for CapitalValuation and Market LeadershipSpaceX has reached a valuation rarely seen for a private enterprise, driven by two dominant businesses — Starship, designed for deep-space missions and high-volume cargo transport, and Starlink, its rapidly expanding satellite internet service. Together, these form a vertically integrated aerospace and telecommunications ecosystem with both commercial and governmental demand. Investor Profile and Strategic AdvantagesThe investor mix is deliberately balanced between:<ul><li>Institutional anchors providing stability and long-term commitment.</li><li>Relationship-driven funds with access to secondary markets, enabling liquidity without compromising control.</li><li>Global investors from multiple continents, reflecting the cross-border appeal of the sector.</li><li>Public fund vehicles extending limited access to retail markets.</li></ul>Musk’s controlling stake allows the company to pursue transformative projects without short-term market pressure — an advantage in capital-intensive industries. Commercial MomentumStarship’s rapid development and Starlink’s accelerating subscriber growth are reshaping space economics. Starlink’s recurring subscription model complements the more cyclical, contract-based launch business, creating a dual-engine growth profile. SpaceX’s launch cadence now surpasses all other players in the industry, setting new operational benchmarks. IPO and Liquidity ProspectsWhile an IPO for the parent company is unlikely in the near term, a spin-off of Starlink into a separately listed entity remains a realistic scenario. Such a move could unlock investor access while insulating the core space exploration business from public market volatility. Risks and Headwinds<ul><li>Geopolitical and regulatory oversight due to the dual-use nature of space technologies.</li><li>Capital expenditure demands that require sustained investor confidence.</li><li>Competitive pressure from established aerospace firms and emerging private players.</li></ul> Strategic Patience May Pay OffKIP’s $10 million allocation is as much a statement of alignment with SpaceX’s long-term vision as it is a financial investment. For global investors, SpaceX represents a unique convergence of frontier technology, recurring revenue potential, and national strategic relevance. The company’s ability to retain founder control, attract a diversified global investor base, and execute on ambitious technological roadmaps places it in a category few can match. Over the next decade, the balance between visionary risk-taking and operational discipline will determine whether SpaceX can turn its unmatched technical lead into enduring dominance across both space transport and global communications. Financial Outlook and Scenario AnalysisSpaceX’s forward trajectory can be understood through its two main revenue drivers — Starlink and launch services — alongside emerging opportunities in in-space logistics and planetary exploration. Revenue Projections (2025–2032, USD billions) 2025: $8.25B → 2032: $27B (Base Case)<ul><li>Starlink: ~3.5M subscribers in 2025, growing toward 15M by 2032, with average monthly revenue per user starting at ~$75 and rising in enterprise, aviation, and maritime segments.</li><li>Launch Services: ~130 launches in 2025 generating ~$5B, scaling gradually as Starship enters regular service, enabling heavier payloads at lower cost.</li><li>Other Revenues: Government exploration contracts, lunar infrastructure projects, and commercial in-space servicing expected to expand late in the decade.</li></ul> Scenario Outlook<ul><li>Bull Case: Starship achieves rapid flight cadence by 2029, Starlink surpasses 20M subscribers, and government contracts scale. Revenues could exceed $40B by 2032, pushing valuation toward $800B–$1T.</li><li>Base Case: Balanced Starlink and launch growth, with exploration contracts adding incremental billions. Revenues reach ~$27B by 2032, supporting a valuation of $500B–$650B.</li><li>Bear Case: Technical or regulatory headwinds slow Starlink adoption and delay Starship. Revenues land near $18B by 2032, implying a valuation of $200B–$300B.</li></ul> Key Growth Drivers to Watch<ol><li>Starship’s operational cadence and reusability, which will dictate launch economics.</li><li>Enterprise adoption of Starlink, particularly in high-margin sectors like aviation and defense.</li><li>Multi-year government and defense partnerships that provide stable, large-scale contracts.</li><li>Regulatory access to high-population international markets.</li><li>Timing and structure of a potential Starlink spin-off to unlock value while preserving control.</li></ol> In every scenario, SpaceX’s outlook is anchored by its technological lead and diversified revenue streams. The bull case hinges on flawless execution of Starship and rapid Starlink penetration into enterprise markets. The bear case, while materially lower in value, still leaves SpaceX as one of the most strategically significant companies in aerospace and communications by 2032. Disclaimer: This article is an analysis intended for informational purposes only and does not constitute investment advice. Join Newnex - The Exclusive VC Institutional Investors Only Platform to Connect, Syndicate, and Co-Invest Directly Without Intermediaries <a href="https://newnex.io/" rel="noopener noreferrer" target="_blank">https://newnex.io</a>

