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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

The South Korean government, led by the Ministry of SMEs and Startups (MSS), has introduced a comprehensive 2026 venture investment reform aimed at transforming the nation’s startup ecosystem from policy-led capital into a private-sector driven investment engine as part of its “Four Venture Powerhouses” strategy - an ambitious agenda to position Korea among the top four global venture economies by strengthening capital flow, regulatory flexibility and investor incentives. Under the reform, mandatory investment obligations for venture firms have been eased extending fulfilment periods from three to five years and removing strict annual deployment requirements while archaic divestment limits for portfolio firms acquired by conglomerates have been abolished to improve liquidity conditions for investors. Corporate Venture Capital (CVC) entities now get a nine-month grace period to exit when portfolio firms are reclassified within the same corporate group, and administrative sanction transfer windows in mergers and acquisitions have been capped at two years, reducing operational risks for future investors. Regulatory shifts also expand the permissible scope of venture investments to include unlisted equity and fractional investment trading platforms, broadening backing for fintech innovation, and remove restrictive general partner (GP) investment quotas in venture associations in favour of overall fund-level requirements granting fund managers more strategic flexibility. To attract global capital, non-Korean investors are now permitted to contribute directly using US dollars without currency conversion delays.The reform reduces thresholds for private fund-of-fund formations and boosts accelerator-led investment eligibility, enabling early-stage firms even without prior funding to access capital, and raises corporate contribution caps for regional startup funds- key to nurturing ecosystems outside metropolitan hubs. Tax incentives have also been amplified: additional corporate tax deductions for contributions to private venture funds have increased and special purpose company (SPC) investments now qualify for the same tax advantages as direct funding efforts designed to mobilise broader institutional participation. The scope of eligible statutory funds under the National Finance Act has expanded to include pension and public funds, and the Fund of Funds (Mother Fund) will be able to extend its lifespan in 10-year increments beyond 2035, securing long-term strategic investment continuity especially in priority sectors such as AI, deep tech and export-oriented innovation. #KoreaVentureReform #PrivateCapital #StartupPolicy #InnovationEconomy #FourVenturePowerhouses #VentureInvestment #RegulatoryReform #TechStartups #InvestmentEcosystem #GlobalVC #KoreanStartups #DeepTech #AIStartups #FinTech #EconomicGrowth

South Korea Unveils 2026 Venture Investment Reform to Unlock Private Capital and Fuel Growth

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

Enterprise AI adoption is scaling fast and embedding into day-to-day work. Over the past year, weekly ChatGPT Enterprise messages grew about 8x, with average workers sending 30% more messages, and seats increased ~9x year-over-year. Custom GPTs and Projects have become core workflow tools: weekly users rose 19x year-to-date and about 20% of all Enterprise messages now flow through these tailored assistants and projects. Developer/API adoption is also surging: more than 9,000 organizations have processed over 10 billion tokens, nearly 200 surpassed 1 trillion, and average reasoning token consumption per organization rose ~320x in 12 months - evidence that higher-intelligence models are being integrated into products and services. In the last six weeks, Codex usage shows deeper software development integration, with weekly active users up 2x and weekly messages up ~50%. Workers report clear, measurable gains. Seventy-five percent say AI improves speed or quality; typical users save 40–60 minutes per active day, and data science, engineering, and communications save 60–80 minutes. Function-specific improvements are broad: IT issue resolution is faster (87%), marketing/product campaigns execute faster (85%), HR engagement improves (75%), and engineers deliver code faster (73%). AI is also expanding who does technical work: 75% of workers say they can now perform new tasks (coding, spreadsheet automation, tool troubleshooting, agent/GPT design), and coding-related messages outside engineering/IT/research rose 36% over six months. Impact scales with intensity of use—workers who save &gt;10 hours/week consume far more “intelligence” (credits) and use more models/tools across more task types. Adoption is broad-based across industries and geographies, with uneven depth. The median sector grew &gt;6x year-over-year; technology led with ~11x growth, while healthcare and manufacturing are among the fastest risers from a smaller base. Professional services, finance, and technology currently have the largest absolute ChatGPT Enterprise footprints. API usage is diversifying beyond tech: customer service and content generation now make up ~20% of activity, and non-tech firm API use grew 5x. International growth is accelerating: Australia (+187%), Brazil (+161%), the Netherlands (+153%), and France (+146%) grew faster than the global average; the U.S., Germany, and Japan remain among the most active by message volume, and Japan is the largest corporate API market outside the U.S. A widening performance gap is emerging. Frontier workers (95th percentile) send 6x more messages than median workers and use advanced tools much more intensively (e.g., 16x in data analysis among analytics workers; coding sees a 17x message gap). Using AI across more distinct task types correlates with dramatically higher time savings. At the firm level, frontier enterprises generate ~2x more messages per seat and ~7x more messages to GPTs than the median, indicating deeper workflow standardization and organizational integration. Even among monthly active ChatGPT Enterprise users, a meaningful share has never touched some of the most capable tools (19% haven’t used data analysis; 14% haven’t used reasoning; 12% haven’t used search), underscoring headroom. Case evidence points to business outcomes beyond productivity. Intercom used OpenAI’s Realtime API to cut latency by 48% for voice agents and now resolves about 53% of calls end-to-end; escalated calls complete 40% faster, translating to significant support cost avoidance. Lowe’s Mylow and Mylow Companion now answer nearly 1 million questions/month, more than doubling online conversion rates and lifting in-aisle customer satisfaction by 200 basis points. Indeed’s AI matching plus GPT explanations increased started applications by 20% and downstream interviews/hiring by 13%; Career Scout helped job seekers apply 7x faster and be 38% more likely to be hired (84% rating it valuable). BBVA’s legal chatbot automates ~9,000 queries annually, redeploys ~3 FTEs, and delivers 26% of its Legal Services savings KPI. Oscar Health’s integrated member chatbots instantly answer 58% of benefits questions and handle 39% of benefits messages without human escalation. Moderna compressed a core analytical step in Target Product Profile drafting from weeks to hours, accelerating cross-functional alignment and decision quality. OpenAI’s synthesis highlights patterns among leading firms: deep system integration (secure connectors into core tools), workflow standardization and reuse (Custom GPTs, API-powered assistants), executive sponsorship, data readiness and continuous evaluations, and deliberate change management via centralized governance plus embedded champions. The report’s conclusion is clear: depth of usage-especially of advanced capabilities like reasoning, data analysis, Custom GPTs/Projects, and APIs—drives larger productivity gains, broader task coverage, and increasing revenue/customer experience impacts as AI shifts from ad-hoc assistance to core infrastructure. Strengths<ul><li>Scale and diversity: The analysis draws on aggregated usage from over 1 million business customers, plus a survey of ~9,000 workers across ~100 enterprises, offering a broad, real-world view of adoption patterns and impact.</li><li>Mixed evidence types: Combining telemetry (messages, tokens, tool usage) with worker-reported outcomes and concrete case studies yields a rounded picture of how AI is embedded and where value shows up.</li><li>Clear adoption dynamics: The report identifies the deepening of workflow integration (Custom GPTs/Projects), the rise of higher-intelligence usage (reasoning tokens up ~320x), and the uneven intensity between frontier and median users/firms—all actionable for operators.</li></ul> Limitations<ul><li>Vendor-centric lens: Findings reflect OpenAI customers and products; cross-model or cross-vendor comparisons aren’t presented, which may overstate generalizability or omit alternative adoption routes.</li><li>Self-reported productivity: Time-savings estimates come from surveys; while directionally useful, they may be subject to recall or optimism bias and don’t uniformly translate to realized business value without rigorous measurement.</li><li>Early-stage causality: Many business outcomes are correlational and case-study based; broader, longitudinal controls would clarify causation and durability across contexts.</li><li>Coverage gaps: High-level sector/geography figures mask intra-sector variance, regulatory constraints (e.g., healthcare/finance data governance), and organization-specific readiness factors that influence pace and realized ROI.</li></ul> The report credibly shows enterprise AI crossing from experimentation to scaled, embedded workflows with measurable productivity and customer-impact gains, while revealing a significant maturity gap. The most substantial benefits accrue to organizations and workers that standardize workflows, integrate secure data access, and lean into advanced capabilities (reasoning, analysis, custom assistants, API). The primary constraint is shifting from model/tooling maturity to organizational readiness—systems, skills, governance, and change management. <a href="https://cdn.openai.com/pdf/7ef17d82-96bf-4dd1-9df2-228f7f377a29/the-state-of-enterprise-ai_2025-report.pdf" rel="noopener noreferrer" target="_blank">Read the full report here</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> #OpenAI #artificialintelligence #AI

