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Canadian Venture Firm Doubles Down on Fintech Despite Slump
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By Marc Vartabedian, WSJ Pro
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Good day. While the global venture-capital slowdown has weighed on the once-hot fintech sector, not all investors have been scared off.
Luge Capital has raised C$71 million, equivalent to about $53 million, in the first close of its second fund, toward an ultimate fund size of C$100 million, or about $74 million. Founded in 2018 and with offices in Montreal and Toronto, Luge is an early-stage venture-capital firm focused on fintech.
Luge Fund II will target fintech startups that operate at the intersection of financial services and other large industries as well as those focused on environmental, social and corporate governance.
“Although fintech investments are down from 2021, the market has normalized to prepandemic levels, and companies are being funded based on their merits, rather than their hype,” said Luge General Partner Karim Gillani. “With this fresh capital, we’re going to stay true to our disciplined strategy and back the most ambitious founders who are modernizing the way the world interacts with financial services.”
The fundraise announcement comes as venture investment into fintech startups has dropped from $54 billion globally for all of 2021 to $16 billion for the first half of this year, according to analytics firm PitchBook Data.
As in other geographies, venture firms in Canada have seen a difficult exit environment. In the first half of this year, exits generated C$279 million, according to the Canadian Venture Capital and Private Equity Association. Canada saw C$5.3 billion in exits during all of 2021.
The fundraise is set to be announced Tuesday at the Canada FinTech Forum 2023 taking place in Montreal through Wednesday. Luge Fund II’s limited partners include Quebec pension fund CDPQ, Canadian financial services firm Desjardins, financial services company Sun Life Financial and venture fund Inovia Discovery Fund I.
Luge invested in 21 companies from the roughly C$85 million raised for Luge Fund I. Notable investments include financial data startup Flinks Technology, which was acquired by National Bank of Canada in 2021. Luge also invested in enterprise payments startup Plooto.
And now on to the news...
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Huawei’s new high-speed smartphones indicate that China can swerve around U.S. efforts to block its access to cutting-edge technology. PHOTO: MARK R CRISTINO/SHUTTERSTOCK
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Huawei’s new gadgets. Huawei, China’s rival to Apple in smartphones and the world’s leading provider of telecoms infrastructure, is out to prove it isn’t just surviving Washington’s campaign to crush it, but is in the vanguard of Beijing’s drive for self-reliance in technology, The Wall Street Journal reports. After the buzz around Huawei’s new high-speed smartphones, which appeared to show that China can swerve around U.S. efforts to block its access to cutting-edge technology, the company on Monday unveiled its latest tablets, smartwatches and earphones—supported by a homegrown challenger to Bluetooth and Wi-Fi, global standards in wireless communication.
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$60 Billion
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The amount that fundraising and investor adviser Campbell Lutyens estimated in July that private funds held for investment into the sustainable agriculture and food sectors.
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Paine Schwartz Banks $1.7 Billion for Food-Chain Deals
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Paine Schwartz Partners has raised its largest fund to date to invest in businesses in the food and agribusiness sectors, WSJ Pro reports. The New York investment manager has collected $1.7 billion for its sixth fund, according to a statement. The firm had set $1.5 billion as the target for Paine Schwartz Food Chain Fund VI, according to the statement. About 40% of the fund’s capital has already been deployed into businesses such as AgroFresh Solutions, a technology provider focused on reducing food waste, and Costa Group, one of Australia’s largest fruit and vegetable growers, Paine Schwartz said.
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Jeff Bezos Picks New CEO for Blue Origin
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Blue Origin, the space company backed by Jeff Bezos, hired a new chief executive as it pushes to start flying to orbit and catch up with SpaceX, WSJ reports. Dave Limp, a longtime executive at Amazon.com, will join Blue Origin as CEO in early December, according to an email Bezos sent to staff Monday. He will take over for the company’s current top leader, Bob Smith, who will leave in early January.
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Blue Origin was founded by Bezos almost 25 years ago, but it has fallen behind Elon Musk’s SpaceX in terms of launching missions into orbit. While the company has created several divisions, it hasn’t yet conducted an orbital mission.
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Funds
London-based Dawn Capital raised $700 million across two new funds. With $620 million, its fifth flagship fund will invest in early-stage business-to-business software startups in Europe, while the $80 million Dawn Opportunities III fund will back portfolio companies from Series C stage onwards.
Pacific Northwest-focused FUSE launched its $250 million sophomore fund to continue investing in companies leveraging software and artificial intelligence to improve business processes. The Bellevue, Wash.-based firm, which was founded in 2020, raised $170 million for its inaugural fund.
Anzu Partners closed its third fund with more than $200 million in commitments. The firm has invested in 12 startups to date through the new fund across sectors including cleantech, industrial and life sciences.
T-Mobile is launching a second corporate venture capital fund. The new vehicle plans to make initial investments in the $2 million to $5 million range for mid-stage portfolio companies, and up to $25 million for later stage investments.
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Curve, a U.K.-based fintech company that connects all credit and debit cards to one single card and app, added £58 million in Series C funding, bringing the round total to over £133 million. The latest tranche included participation from IDC Ventures and others.
traceless materials, a Germany-based startup that turns agricultural industry plant leftovers into natural biomaterials, picked up a €36.6 million investment led by United Bankers’ UB Forest Industry Green Growth Fund I LP.
Pexapark, a Switzerland-based market intelligence, software and advisory company specializing in renewable energy, secured €20 million in Series C financing led by Telstra Ventures.
Mundi, a Mexico City-based fintech platform for cross-border trade, landed $15 million in Series A2 funding led by Haymaker Ventures.
Airmart, a Redwood City, Calif.-based e-commerce platform for food vendors, collected an $8.2 million investment from Craft Ventures and others.
Correcto, a Madrid-based Spanish writing tool that corrects grammar and usage in real time, scored a $7 million seed round from investors including River Park Ventures.
Crediverso, a Los Angeles-based provider of free financial and educational resources to underserved communities, raised $3.5 million in a pre-Series A funding from Torch Capital, Bessemer Venture Partners and others.
TeachMe.To, a startup providing instruction from local coaches, was seeded with a $2 million investment led by 1984 Ventures.
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OpenAI’s ChatGPT now has a voice, making it more like other AI assistants. PHOTO ILLUSTRATION BY THE WALL STREET JOURNAL
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