Korea Investment Partners Makes Strategic $10 Million Entry into SpaceX

In the first half of 2025, the U.S. venture capital landscape revealed a stark divide, with just 12 firms securing over 50% of all venture capital raised, according to PitchBook’s analysis. This concentration underscores a growing trend where elite, multi-strategy firms dominate fundraising, while smaller and first-time fund managers face significant hurdles. Leading the pack, Founders Fund, co-founded by Peter Thiel, raised an impressive $4.6 billion in new funds, surpassing the combined total of $1.8 billion raised by 44 first-time fund managers, as reported in the Q2 2025 PitchBook-NVCA Venture Monitor. The top 30 firms accounted for 74% of the total capital raised, highlighting the bifurcation between large, established players and smaller, boutique funds. The fundraising environment remains challenging, particularly for new entrants. The median time to raise a venture fund hit a record 15.3 months in 2025, per the PitchBook-NVCA Venture Monitor, reflecting prolonged fundraising timelines. Limited partners (LPs), still overexposed to venture capital due to limited exits over the past two years, are cautious about new commitments, especially to first-time managers.Meanwhile, major players are poised for an even busier second half. Reports indicate that Andreessen Horowitz is in discussions to raise a fund potentially as large as $20 billion, with Khosla Ventures and Menlo Ventures also planning multi-billion-dollar funds, according to the Financial Times. This activity signals continued momentum for the industry’s heavyweights. However, not all is rosy for the venture ecosystem. Even established firms face challenges, as seen with partners like Sequoia’s Matt Miller and NEA’s Vanessa Larco launching their own ventures. These moves reflect confidence in new opportunities but also highlight the difficulty of securing LP support in a market where distributions remain low. Source: PitchBook, Financial Times Newnex Is The Exclusive Institutional Investors Only Platform to Connect, Syndicate, and Co-Invest Directly and Privately - Join for Free <a href="https://newnex.io" rel="noopener noreferrer" target="_blank">https://newnex.io</a>