Highlights of the "State of Enterprise AI Report from OpenAI" 

The British Business Bank’s UK Venture Capital Financial Returns 2025 report shows a steadying UK VC market with modest improvements in valuations and broadly competitive performance versus the US and Rest of Europe. Recent fund performance (2020–2023)<ul><li>UK VC funds launched since 2020 posted a pooled TVPI of 1.22, ahead of the US at 1.14. This suggests greater resilience in recent UK vintages during a challenging exit environment.</li></ul> Longer-term performance (2002–2020)<ul><li>UK funds recorded a pooled TVPI of 1.84, slightly behind the US (1.95) and broadly in line with the Rest of Europe (1.85). Realised returns (DPI) for the UK were 0.69, below the US (0.99) and comparable to Europe (0.70), with the caveat that UK funds are younger on average, giving them less time to exit and distribute capital.</li></ul> Stabilisation over the past year<ul><li>Among 149 UK funds reporting in both 2024 and 2025, pooled TVPI held at 1.51 versus 1.52 last year, indicating stabilisation after prior write‑downs. Company‑level median deal valuations rose 5% year‑on‑year to Q1 2025, pointing to firmer pricing and competition returning.</li></ul> Distribution of fund outcomes<ul><li>52% of UK funds have TVPI between 1 and 2, similar to the US (48%) and Rest of Europe (51%). At the top end, 8% of UK funds reached TVPI ≥3 versus 13% in the US and 14% in Europe, indicating fewer outliers at very high multiples in the UK.</li></ul> Comparisons across private markets<ul><li>Across 2002–2020 vintages, UK Private Equity and VC had the highest median TVPIs at 1.74 and 1.48 respectively, ahead of infrastructure (1.30), private debt (1.24) and real estate (1.21). VC showed greater dispersion, with an upper quartile TVPI of 2.15, the highest among asset classes, reflecting higher risk and upside.</li></ul> Exits and sentiment<ul><li>Exit conditions remain difficult, but 68% of UK GPs expect improvement over the next year. 79% rate UK investment opportunity quality as good or very good, a meaningful uptick from last year.</li></ul> Sector appetite<ul><li>Fund managers see the strongest interest in digital and technologies (85%), followed by financial services (64%) and life sciences (47%), consistent with the UK’s Industrial Strategy focus areas.</li></ul> Enterprise Capital Funds (ECF) programme<ul><li>ECF-backed funds outperformed the UK market on realised returns across 2006–2023 vintages, with pooled DPI at 0.62 versus 0.48 for the wider market. Upper quartile DPI was 1.15 compared to 0.80, indicating stronger top‑quartile distributions. For venture and growth funds in 2018–2023, pooled DPI was 0.09, broadly in line with the wider market at 0.08.</li></ul> UK VC has stabilised with improving valuations and competitive recent‑vintage performance versus the US. While long‑term realised returns still trail the US, they are comparable to the Rest of Europe and may benefit as funds mature and exits resume. Dispersion remains high in VC, so manager selection and vintage timing are important. Sector momentum is strongest in digital/tech, with supportive sentiment from UK GPs despite a still‑challenging exit backdrop. Read the full report here: <a href="https://www.british-business-bank.co.uk/about/research-and-publications/uk-venture-capital-financial-returns-2025" rel="noopener noreferrer" target="_blank">https://www.british-business-bank.co.uk/about/research-and-publications/uk-venture-capital-financial-returns-2025</a>-----Newnex is a verified institutional VC network enabling direct syndication and co-investment with other VCs - no intermediaries and no SPVs involved.Sign up free.<a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

UK venture capital: returns stabilise, recent vintages edge the US - British Business Bank

In the shadow of Silicon Valley's AI frenzy, a Milan-based upstart is quietly assembling the internet's greatest hits. Over the past three years, Bending Spoons has deployed nearly $4.5 billion to acquire a constellation of digital icons - from note-taking pioneer Evernote to video-sharing stalwart Vimeo, email behemoth AOL, and now event platform Eventbrite. This isn't a nostalgic collector's spree; it's a calculated industrial operation. Bending Spoons buys underperforming assets with loyal user bases, slashes redundancies, automates with AI, and extracts cash flow at scale. The result? A portfolio generating over $2 billion in annual revenue and $1 billion in EBITDA, all under one roof. Critics call it "private equity on steroids" - ruthless cost-cutting and price hikes that alienate users. Defenders see a revivalist: turning "zombie" brands into profitable engines. Either way, Bending Spoons' playbook is reshaping how we think about legacy tech in an AI-dominated world. Founded in 2013 by a trio of ex-McKinsey consultants with just $40,000 in seed capital, the company bootstrapped to profitability before unleashing this M&amp;A machine. Today, at an $11 billion valuation, it's Italy's first decacorn and Europe's boldest bet on software consolidation. The Playbook: From Distressed Assets to Cash Machines Bending Spoons doesn't chase moonshot startups. It targets "good but broken" companies: established products with sticky audiences but bloated costs, stagnant growth, and distracted owners. The thesis? In 2025, users are the scarcest resource- tech is commoditized by AI. Owning distribution trumps inventing the next big thing. The process is surgical:<ol><li>Buy Low: Target distressed valuations (1-3x revenue) from public markets or motivated sellers. Avoid auctions; strike bilateral deals.</li><li>Strip and Centralize: Migrate to Bending Spoons' Milan-based "universal OS" - a shared platform for engineering, marketing, billing, and support. This eliminates 70-80% of overhead.</li><li>AI Overhaul: Automate support, bug fixes, content moderation, and even pricing with proprietary models (e.g., from photo app Remini).</li><li>Monetize Aggressively: Test dynamic pricing, restrict free tiers, and upsell via A/B experiments. Margins jump from single digits to 40-50%.</li><li>Hold Forever: No flips. Integrate into the group, valued at 10-12x revenue collectively.</li></ol> This "venture equity" model has turned acquisitions into profit centers. Evernote, bought unprofitable in 2023, hit breakeven within 18 months. WeTransfer's revenue grew 25% pre-close, but post-acquisition tweaks promise more. The group's 300 million monthly users and 10 million payers (including Fortune 500 firms) create a flywheel: shared ad buys, cross-promotions, and data synergies. Yet risks loom. Layoffs - often 70-100% of staff - spark backlash. Price hikes (e.g., Evernote's free tier capped at 50 notes) drive churn. Integration glitches could erode trust in brands like AOL's 30 million loyalists. As CEO Luca Ferrari told Bloomberg, "We're not collecting relics; we're building a perpetual machine." The AI Edge: Reviving Legacy in a Generative World Why hoard "old" tools when ChatGPT devours categories? Bending Spoons flips the script: AI supercharges maintenance, not obsolescence.<ul><li>Near-Zero Ops Costs: Internal LLMs handle 80% of support queries, detect bugs, and tag data—slashing headcount from hundreds to dozens.</li><li>Smarter Monetization: AI tests 1,000+ pricing variants weekly, converting free users at 2-3x rates.</li><li>Product Rebirth: Embed AI features (e.g., auto-summaries in Evernote, route predictions in Komoot) to boost engagement without full rewrites.</li></ul> In a post-ChatGPT era, distribution wins. Vimeo's 260 million users? A goldmine for AI-enhanced video tools. Eventbrite's event data? Fuel for personalized recommendations. As Ferrari puts it: "Tech is abundant; audiences are scarce." The Money Trail: Debt-Fueled Roll-Up at ScaleBending Spoons funds via a hybrid war chest: $1.2 billion equity (backers like Baillie Gifford, Fidelity) and $4 billion debt (2025's $2.8 billion round from Goldman Sachs, JPMorgan). Leverage sits at 2.7x EBITDA - prudent for 50% margins. Pre-2024 revenue: $392 million.Post-spree: $1.23 billion (FY2025 est.), with EBITDA at €700 million ($760 million).Projections: €1.4 billion EBITDA by 2026. The math? Buy at 3x revenue, fold into a 10x group multiple - value doubles overnight. This debt appetite echoes Constellation Software but with AI flair. S&amp;P rates it BBB-, citing restructuring costs (€190M in 2025, including €80M for Vimeo). The Full Acquisition Ledger: Assets, Metrics, and TurnaroundsBending Spoons' spree spans 2022-2025, totaling ~$4.5 billion across 15+ deals. Below, a comprehensive table of major acquisitions, with pre-close revenue/EBITDA (where disclosed; many private firms obscure profits). Multiples reflect "distressed" buys. Post-close, most hit 40%+ margins via the playbook. Totals (Major Deals): ~$4,243M deployed; ~$1,727M combined rev; ~$417M EBITDA (pre-restruct). The Consolidated Empire: $11 Billion Valuation, $1B+ EBITDA Post-Eventbrite (pending close), Bending Spoons boasts:<ul><li>Revenue: $1.23B (2025 est.), up 3x from 2023.</li><li>EBITDA: $760M (39% margin), targeting $1.2B pro forma (incl. AOL).</li><li>Users: 400M+ MAU, 10M payers.</li><li>Debt/Equity: $4B debt; leverage 2.7x. Recent: $270M equity (Oct 2025) at $11B pre-money.</li></ul> Ferrari projects €1.4B EBITDA in 2026, sans unannounced pipeline. Analysts eye IPO: "Europe's Constellation Software with AI steroids." Bull vs. Bear: Empire or House of Cards? Bull Case: Bending Spoons becomes the "Berkshire of Bits"—a forever-home for digital relics, compounding at 20%+ via AI efficiencies. Cross-sells (e.g., Eventbrite + Meetup) and new launches atop 400M users unlock $5B+ rev by 2030. Europe's regulatory edge (GDPR data moat) aids global scale. Bear Case: User revolt. Aggressive pricing erodes loyalty—AOL's dial-up nostalgia won't survive spam filters. Non-linear integration risks (Vimeo's €80M costs) balloon. Churn hits 20-30% if features stagnate. Debt at 5.1x (S&amp;P est.) strains in recession.As one X user quipped: "Bending Spoons: Acquire, automate, annoy—repeat." Yet Ferrari counters: "We're stewards, not strippers." Tech's Most Audacious Roll-UpBending Spoons embodies 2025's tech paradox: AI abundance meets user scarcity. While VCs chase unicorns, this Italian operator hoards moats, proving efficiency trumps hype. Risks abound - churn, debt, backlash - but so do upsides: a $20B+ conglomerate owning the internet's plumbing. Watch closely - this is how "may be" new-age European empires forged in code. ----Disclaimer: The article is written based on publicly available information and should not be used as a reliable source. Our information comes from Company filings, Wikipedia, TechCrunch, Bloomberg, WSJ.--- Newnex is the OS for institutional VCs and LPs to co-invest and syndicate without intermediaries: <a href="http://www.newnex.io" rel="noopener noreferrer" target="_blank">www.newnex.io</a>