12 elite VC firms hauled over 50% of the entire funds raised in Q1 2025

Venture capital (VC) investment sits at the heart of global innovation, funding the growth of startups that fuel technological progress and shape economic futures. As of August 2025, the venture capital landscape is being reinvented, driven by sectoral breakthroughs, shifting investor profiles, and a rapidly evolving global context. This article offers a thorough overview of current VC trends, explores the factors behind these changes, and outlines what stakeholders can expect moving forward. The State of Venture Capital in 2025 Venture capital has always been both a mirror and catalyst of broader innovation trends. In recent years, navigating persistent market volatility, recalibrating valuations, and the rise of breakthrough technologies like artificial intelligence have fundamentally changed how, where, and why capital is deployed. As VC adapts to these shifts, both challenges and fresh opportunities are emerging for investors, founders, and the wider ecosystem. Investment Volatility but Growing Optimism: Following a period of correction and cautious investing in 2023 and 2024, global venture activity is gradually regaining pace. Funding volumes rebounded in early 2024 but have remained somewhat volatile, with total global VC investment projected to rise from approximately $301.8 billion in 2024 to about $364.2 billion by the end of 2025. Revival of Exits: The IPO and merger &amp; acquisition (M&amp;A) markets regained momentum in late 2024, with expectations for continued improvement in exit activity throughout 2025. This is streamlining returns for funds and offering stronger incentives for new investments. Disciplined Valuations:ur After over-inflated valuations in the prior cycle, the recent correction has helped reset expectations, creating more realistic investment opportunities and reducing the frequency of down rounds. Sector-Specific Analysis Artificial Intelligence: AI continues to dominate, drawing about one-third of all global venture funding. Investment is concentrating in generative AI solutions, infrastructure tools, and vertical applications, a sign of the sector’s maturity and continued promise.Deep Tech &amp; Robotics: In 2025, <a href="https://govclab.com/2025/04/08/q2-2025-venture-trends-results/)" rel="noopener noreferrer" target="_blank">Deep Tech &amp; Robotics investment</a> has even outpaced AI in some quarters, reflecting growing demand for automation and resilient supply chains.Healthcare &amp; Biotech: Venture activity remains strong in healthcare, particularly in AI-driven diagnostics, digital health platforms, and biotech innovation for personalized medicine.Green Technologies &amp; Cleantech: Despite a dip in 2024, cleantech and green investments are rebounding, aligned with global ESG mandates and accelerated climate goals.Fintech: Financial technology is expanding, particularly in emerging markets, as startups leverage embedded finance and AI-powered compliance tools. Regional DynamicsNorth America remains the foundation of global VC funding, with hubs like Silicon Valley, but also rising centers including Austin and Miami. <a href="https://www.goingvc.com/post/a-year-in-review-the-state-of-venture-capital-in-2024)" rel="noopener noreferrer" target="_blank">U.S. investment</a> continues to focus on AI and green technologies.Europe saw a funding slowdown in 2024 but maintains strengths in AI, fintech, and cleantech, with the UK and Germany as notable innovation hubs.Asia’s overall investment dropped, mostly due to China, but India and Southeast Asia posted resilient growth in areas like fintech and sustainable urban solutions.Latin America is a standout, recording double-digit growth in venture activity, especially in fintech, e-commerce, and healthtech sectors. Investment Stages &amp; Deal Structures Seed and Early-Stage: There is a resurgence of seed and early-stage backing, with average deal sizes increasing by 35% year-over-year, indicating both investor confidence and the emergence of new entrepreneurial talent.Later-Stage: Larger rounds are more selective, with investors increasingly seeking clear paths to profitability.Evolving Deal Terms: More deals feature pay-to-play provisions and ESG terms, while alternative funding models like equity crowdfunding gain traction. Investor Profiles and Capital Sources Family Offices &amp; Sovereign Wealth Funds: These players are fueling much of the new capital, with long-term, innovation-driven mandates—particularly in AI and life sciences.Institutional Investors: Pension and insurance funds are scaling up allocations to VC, diversifying portfolios for higher returns.Corporate Investment: Technology giants are active through venture arms, often driving mega-rounds in AI and infrastructure.Democratic Capital: A trend toward democratization is visible, with more female-led funds and <a href="https://www.allvuesystems.com/resources/top-trends-in-venture-capital/)." rel="noopener noreferrer" target="_blank">diverse limited partners</a> Technological Impact: VC Adopts AI VC firms themselves are increasingly leveraging AI for sourcing deals, conducting due diligence, and portfolio monitoring. This not only boosts efficiency but also levels the playing field for emerging firms. However, it also raises regulatory scrutiny regarding algorithmic transparency and data privacy. Economic and Geopolitical Influences Interest Rate Sensitivity: Higher rates have made investors more cautious, but expected interest rate cuts could fuel renewed activity.Geopolitical Risk: Uncertainty related to global tensions, supply chain disruption, and cybersecurity is influencing where capital flows.Correction and Efficiency: The shakeout of 2022–2024 led to more disciplined investment practices, with a strong focus on capital efficiency and measurable growth. Future OutlookThe next phase of venture capital is likely to be marked by a measured optimism. Expectations for 2025 include a continued resurgence in AI and healthcare, a rebound in cleantech, renewed strength in global IPO and M&amp;A markets, and expanding participation from new geographies and types of investors. Diversification, discipline, and technological leverage will likely define the funds and founders who thrive in this environment. Venture capital in 2025 stands at a crossroads: balancing the promise of new technologies and markets with the realities of economic discipline and global complexity. For stakeholders—whether investors, founders, or policy makers—the key to success will be adaptability, strategic foresight, and a commitment to driving value amid ongoing change.---Newnex — Empowering Institutional Investors to Connect, Syndicate, and Co-Invest Directly - Join Newnex www.newnex.io