Bending Spoons’ $4.5 Billion Acquisition Spree: European Tech's Most Audacious Roll-Up

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

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

A Milestone Moment for European Investment <blockquote>In a landmark achievement, European private equity and venture capital reached an all-time high of €1.154 trillion in capital under management in 2023, marking a robust 9% growth from the previous year and more than doubling the levels seen in 2017. </blockquote> This milestone, detailed in Invest Europe’s fifth annual Capital Under Management &amp; Dry Powder 2023 report, released on July 25, 2024, underscores a decade of relentless expansion for Europe’s private capital industry. With 2,996 firms steering this colossal sum, the sector is fueling innovation, competitiveness, and sustainability across the continent. But what’s driving this surge, and why should investors, entrepreneurs, and policymakers take notice? A Powerhouse of Investment: €744 Billion in European BusinessesOf the €1.154 trillion under management, €744 billion is already invested in European companies, directly supporting businesses at their original investment cost. This includes €97 billion in venture capital nurturing dynamic startups and €103 billion in growth capital propelling scale-ups and fast-growing enterprises. Buyout firms lead the charge, managing €443 billion of the portfolio, showcasing their pivotal role in transforming established businesses. This capital infusion is not just numbers on a balance sheet—it’s the lifeblood of Europe’s economy, driving job creation, technological innovation, and sustainable growth. Record-Breaking Dry Powder: €410 Billion Ready to DeployPerhaps the most eye-catching figure is the record €410 billion in dry powder—unallocated capital poised for investment—equating to 86% of the total investments made over the past four years. Buyout firms hold the lion’s share at €284 billion, while venture capital and growth capital firms command €53 billion and €43 billion, respectively. This unprecedented war chest signals immense potential for new investments, offering a lifeline to businesses navigating a complex global landscape marked by economic uncertainty, rising interest rates, and geopolitical challenges.Eric de Montgolfier, CEO of Invest Europe, captured the significance: “Dry powder equals opportunity for businesses and investors, as well as Europe’s economy and society. Europe urgently needs more private capital to fund business transformation and the green and digital transitions.” With this firepower, private equity and venture capital are well-positioned to drive Europe’s ambitions in competitiveness, decarbonization, and digitalization. Regional Giants: UK &amp; Ireland Lead, France &amp; Benelux FollowThe UK &amp; Ireland dominate, managing around 50% of both capital under management and dry powder, reinforcing their role as hubs for domestic and pan-European investments. France &amp; Benelux follow as the second-largest region, overseeing €272 billion in capital and €97 billion in dry powder, while the Nordics manage €125 billion in capital and €58 billion in dry powder. This geographic distribution highlights the widespread strength of Europe’s private capital ecosystem, with multiple regions contributing to its dynamism. Who’s Funding the Future? Pension Funds and Sovereign WealthPension funds are a cornerstone of this growth, accounting for 27% of uncalled commitments, a testament to their confidence in private equity’s long-term value. Funds of funds and other asset managers, often channeling smaller pension funds, contribute 18%, while sovereign wealth funds and family offices each represent 13%. This diverse investor base reflects the industry’s broad appeal and its critical role in securing financial futures for millions of European citizens. A Decade of TransformationThe 2023 figures cap a decade of remarkable growth. Since 2012, capital under management has more than doubled, with 2022 alone seeing the industry break the €1 trillion barrier for the first time at €1.004 trillion. Dry powder has also surged, rising from €285 billion in 2021 to €348 billion in 2022, before hitting €410 billion in 2023. This consistent upward trajectory demonstrates the industry’s resilience amid challenges like inflation, high interest rates, and geopolitical uncertainty.Invest Europe’s report emphasizes the sector’s ability to weather storms. “European private equity and venture capital continues to grow strongly and sustainably,” said de Montgolfier. “Record capital under management illustrates the industry’s scale and contribution at a European level, providing investment and expertise for young companies to develop their ideas and grow, and more mature businesses to consolidate their positions and expand internationally.” Why This Matters: Fueling Europe’s FutureThe implications of this growth are profound. Private equity and venture capital are not just financial mechanisms—they are engines of innovation and economic stability. The €97 billion in venture capital is empowering startups to tackle pressing challenges, from climate tech to healthcare innovation. Meanwhile, the €103 billion in growth capital is helping scale-ups become global leaders, while buyout investments are transforming established firms into more competitive, sustainable entities.Moreover, the record dry powder offers a buffer against economic headwinds. As Europe faces the dual transitions of digitalization and decarbonization, this capital provides the flexibility to invest in transformative technologies and business models. From AI-driven startups to renewable energy ventures, private capital is paving the way for a more innovative and sustainable Europe. Challenges and Opportunities AheadDespite the rosy outlook, challenges loom. A recent post on X highlighted a global private equity bottleneck, with firms holding a record 29,000 unsold companies worth $3.6 trillion, while dealmaking slows. While Europe’s dry powder remains robust, the global slowdown underscores the need for strategic deployment to maintain momentum. Investors must navigate a landscape of high valuations, cautious buyers, and macroeconomic pressures to unlock the full potential of their capital.Yet, the opportunities outweigh the risks. The €410 billion in dry powder positions Europe’s private capital industry to seize emerging opportunities, from backing next-generation tech unicorns to supporting traditional industries in their green transition. As Invest Europe’s report notes, this capital is “well-positioned to fuel positive change that drives European growth and competitiveness.” Europe’s private equity and venture capital sector is a said to be performing strongly. For entrepreneurs, it’s an invitation to tap into a vast pool of capital and expertise to scale their visions. And for policymakers, it’s a reminder to foster an environment that encourages private investment to drive Europe’s economic and societal goals. As Europe stands at a crossroads, the private capital industry’s record-breaking growth in 2023 is a beacon of opportunity. With €1.154 trillion under management and €410 billion ready to deploy, the stage is set for a transformative decade. Will Europe’s private equity and venture capital industry continue to rewrite the rules of global investment? The numbers suggest they’re just getting started. Source: <a href="https://www.investeurope.eu/research/activity-data/capital-under-management-dry-powder/" rel="noopener noreferrer" target="_blank">Invest Europe, “Positioned for the Challenge: Capital Under Management &amp; Dry Powder 2023,” published July 25, 2024.</a>

European Private Equity Soars to Record €1.15 Trillion in 2023: A Decade of Unstoppable Growth

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

Elon Musk’s xAI Holdings is reportedly in discussions to raise approximately $20 billion in funding, a move that could value the company at over $120 billion, according to Bloomberg News. This significant capital raise aims to bolster the newly combined artificial intelligence (AI) startup and social media business, following xAI’s acquisition of the X platform in March 2025. The deal marks one of the largest startup funding rounds in history, trailing only OpenAI’s $40 billion raise earlier this year. A Strategic Merger to Unlock PotentialThe funding talks come on the heels of xAI’s all-stock acquisition of X, formerly Twitter, which valued xAI at $80 billion and X at $33 billion, with a total valuation of $45 billion including $12 billion in debt. Musk has emphasized the intertwined futures of the two entities, stating, “This combination will unlock immense potential by blending xAI’s advanced AI capability and expertise with X’s massive reach.” The merger aims to integrate xAI’s AI innovations, such as the Grok chatbot, with X’s vast user base to deliver smarter, more meaningful user experiences. The proposed $20 billion raise could serve multiple purposes, including alleviating X’s substantial debt burden, which incurs $200 million monthly in servicing fees and over $1.3 billion in annual interest expenses. Additionally, the funds would support xAI’s ambitious projects, such as expanding its Memphis-based supercomputer cluster, Colossus, touted as the world’s largest, and further developing AI models to compete with industry leaders like OpenAI and Anthropic. Musk’s Vision for xAI and XLaunched in July 2023, xAI was founded with the mission to “understand the true nature of the universe” and has since positioned itself as a key player in the AI industry. The company’s chatbot, Grok, introduced in 2024 and upgraded to Grok-3 in February 2025, incorporates features like image editing and a websearch function called DeepSearch. By merging with X, xAI gains access to real-time user data, which could enhance its AI training capabilities and accelerate product deployment to a broader audience. Musk’s strategic consolidation of xAI and X reflects his broader vision of creating a synergistic ecosystem where AI and social media amplify each other’s strengths. This move also aligns with his efforts to establish xAI as a formidable rival to OpenAI, a company he co-founded but left in 2018. Earlier this year, Musk led a consortium offering $97.4 billion to acquire OpenAI, underscoring the intensifying competition in the AI space. Investor Confidence and Market ContextThe funding round is expected to attract participation from Musk’s long-standing backers, including venture firms like Andreessen Horowitz, Sequoia Capital, and Valor Equity Partners, as well as Saudi Arabia’s Kingdom Holding. Saudi investor Prince Alwaleed bin Talal, a significant stakeholder in both xAI and X, noted that the merger could elevate the value of his investments to between $4 billion and $5 billion.The AI sector continues to draw massive investor interest, despite some cooling enthusiasm as startups integrate with tech giants like Google and Amazon. xAI’s ability to secure such a substantial raise would signal sustained confidence in Musk’s vision and the potential of AI-driven innovation. If successful, the $20 billion round would rank as the second-largest startup funding event, highlighting the high stakes and transformative potential of the AI industry. The rapid development of xAI’s projects, particularly the Colossus supercomputer, has sparked concerns among environmental and public health advocates in Memphis. Critics cite a lack of community input and oversight, as well as the environmental impact of the natural gas-powered turbines and planned graywater facility. Additionally, Musk’s involvement in the Trump administration’s Department of Government Efficiency has raised questions about his focus on xAI and other ventures, especially as Tesla’s stock has declined over 40% in 2025. Despite these challenges, xAI’s integration with X and its pursuit of substantial funding underscore Musk’s commitment to advancing AI and redefining social media. The outcome of the $20 billion raise will likely shape the trajectory of xAI Holdings and its role in the global AI landscape.----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>

Elon Musk’s xAI Holdings Seeks $20 Billion at $120 Billion Valuation

The UK government has taken a pioneering step in the global race for clean energy by investing £20 million to launch Starmaker One, the country’s first private fusion investment fund. This initiative is designed to accelerate the commercialisation of fusion energy, a technology that could provide limitless, clean power and transform the UK into a global energy leader. What Makes Starmaaker One Unique?Starmaker One is not just another government grant or R&amp;D program. It’s a one-of-a-kind public-private partnership where the government acts as a cornerstone investor in a limited partnership managed by East X Ventures, the venture capital arm of London-based East X. East X Ventures will manage the fund, making investment decisions and supporting early-stage, science-led fusion companies with high-growth potential.Unlike previous investments that often flowed through the British Business Bank or similar vehicles, this £20 million comes directly from the Department for Energy Security &amp; Net Zero’s (DESNZ) Research and Development budget for 2024/2025. The government’s direct involvement is meant to “de-risk” the sector, giving private investors the confidence to contribute much larger sums—potentially raising the fund’s total to between £100 million and £150 million. Here’s how the partnership is structured:<ul><li>The government provides an upfront investment, acting as a cornerstone investor and sharing both the risks and potential returns with private investors.</li><li>East X Ventures, as the fund manager, is responsible for selecting and supporting fusion start-ups and scale-ups, guiding them from breakthrough science to commercial reality.</li><li>The fund’s structure means the government will receive a share of any profits, aligning public and private interests and ensuring taxpayers benefit if the sector thrives.</li></ul> Historically, UK fusion start-ups have struggled to access the capital needed to scale and commercialise their technologies. By investing directly alongside private venture capital, the government is sending a strong signal of confidence in the sector. This approach is the first of its kind for early-stage fusion investment outside the US and is expected to unlock further private capital, create thousands of high-skilled jobs, and keep the UK at the forefront of fusion innovation. What Will Starmaker One Achieve?<ul><li>Help fusion businesses grow and commercialise at scale, supporting innovation in fields like magnetics, robotics, AI, and advanced materials.</li><li>Train the next generation of scientists, engineers, and technicians, especially in regions like Nottinghamshire, Oxfordshire, and South Yorkshire.</li><li>Strengthen UK supply chains and position the country as a major exporter of fusion technology to a global market expected to be worth trillions in the coming decades.</li></ul> The investment in Starmaker One comes on the heels of a record £410 million government commitment to UK fusion research and international collaboration. With breakthroughs in fusion technology happening rapidly worldwide, the UK is determined to stay ahead by ensuring its companies have the funding and support they need to compete. --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.