Venture Capital Trends in 2025: Navigating Transformation in a Dynamic Landscape

SoftBank Group has kicked off fiscal 2025 with a dramatic upswing, posting a robust net profit of 421.8 billion yen ($2.87 billion) in the first quarter. This surge underscores a remarkable financial turnaround for the Japanese conglomerate, propelled by a bold investment strategy centered on artificial intelligence. AI Investment Surge Powers ResultsAt the heart of SoftBank’s resurgence is a sweeping commitment to artificial intelligence. The group is at the helm of a record-breaking $40 billion funding round for OpenAI, the creator of ChatGPT, pledging $22.5 billion by year’s end. This alone marks one of the largest private technology investments ever, inflating OpenAI’s valuation to $300 billion, with insiders suggesting it could climb as high as $500 billion.Masayoshi Son, SoftBank’s visionary founder, is doubling down on AI infrastructure with initiatives like the $500 billion Stargate project. This ambitious effort aims to construct sprawling data centers across the U.S., positioning SoftBank as the industry’s organizer and a central force in the global AI ecosystem. Strong Performance Across SegmentsSoftBank’s return to profitability is not solely due to new bets; it has also seen strong gains from its stakes in market leaders such as Nvidia and other AI-related ventures. The once-troubled Vision Funds, which had reported cumulative investment losses of $475 million as recently as March, are now showing clear signs of recovery.The company has also taken strategic steps to fuel its investment engine, raising $4.8 billion in July through partial divestment of its T-Mobile stake. According to analysts, SoftBank is well-positioned to leverage asset-backed financings—potentially using equity in other holdings—to secure further capital for its expansion if needed. Cautious Optimism Amid a Volatile MarketDespite its recent success, SoftBank’s journey remains fraught with risk. Its exposure to numerous privately held, and often volatile, tech ventures means profits may continue to fluctuate wildly. The tremendous growth in the AI sector has stoked fears of overheated valuations, yet market sentiment remains largely positive: 13 out of 18 analysts rate the stock a “buy” or “strong buy,” according to LSEG.This quarter’s results mark a pivotal shift from a year ago, with SoftBank notching its second straight quarterly profit—and recently, its first annual profit in four years—thanks to resilient telecommunications income and rising startup valuations. SoftBank’s aggressive bets on AI are paying rich dividends, helping to restore its reputation as a pioneering, risk-embracing investor. Yet, as the global tech landscape races forward, investors and observers alike will be watching to see whether the group’s far-reaching vision translates into enduring, sustainable growth.

SoftBank’s Soaring Q1 2025: AI Bets Pay Off as Profit Surges

Hamilton Lane, a leading global private markets investment firm, has announced the launch of the Hamilton Lane Venture Capital and Growth Fund (HLVCG), a new evergreen investment vehicle registered under the Investment Company Act of 1940. The fund targets accredited U.S. investors, including high-net-worth (HNW) individuals, their wealth advisors, and institutional investors, offering access to private venture capital and growth equity investments focused on disruptive technologies and innovative companies. The HLVCG fund is part of Hamilton Lane’s expanding evergreen platform, which now manages over $10 billion in assets under management (AUM). With $117.8 billion in total AUM and more than 260 relationships spanning over 370 investments in the venture and growth equity space, Hamilton Lane leverages its extensive experience to provide investors with institutional-quality opportunities. The fund emphasizes early capital deployment, flexible liquidity options, and portfolio diversification across vintage year, transaction type, manager, strategy, and geography. “This launch marks a significant step in democratizing access to private markets,” said Steve Brennan, Head of Private Wealth Solutions at Hamilton Lane. “The HLVCG fund allows accredited investors to tap into high-growth sectors like AI and disruptive technologies, which are increasingly shaping the global economy.” The fund’s focus on venture capital and growth equity aligns with Hamilton Lane’s view that these areas, particularly AI-driven innovations, will drive significant value creation in the private markets over the next four to five years. The HLVCG fund builds on Hamilton Lane’s broader evergreen strategy, which includes funds like the Global Private Assets Fund, Private Assets Fund, Senior Credit Opportunities Fund, and recently launched infrastructure and secondary funds. The platform, initiated in 2019, has grown to serve hundreds of investors globally, with a net asset value of approximately $8.1 billion as of August 31, 2024. Market analysts see the launch as a strategic move to capture the growing interest in private markets among retail and HNW investors. Hamilton Lane’s emphasis on innovative investment structures and technology aligns with industry trends, particularly as fundraising faces challenges and competition intensifies. The firm notes that a rebound in exit activity will be critical for sustained fundraising momentum, with the U.S. market expected to remain attractive due to favorable macroeconomic conditions. The HLVCG fund’s minimum investment thresholds and flexible redemption options make it accessible to a broader investor base, though specific details on minimums were not disclosed in the announcement. The launch follows Hamilton Lane’s recent successes, including the $615 million close of its Venture Access Fund in February 2025 and the introduction of infrastructure and secondary evergreen funds earlier this year. As private markets reach an inflection point, Hamilton Lane’s focus on venture capital, growth equity, and innovative structures positions it to meet the evolving demands of investors. The HLVCG fund is poised to capitalize on long-term growth trends, offering a compelling opportunity for those seeking exposure to the dynamic U.S. venture capital landscape. Disclaimer: The views expressed in this article are based on publicly available information and do not constitute investment advice. ----Join Nenwnex — the trusted and verified network for VCs, LPs, and venture-scale startups. Connect, collaborate, and drive reference-based private deal-making and strategic networking. Register on <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

Hamilton Lane Launches U.S. Venture Capital and Growth Evergreen Fund

Three decades ago, Venture Capital Trusts (VCTs) were launched with a clear mission: to fuel innovation and entrepreneurship across the UK by connecting private investors with early-stage, high-growth companies. As VCTs celebrate their 30th anniversary in 2025, let’s look at how they’ve changed, the numbers behind their impact, and what the future holds. The Origins and Purpose of VCTsVCTs were introduced to Parliament in 1994 by then-Chancellor Kenneth Clarke. The goal was twofold: to help build a thriving venture capital industry in the UK and to support innovation by making it easier for small, ambitious businesses to access funding. The government offered generous tax incentives—upfront income tax relief of 30% and tax-free dividends—to encourage individuals to invest in these higher-risk ventures. How VCTs Have Grown and ChangedFrom a handful of funds in the mid-1990s, the VCT market has expanded dramatically. Today, there are over 45 active VCTs managing more than £6.3 billion in assets, supporting around 1,600 startups and scale-ups across the country. These companies now employ over 100,000 people, demonstrating the scheme’s significant contribution to job creation and economic growth. VCTs have backed businesses that have become household names, including Zoopla, Graze, and Quantexa. For example, Quantexa—a company using AI to help banks detect financial crime—grew from a small startup in 2017 to a business valued at over £2 billion in 2025, with more than 600 employees. The focus of VCT investment has shifted over the years. While the original aim was broad, today’s VCTs increasingly target technology, healthcare, fintech, and other innovative sectors. This shift mirrors the UK’s emergence as a global leader in these industries. Tax Incentives and Investor AppealVCTs remain attractive to investors, especially those seeking tax-efficient income and diversification. The key benefits include:<ul><li>30% upfront income tax relief on investments up to £200,000 per tax year (if shares are held for at least five years)</li><li>Tax-free dividends</li><li>No capital gains tax on profits from selling VCT shares</li></ul> These incentives, combined with the squeeze on pension allowances and higher dividend taxes, have kept demand high. In 2023/24, VCTs raised £882 million—the third-highest annual fundraising on record. VCTs have weathered economic uncertainty, regulatory changes, and shifting investor expectations. The government’s decision to extend VCT tax reliefs until at least 2035 provides much-needed stability and signals ongoing support for the sector. Looking forward, VCTs are expected to play an even bigger role in supporting the UK’s innovation economy. The focus on funding early-stage tech, health, and climate companies is likely to intensify, especially as the government invests more in research and development and seeks to drive economic growth through entrepreneurship. If you’re considering VCTs, here’s how to get started:<ul><li>Assess your risk tolerance: VCTs invest in early-stage businesses, which can be volatile and carry higher risks.</li><li>Think long-term: To benefit from tax relief, you’ll need to hold VCT shares for at least five years.</li><li>Diversify: Consider spreading your investment across several VCTs to reduce risk and access a broader range of companies.</li><li>Consult a financial adviser: VCTs can be a powerful tool for tax planning and retirement income, but professional advice is key to making the most of them.</li></ul> VCTs have come a long way in 30 years, evolving into a vital part of the UK’s investment landscape. They offer investors a unique way to support the country’s most exciting startups while enjoying significant tax benefits. As the UK continues to champion innovation, VCTs are set to remain at the heart of the nation’s growth story for years to come.