UK Government invests £20m in £100m Starmaker One, a private fusion investment 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

Vocap Partners, an Atlanta-based venture capital firm, has raised over $100 million to invest in early-growth B2B software companies, with a focus on often-overlooked metro markets across the Midwest, East, and South. Let’s break down what this means for startups, investors, and the broader tech scene. Why Vocap Partners Stands OutVocap isn’t your typical Silicon Valley VC. The firm intentionally seeks out high-potential companies in regions that don’t always get the spotlight. This approach is especially relevant in today’s uncertain economic climate, where smaller, capital-efficient startups in less saturated markets can offer attractive opportunities for growth and returns. Their investment sweet spot:<ul><li>B2B software and healthcare IT companies with proven product-market fit</li><li>Annual recurring revenue between $2-6 million</li><li>Strong, efficient growth (over 30% year-over-year)</li><li>Reasonable cash burn</li><li>Initial checks of $2-7 million, with reserves for follow-on investments</li><li>Target exit timeframe of 3-7 years</li></ul> Vocap isn’t just about writing checks—they get hands-on. CEOs from portfolio companies like Blue Ridge, Harness, XOi, and ketteQ have praised Vocap for their operational support, from helping set up international subsidiaries to recruiting key executives and refining business strategies. For example, ketteQ, a supply chain planning platform, recently raised $9 million in a Series A round led by Vocap, which will help them expand their AI-driven solutions for global brands. What This Means for FoundersIf you’re building a B2B software company in North America—especially outside the coastal tech hubs—Vocap could be a strong partner. They bring not just capital, but also deep operational expertise and a network that can accelerate your growth. Their team, based in Atlanta and Vero Beach, includes seasoned entrepreneurs and investors who actively engage with founders to solve real business challenges. Actionable Recommendations for Startups<ul><li>Focus on sustainable, efficient growth: Vocap values companies that grow fast but don’t burn cash recklessly.</li><li>Build for real industry problems: Their interest lies in startups applying AI and modern software to tangible business challenges.</li><li>Be open to collaboration: Vocap is known for rolling up their sleeves and working alongside founders—leverage that expertise.</li><li>Consider your geography: If you’re in a non-coastal metro, you may have an edge in attracting their attention.</li></ul> Vocap Partners’ latest fund signals a growing trend: major venture capital is flowing into regions and companies that have historically been overlooked. For founders in these markets, it’s a chance to secure not just funding, but a committed partner for scaling up. --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.

Vocap Partners Surpasses $100 Million Fundraising, Targets B2B Tech in Underserved U.S. Markets

Konvoy’s latest quarterly report projects gaming industry to grow to $186 billion by 2026. The report, released in April 2025, dives into the major investment moves, regional trends, and the growing impact of geopolitical tensions on the sector. Key Mergers, Acquisitions, and InvestmentsIn the first quarter of 2025 alone, the industry saw 43 mergers and acquisitions. Two standout deals were Scopely’s $3.5 billion acquisition of Niantic’s gaming division and Modern Times Group’s $620 million purchase of Plarium. These high-profile transactions signal continued consolidation as companies seek to strengthen their portfolios and expand their global reach. Venture capital activity remained robust, with 77 deals recorded in the quarter. While the number of deals dipped by 6% compared to the previous quarter, total venture funding surged to $373 million—a 35% jump. This suggests investors are focusing on fewer, but larger, opportunities. Regional Investment PatternsNorth America remains the dominant force in gaming investment, capturing 53% of all deals in Q1 2025. Asia followed with 33%, while Europe took third place. Notably, regions like Africa, South America, and Australia saw little to no investment activity. Konvoy’s managing partner, Josh Chapman, attributed this to a lack of local funding groups, despite the presence of gaming companies in those areas. He expects North America, Asia, and Europe to continue leading the way in both investment and deal-making. Geopolitical Tensions Shape the IndustryThe report also highlights the growing impact of U.S.-China tensions on the gaming sector. The U.S. has increased scrutiny of Chinese entities, affecting games like Snap and others. This heightened oversight is significant, given China’s major role in the industry. Chapman explained that the friction is partly due to the need for U.S. games to have a local partner or “gatekeeper” in China, while Chinese games face fewer barriers entering the U.S. market. Recent developments, such as Ubisoft’s acceptance of funding from Chinese tech giant Tencent, underscore the complex interplay between business interests and geopolitical concerns. Konvoy’s report suggests the industry’s growth will continue, driven by strategic investments, major acquisitions, and ongoing innovation. However, the sector must also navigate an increasingly complex global landscape, where regulatory and political issues can have far-reaching effects. For investors and companies alike, understanding these dynamics will be key to capitalizing on the opportunities ahead. Access the report here: <a href="https://www.konvoy.vc/reports/gaming-industry-report-q1-2025" rel="noopener noreferrer" target="_blank">https://www.konvoy.vc/reports/gaming-industry-report-q1-2025</a> --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.

Games Industry Set to Hit $186 Billion by 2026: Konvoy Report Highlights Investment Trends and Geopolitical Tensions