Venture Capital Trusts' turns 30: How VCTs Have Evolved and What’s Next

Michael Novogratz’s Galaxy Ventures Fund I LP is making headlines for beating expectations in a tough market. The fund, which zeroes in on early-stage crypto and blockchain startups—especially those working on payments and stablecoins—is now on track to close with between $175 million and $180 million by the end of June, well above its original $150 million target. The plan is to use this capital to back a portfolio of about 30 startups, offering a much-needed boost to the sector during a period when venture capital for crypto has been hard to come by. Why This Fundraise Stands OutLet’s put the numbers in perspective. The initial close for Galaxy Ventures Fund I was $113 million in June 2024. Since then, the fund has attracted more interest from family offices, high-net-worth individuals, and even Galaxy itself. The fund’s portfolio already includes names like Ethena (synthetic dollars), M^Zero (stablecoin DeFi protocol), Monad (layer-1 blockchain), Plume (tokenized asset chain), and Renzo (Ethereum restaking via EigenLayer). This fundraising success is especially notable because the broader crypto venture capital scene is still recovering from a major pullback. In 2024, VCs invested $11.5 billion in crypto and blockchain startups across 2,153 deals—a slight uptick from $10 billion in 2023, but still far below the $30 billion peak of 2022. In the U.S., crypto VC funding dropped 22% in Q1 2025 to about $1.3 billion, as investors shifted their focus toward artificial intelligence, which absorbed 58% of global VC dollars during the same period. What’s Driving the Shift?Several big trends are shaping the current landscape:<ul><li>AI is dominating VC funding: In Q1 2025, AI startups captured nearly 58% of global venture capital dollars, compared to just 28% a year earlier. In North America, that figure jumps to 70%.</li><li>Crypto VC is rebounding, but unevenly: Global crypto VC funding hit $4.8 billion in Q1 2025—the highest since Q3 2022—but nearly half of that came from a single $2 billion investment in Binance by Abu Dhabi’s MGX, suggesting much of the capital is concentrated in fewer, larger deals.</li><li>Investors are more selective: The days of funding projects based on a white paper alone are over. Founders now need real traction, and deal sizes have shrunk nearly 90% since 2018.</li></ul> Novogratz’s Take on the MarketMike Novogratz remains optimistic about crypto’s long-term potential. He recently described Bitcoin as a “report card on financial stewardship,” suggesting that in times of uncertainty, it acts both as a safe haven and as a long-term bet on a new financial system. However, he also points out that crypto adoption needs a period of calm to truly thrive—adoption doesn’t flourish in chaos, and new buyers tend to retreat during turbulent times. If you’re an entrepreneur or investor in the crypto space, here are a few things to keep in mind:<ul><li>Focus on real-world utility: Projects that make payments cheaper, expand access to financial markets, or build new blockchain infrastructure are more likely to attract funding.</li><li>Be prepared for scrutiny: Investors want to see traction, not just ideas. Demonstrate real progress and utility.</li><li>Watch the AI trend: With so much capital flowing into AI, consider how your project might intersect with or benefit from AI advancements.</li></ul> Imagine you’re building a startup like Ethena, which issues synthetic dollars, or Monad, a new layer-1 blockchain. Galaxy Ventures’ backing provides not just capital, but also access to a network of experts, hands-on product feedback, and brand-building support. This kind of partnership can make a big difference in a competitive and selective funding environment. In short, Galaxy Ventures Fund I’s fundraising success is a bright spot in a cautious market. It signals that while crypto VC isn’t back to its 2022 highs, there’s still strong conviction—and opportunity—for teams building the next wave of blockchain innovation. --Join Newnex – The VC Institutional Network &amp; Co-Investment Platform Connect with authenticated venture capital and LP investors, syndicate deals, and directly and privately co-invest and syndicate via Newnex, the trusted platform for institutional investors.Free Sign-UpVerified Access OnlyStreamlined Syndication &amp; Deal Discovery Start building strategic VC partnerships today at <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank">www.newnex.io</a> – Sign up free and get authenticated.

 Galaxy Ventures Fund I LP Surpasses $150M Goal Amid Crypto VC Slowdown

Larry Fink, CEO of BlackRock, has issued a sobering warning about the state of the U.S. economy, suggesting that the country is "very close, if not already in, a recession." His comments come at a time when financial markets are grappling with heightened volatility, and economic indicators are flashing warning signs that have left investors nervous about the future. The Impact of Tariffs on the Economy Fink has attributed much of the economic upheaval to the sweeping tariffs implemented by former President Donald Trump. These policies, which targeted not only geopolitical rivals like China but also long-standing allies, have disrupted global supply chains and contributed to rising costs across several industries. For example, the construction sector has been hit hard, with reports suggesting that the average cost of building a new home could increase by as much as 26% due to tariff-related expenses. These inflationary pressures are further straining already-tight household budgets and heightening the Federal Reserve's policy challenges. As inflation remains elevated, hopes for aggressive interest rate cuts to stimulate economic growth are fading. Market Sentiment: A Wave of Caution The stock market has not been immune to the effects of growing uncertainty. The S&amp;P 500 recently experienced its steepest two-day drop since the COVID-19 crash in March 2020. On top of that, consumer sentiment has plummeted, with April 2025 recording an 11% drop — marking the second-lowest level since 1952.&nbsp; Investor behavior reflects this unease, with BlackRock reporting an all-time high of $950 billion in cash accounts. While the firm saw strong inflows of $84 billion in the first quarter of the year, this cautious approach signals that many investors prefer to hold onto cash during turbulent times rather than risk losses in equity markets. Long-Term Investment Opportunities Amid Uncertainty While the short-term outlook may be gloomy, Fink believes that the market downturn presents an opportunity for patient investors. He explained that the turbulence might be "more of a buying opportunity than a selling opportunity" over the long term. Even as he warned that stocks could see further declines of up to 20%, Fink emphasized the importance of focusing on "megatrends" like artificial intelligence and infrastructure development. AI-related investments, particularly in building the infrastructure required for this transformative technology, continue to offer compelling growth potential. These sectors could serve as refuges for investors seeking to capitalize on long-term economic shifts, even as broader market conditions remain challenging. Navigating the Recession Landscape Larry Fink's warnings underscore the complexity of the current economic environment. With rising inflation, tariffs, and recession fears converging, investors are adopting a cautious approach to protect their portfolios. However, Fink's emphasis on long-term opportunities in key sectors serves as a reminder that periods of uncertainty often give rise to future growth. As the world's largest asset manager, BlackRock's insights are a bellwether for global financial sentiment, and Fink's observations should not be taken lightly. For those willing to weather the storm, this might be a moment to look beyond market volatility and focus on investments aligned with transformative economic trends. --Join Newnex – The VC Institutional Network &amp; Co-Investment Platform Connect with authenticated venture capital and LP investors, syndicate deals, and directly and privately co-invest and syndicate via Newnex, the trusted platform for institutional investors.Free Sign-UpVerified Access OnlyStreamlined Syndication &amp; Deal Discovery Start building strategic VC partnerships today at <a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a> – Sign up free and get authenticated.

BlackRock's Larry Fink Warns of Recession: Market Sentiment and Investment Outlook