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

India's venture capital (VC) ecosystem is experiencing a notable revival, as outlined in the "India Venture Capital Report 2025" by Bain &amp; Company, 2025, in collaboration with the Indian Private Equity and Venture Capital Association (IVCA). The report, themed "Whispers of Spring: Funding winter thaws as India’s investment landscape shows signs of revival," provides a comprehensive analysis of 2024's performance and projections for 2025. This section delves into the detailed findings, offering insights for investors, entrepreneurs, and policymakers, and includes all key data points and trends identified in the report. Funding and Deal Volume Trends in 2024The report reveals that VC funding in 2024 reached $13.7 billion, marking a 1.4 times increase compared to 2023 levels. This surge reflects growing investor confidence, particularly in tech-first sectors, positioning India as the second largest VC destination in the Asia-Pacific region. Deal volumes also saw a substantial uptick, rising from 880 deals in 2023 to 1,270 in 2024, representing a ~45% increase. This expansion highlights a broadening of investment opportunities across various stages. A breakdown of deal sizes shows a clear trend:- Small- and medium-ticket deals, valued at less than $50 million, comprised approximately 95% of all deals and grew by ~1.4 times, indicating strong early-stage activity.- Large deals, worth $50 million or more, nearly doubled, rebounding to pre-pandemic levels, suggesting renewed interest in scaling businesses.- However, the average size of megadeals ($100 million+) fell by 20%, which may reflect a cautious approach to high-value investments amidst global volatility. The report also notes the emergence of 5 unicorns in 2024, up from 2 in 2023, with examples including Zepto, Meesho, and Lenskart. This increase in unicorns amidst a global funding slowdown is an unexpected detail, highlighting India's unique market dynamics. Sector-Wise Performance and Investor ActivitySectoral analysis reveals that tech-first sectors dominated funding, accounting for over 60% of total investments. Consumer tech emerged as a standout, with funding rising 2.3 times to $5.4 billion, driven by rapid customer adoption and profitability paths, particularly in quick commerce within B2C commerce. Software/SaaS funding also saw significant growth, increasing by ~1.2 times to $1.7 billion, with generative AI experiencing a 1.5 times surge, reflecting the global AI boom's impact on India. Fintech continued to be a key area, though specific figures were not detailed, it is part of the tech-first sectors driving the majority of funding. Additionally, BFSI and consumer/retail sectors saw sharp funding growth due to large markets and socioeconomic tailwinds, further diversifying the investment landscape. Investor participation was robust, with private equity (PE) funds, family offices, and corporate VC firms increasing their deal volumes by ~1.8 times from 2023 to 2024. Notable examples include KKR's investment in Rebel Foods. However, fund-raising activity saw a decline, dropping by ~35% to $2.7 billion, the lowest since 2020. This contraction is attributed to cautious capital deployment amidst global economic uncertainties. Notably, maiden funds comprised nearly one-third of VC/growth capital raised, up from ~25% in 2023, indicating a rise in new fund formations targeting themes like sustainability, agriculture, defense, sports, and gaming. Exit Activity and Market LiquidityExit activity in 2024 edged up to $6.8 billion, with public market exits rising significantly, accounting for approximately 76% of total exit value, up from ~55% in 2023. This shift was fueled by a 7x surge in IPO exit values, driven by rising liquidity, recovery in tech stock valuations, and supportive regulatory reforms. This increase in exit activity is a crucial indicator of market maturity, providing liquidity to early investors and encouraging further investments. Policy Reforms and Their ImpactThe report credits several policy reforms for the positive momentum in the VC ecosystem. Key measures include:- Elimination of angel tax, reducing the tax burden on early-stage investments.- Reduced long-term capital gains (LTCG) tax rates, making exits more attractive.- Removal of the National Company Law Tribunal (NCLT) process, simplifying corporate restructuring.- Simplified foreign venture capital investor (FVCI) registrations, easing foreign investment flows. These reforms have created a conducive environment, boosting investor confidence and aligning with the government's broader economic goals. The report suggests that such policy support will continue to drive growth, particularly in emergent sectors. Looking ahead, the report projects a robust 2025 for India's VC landscape. Investors remain confident, with available capital suggesting potential for increased deal activity. Growth-stage investments are expected to rise, reflecting a maturing ecosystem. Emergent sectors such as semiconductors, energy transition, and deep tech are likely to garner greater interest, driven by global trends and India's strategic focus on these areas. In the longer term, the report envisions sustained growth for India's VC ecosystem, supported by strong consumption tailwinds, regulatory advancements, and a rapidly expanding digital backbone. This outlook is particularly relevant for international investors seeking high-growth markets amidst global economic challenges. Read the full report here: <a href="https://www.bain.com/insights/india-venture-capital-report-2025" rel="noopener noreferrer" target="_blank">https://www.bain.com/insights/india-venture-capital-report-2025/</a> ----Join <a href="https://www.newnex.io/blogs/venture-capital/www.newnex.io" rel="noopener noreferrer" target="_blank">Newnex</a> For Free: The Global Institutional Network for VCs, LPs, and venture-scale startups for secure, reference-driven syndication and co-investments.

India's Venture Capital Landscape Set to Surge: Key Insights from Bain & Company’s 2025 Report

In a surprising yet strategic move, Volkswagen Group, the German automotive giant, has emerged as the sole backer of a new venture capital firm called Leitmotif. According to a recent TechCrunch exclusive published on March 11, 2025, Leitmotif has been operating under the radar for the past 16 months, investing in approximately 20 startups with a sharp focus on decarbonization—a mission that aligns with Volkswagen’s broader sustainability goals. This development offers a glimpse into how major industrial players are leveraging innovation to tackle climate challenges while seeking financial returns. Leitmotif’s first fund, backed by a hefty $300 million commitment from Volkswagen, has already deployed about one-third of its capital. The firm’s investments span a diverse range of sectors, including electric vehicle (EV) companies, battery technology, space-related ventures, and even four nuclear fusion startups. This broad approach reflects an ambitious vision to not only reduce carbon emissions but also pioneer groundbreaking technologies that could reshape industries. Volkswagen’s involvement goes beyond mere funding. During a conference on Tuesday, March 11, CEO Oliver Blume emphasized that Leitmotif’s efforts could help the automaker lower its carbon footprint and foster a “circular economy” both within and outside the company. This partnership hints at a symbiotic relationship: Volkswagen gains access to cutting-edge innovations, while Leitmotif’s portfolio companies benefit from the automaker’s vast resources and industry expertise. Leading Leitmotif are managing partners Matt Trevithick and Jens Wiese, the latter of whom previously headed Volkswagen Group’s M&amp;A, Investment Advisory, and Partnerships division. Their goal is clear: build a bridge between Europe’s industrial giants and the U.S.’s thriving innovation ecosystem. Approximately 70% of the fund’s capital is earmarked for U.S.-based startups, with the remaining 30% targeting the European Union. Offices in Palo Alto and Munich will support this transatlantic strategy. The firm’s investment philosophy is twofold. About 70% of its current fund targets startups addressing “today’s known problems” in established, billion-dollar markets—think practical solutions with ready customers. The remaining 30% is reserved for “revolutionary innovation,” betting on technologies that could create entirely new markets by the 2030s. One example from their portfolio is Harbinger, an EV truck startup where Leitmotif co-led a $100 million Series B round in January. Discussions are reportedly underway for Harbinger to collaborate with Volkswagen’s trucking division, showcasing the potential for direct synergy. What makes Leitmotif’s launch particularly noteworthy is its timing. Late 2023, when the firm began its quiet investment spree, was a challenging period for hardware and deep-tech startups due to high interest rates and a cautious funding environment. Trevithick argues this was an advantage: “It’s in down markets when the strong companies separate from the weak.” With other venture firms retreating to protect existing portfolios, Leitmotif seized the opportunity to back promising, underfunded ventures. Looking ahead, Trevithick and Wiese plan to expand Leitmotif’s reach with additional funds focused on robotics and AI—areas Volkswagen may also opt to invest in. For now, the firm remains independent, focused on finishing its debut fund while proving its model of blending profit with purpose. For entrepreneurs and innovators in the decarbonization space, Leitmotif’s emergence signals a new source of capital with a powerful industrial ally. For the public, it’s a reminder that even traditional giants like Volkswagen are adapting to a greener future, one startup at a time. Keep an eye on this stealthy player—it might just redefine how industry and innovation intersect. ----Join <a href="https://www.newnex.io/blogs/venture-capital/www.newnex.io" rel="noopener noreferrer" target="_blank">Newnex</a> For Free: The Global Institutional Network for VCs, LPs, and venture-scale startups for secure, reference-driven syndication and co-investments.