Bessemer Boosts India Focus with $350 Million AI and Startup Fund

Indonesia has officially launched Danantara, a new multi-billion-dollar sovereign wealth fund aimed at managing state assets valued at over $900 billion. Modeled after Singapore's highly successful Temasek, Danantara is designed to consolidate Indonesia's state-owned enterprises (SOEs) and channel investments into key sectors to boost economic growth. This ambitious initiative is part of President Prabowo Subianto's vision to achieve an annual economic growth rate of 8%, a target that has not been met since the 1990s. By leveraging state assets and attracting foreign investment, Danantara seeks to transform Indonesia's economic landscape. Goals and Objectives of Danantara Danantara's primary mission is to accelerate Indonesia's economic development by investing in high-impact projects across diverse industries. The fund will focus on sectors such as: - Renewable energy: Supporting Indonesia's transition to sustainable energy sources.- Advanced manufacturing: Enhancing industrial capabilities and technological innovation.- Downstream industries: Adding value to raw materials and boosting exports.- Food production: Strengthening food security and agricultural productivity.- Artificial intelligence: Investing in cutting-edge technology to drive innovation. President Prabowo has emphasized that Danantara will not only serve as a financial powerhouse but also act as a development tool to promote sustainable and inclusive growth. By investing in these priority areas, the government aims to create jobs, improve infrastructure, and position Indonesia as a leader in global sustainability and technology trends. Funding and Management of Danantara Danantara will kick off with an initial investment of $20 billion in 2025, sourced from state assets, government-owned shares, and budgetary reallocations. Over time, the fund aims to manage more than $900 billion in assets, which would make it one of the world's largest sovereign wealth funds, rivaling established players like Singapore's GIC. However, some experts have raised doubts about the feasibility of reaching this valuation, given that Indonesia's state-owned enterprises were valued at $637.5 billion in 2023. The fund will report directly to President Prabowo and be overseen by a supervisory board. Muliaman Hadad, a former deputy governor of Bank Indonesia, has been appointed to lead Danantara. The government is expected to finalize the regulatory framework for the fund in the coming months to ensure transparency and accountability. Potential Impact on Indonesia's Economy If successful, Danantara could have a transformative impact on Indonesia's economy. By investing in critical sectors, the fund aims to: - Drive economic growth: Support President Prabowo's ambitious 8% annual growth target.- Create jobs: Generate employment opportunities through infrastructure and industrial projects.- Attract foreign investment: Enhance Indonesia's appeal to global investors by showcasing strategic investment opportunities.- Improve efficiency: Consolidate state assets under one entity to improve the management and performance of SOEs. Danantara's focus on renewable energy and advanced manufacturing aligns with global trends, potentially positioning Indonesia as a leader in sustainability and technology. Additionally, the fund's investments could help address long-standing challenges such as infrastructure deficits and reliance on raw material exports. Challenges and Criticisms Facing Danantara Despite the optimism surrounding Danantara, the fund faces several challenges and criticisms: - Asset valuation concerns: Critics have questioned whether Indonesia's state-owned enterprises can realistically reach the $900 billion valuation target, given their 2023 valuation of $637.5 billion.- Political interference: Since Danantara will report directly to the president, there are concerns that the fund could become a tool for political patronage rather than a genuine driver of economic growth.- Public backlash: The government's decision to reallocate $20 billion from the national budget to fund Danantara has sparked protests, particularly among students, who argue that the funds should be used for education and social services.- Transparency and governance: Ensuring transparent management and avoiding mismanagement will be critical to the fund's success. These challenges highlight the need for robust oversight, clear regulations, and public engagement to build trust in Danantara's mission. Can Danantara Transform Indonesia's Economy? Indonesia's launch of Danantara marks a bold step toward transforming its economy and achieving President Prabowo's vision of 8% annual growth. By consolidating state assets and investing in key sectors, Danantara has the potential to drive innovation, create jobs, and attract foreign investment. However, its success will depend on addressing concerns about asset valuation, political interference, and transparency. If Danantara can navigate these challenges, it could play a pivotal role in elevating Indonesia's global economic standing and delivering sustainable growth for its citizens.--Join the Future of Venture Capital Investing with NewnexNewnex is the platform focused on institutional investors where verified startups, VCs, and LPs converge for private fundraising and investment through trusted references. Centralize your fundraising and investment activities and access the global VC network with just a few clicks. Join for free at <a href="http://www.newnex.io/" rel="noopener noreferrer" target="_blank">www.newnex.io</a>&nbsp; We are digitalizing institutional investing to make VC as accessible as public markets while retaining the uniqueness of private markets. The mission is to unify 5,000+ VC/LP firms with 100,000 startups on a trusted platform for reference-only private deal-making.