Volkswagen Fuels a New Venture Capital Firm Focused on Decarbonization

The German government has announced a fresh injection of €200 million (approximately $210 million) into its venture capital ecosystem, reinforcing its commitment to fostering innovation and supporting high-growth startups. Unveiled on March 11, 2025, this funding aims to bolster early-stage companies, particularly in cutting-edge fields like artificial intelligence (AI), climate technology, and digital infrastructure. The move builds on Germany’s ongoing efforts to solidify its position as a leading hub for tech innovation in Europe, amid intensifying global competition. Strengthening the Startup EcosystemThis €200 million allocation will be channeled through the KfW Capital, a subsidiary of the state-owned KfW Bank, which has been instrumental in bridging funding gaps for German startups. The funds are earmarked for co-investment with private venture capital firms, targeting seed and Series A rounds. This follows a €400 million commitment in 2024, bringing the government’s total venture capital support to €600 million over two years. Economy Minister Robert Habeck emphasized the strategic intent: “Germany must lead in transformative technologies. This investment ensures our startups have the capital to innovate and scale, keeping us competitive on the global stage.” The focus on AI, green tech, and digital solutions aligns with Germany’s broader economic goals. The country aims to leverage its industrial prowess—evidenced by a 2% surge in industrial output in January 2025, driven by car manufacturing—to transition into a leader in next-generation technologies. Startups in these sectors are seen as critical to addressing climate challenges, enhancing digital infrastructure, and maintaining economic resilience in a shifting global landscape. Germany’s startup scene has been gaining momentum, with Berlin often dubbed the “Silicon Valley of Europe.” In 2024, German startups raised €6.8 billion, a modest rebound from the €6.2 billion in 2023, despite a global venture capital slowdown. However, early-stage funding remains a bottleneck, with many promising companies struggling to secure initial capital compared to counterparts in the U.S. or UK. The government’s latest move addresses this gap, aiming to reduce reliance on foreign investors and nurture homegrown talent. The timing also reflects economic pressures. While industrial production shows signs of stabilization, exports dropped by 2.5% in January 2025, signaling vulnerabilities in Germany’s trade-dependent economy. By bolstering venture capital, the government hopes to diversify growth drivers, betting on tech innovation to offset traditional sector challenges. This shift mirrors a broader policy evolution, with some analysts noting a departure from fiscal conservatism toward debt-financed growth strategies. A Collaborative ApproachThe €200 million will not be deployed in isolation. KfW Capital will partner with private VC firms, amplifying the funds’ impact through matched investments. This public-private model has proven effective in prior initiatives, such as the Future Fund (Zukunftsfonds), launched in 2021 with €10 billion to support tech scale-ups. The new funding is expected to support 30–40 startups, with individual investments ranging from €5 million to €15 million, depending on co-investment agreements.Climate tech, a priority area, could see significant gains. Germany’s push for carbon neutrality by 2045 relies heavily on scalable solutions like renewable energy storage and carbon capture—areas where startups often lack early funding. Similarly, AI ventures, from autonomous systems to data analytics, are poised to benefit, building on Germany’s strong research base and industrial applications. Despite the optimism, hurdles remain. Germany’s venture ecosystem lags behind the U.S. and China in total investment volume, and bureaucratic red tape continues to deter some entrepreneurs. Critics argue that €200 million, while substantial, is a drop in the bucket compared to the billions poured into American or Chinese startups annually. “It’s a step forward, but we need more ambition to truly compete,” said Anna Berger, a Berlin-based VC analyst. Others question whether the focus on early-stage funding adequately supports later-stage scaling, where German firms often lose ground to international rivals. Regulatory complexity also looms large. Startups face lengthy approval processes for subsidies and tax incentives, potentially slowing deployment of the new funds. The government has pledged to streamline these mechanisms, but results remain to be seen. A European ContextGermany’s investment comes amid a broader European push to bolster tech sovereignty. The EU recently allocated €4.6 billion for clean tech and EV batteries in December 2024, signaling a collective effort to counter Chinese dominance in strategic sectors. Germany’s €200 million complements this, reinforcing its role as Europe’s economic engine. Collaborative efforts with VC firms like Munich-based HV Capital, which expanded to the UK in February 2025, could also deepen cross-border innovation ties. As of March 12, 2025, details on specific recipients and timelines are pending, with KfW Capital expected to begin disbursements by Q3 2025. The government projects that this injection could create 5,000–7,000 high-skilled jobs over five years, alongside fostering 10–15 potential “unicorns” (startups valued at over €1 billion). For now, the €200 million signals Germany’s intent to not just keep pace but lead in the global tech race—a bet on innovation to secure its economic future.----Join <a href="https://www.newnex.io/blogs/venture-capital/www.newnex.io" rel="noopener noreferrer" target="_blank">Newnex</a> For Free: The Global Institutional Network for VCs, LPs, and venture-scale startups for secure, reference-driven syndication and co-investments.