Seed Investments Take A Hard Hit in 2014 — Globally

So the seed bubble has popped in the U.S. — but what about the rest of the world?

After finding that the number of U.S. seed rounds raised in 2014 went down 30%, Mattermark‘s Danielle Morrill suggested that artificially low interest rates and other key economic indicators might be to blame.

An analysis of CrunchBase data paints a slightly less drastic picture — a very sparse 4th quarter brought 2014’s yearly total down, but Q1 and Q3 numbers were on par with what we saw in 2013.

A difference in opinion on the definition of a seed funding could account for the discrepancy in the results. Either way, it’s clear there’s something strange going on here — as amount invested continues to rise across the board, seed rounds are lagging far behind.

And on an international level, the problem worsens — the data coming out of countries with the top number of internet users (the same countries that are often identified as up-and-coming startup hubs) is even less encouraging. The number and size of seed investments is declining, with frontrunners Germany, India and China taking the hardest hit.

The top 3 countries by number of internet users are China, the U.S., and India — not an unexpected figure. But Brazil ranks 5th, Nigeria 8th, and Mexico 11th, with hundreds of millions of connected users in aggregate.

And according to We Are Social‘s latest Digital Social & Mobile report, the number of active mobile connections surpassed the total world population just last month.

Seed rounds in these regions should be increasing as more local startups raise venture money to tap the growing market, but instead we’re seeing the opposite.

What’s going on here?

Are investors reacting to mounting concerns about valuations, or are good risk/reward opportunities in the Series A and Series B stages pushing them to invest later?

Share any hypotheses or predictions with us here, and send over any seed rounds you haven’t announced to feedback@crunchbase.com.

Startup Calendar for January 27th

Today is the last day to vote for the nominees at the 8th Annual Crunchies. Don’t know who to vote for? Read more about each nominee here. This week we’re also featuring a Saas Business Conference held in Singapore two days from now as well as a a conference focusing on smart technology for the road.

Other events:

As well as ten accelerator programs:

Read the weekly newsletter for more. To take part in this program as an organization that hosts startup events, visit the Startup Calendar page for guidelines and send us an email at events@crunchbase.com. We look forward to hearing from you!

Prices Plunge But Investors Are Still Bullish On Bitcoin

Prices Plunge But Investors Are Still Bullish On Bitcoin

Bitcoin has taken a major hit in the past year, now trading at just over $200 from a peak of roughly $1,200 at the end of 2013. But VCs are undeterred.

In the past two weeks, venture investors have already inked three deals for Bitcoin startups — one of which, a $75M Series C for Coinbase, is the largest investment in the space to date.

This is a trend we’ve picked up on before. Last year, a sharp drop in bitcoin prices over a weekend in October was followed by so much VC activity that the subsequent week’s total accounted for 15% of the $360 million raised by bitcoin startups in previous two year span. Continue reading

Ask A VC: Rock Health’s Halle Tecco

Ask A VC: Rock Health’s Halle Tecco

Editor’s Note: This is a repost of a TechCrunch article by Christine Magee. 

Halle Tecco is the founder and managing director of Rock Health, a digital health-focused seed fund. Rock Health has backed over 80 healthcare tech startups in the past four years including Omada Health, Doctor on Demand and Augmedix.

Everyone’s been talking about wearables this year – it’s estimated that 10M activity monitors were sold in 2014 alone. What’s the next phase in wearable tech?

We did some research around wearables in the spring of 2014, and we noticed that venture funding of wearables grew 5 times from 2011 to 2013. So there was this record number of deals done in the wearable space, and obviously there was also a concurrent rise in sales of these wearables (that was really led by Fitbit). All of the original wearables were pretty much activity trackers taking simple measurements — but we see these as a gateway to something more.

We are starting to see some really interesting technology that is more biosensing, using micro-needles to get into the interstitial fluids in a noninvasive way, or measuring new sources of data like your breath – like Spire, for instance. And then there’s a company called Empatica that’s trying to predict seizures. So having perhaps more of a clerical focus is where we see all of this technology going. And of course there’s the Google contact lens for non-invasive glucose monitoring — that one’s very cool, and the inventor of that technology recently went over to Amazon, so who knows what Amazon’s going to be doing. But all of these tech giants are starting to invest in this space, which is fantastic.

When we talk about health and activity trackers, it seems like we forget about the massive amount of personal data involved. Should we be concerned about where this data is going?

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You’re right – there is a type of person who is concerned about that. Me personally? First of all, I can’t imagine how the data would be used against me. If someone’s going to steal my health data — to what end? My employer’s not allowed to fire me for that, my insurance company isn’t allowed to increase my payments because of that.. I don’t see a motivation to steal it, so personally I think that’s the wrong way to look at the problem. I think it’s something we have to consider in any sort of technology, but to me, the worst case here would be that someone is too afraid to use this technology and in turn they don’t learn more about themselves. We call this citizen science — if we have more data we can find more answers. The downside is much higher if someone steals my ATM card than if they steal my Misfit data. Continue reading

Startup Calendar for January 20th

Three events are featured in this week’s Startup Calendar:

Other events:

As well as ten accelerator programs:

Read the weekly newsletter for more. To take part in this program as an organization that hosts startup events, visit the Startup Calendar page for guidelines and send us an email at events@crunchbase.com. We look forward to hearing from you!

Start-Up Chile Launches Follow-On Fund To Boost Local Growth

Start-Up Chile Launches Follow-On Fund To Boost Local Growth

Editor’s Note: This is a repost of a TechCrunch article by Christine Magee.

Shortly after launching Start-Up Chile, the state-backed accelerator program designed to spur the development of a startup ecosystem in Chile, the Chilean government realized they had a problem on their hands. The program was running smoothly, but a dearth of local investors was driving a good portion of its graduates to a premature death.

Five years later, Start-Up Chile has devised a solution to this problem — it will fund the startups itself, through a follow-on fund launching today called Start-Up Chile SCALE.

Start-Up Chile has graduated over 1000 startups from its accelerator program that offers entrepreneurs $40k in equity-free financing to temporarily relocate to Santiago, Chile. These companies have gone on to raise hundreds of millions in follow-on funding, generating a massive amount of press for the program and for Chile’s budding tech scene.

But the project has faced its fair share of challenges. You can relocate hundreds of international entrepreneurs to Chile, fly in dozens of experienced mentors, and hand out stacks of government money to everyone, but building a startup ecosystem from scratch takes time. Continue reading

Israeli Entrepreneurs Drive Transportation Tech

Israeli Entrepreneurs Drive Transportation Tech

With a fresh $50 million in Series C funding announced yesterday, Israeli public transportation startup Moovit has sped into 5th on a list of Israel’s top venture-backed startups.

Israeli entrepreneurs have been winning in the transportation market lately — from mobile navigation app Waze‘s $966 million exit to Google in 2013, to taxi booking startup GetTaxi‘s latest $150 million funding tranche announced in August.

Moovit counts two of Israel’s most active VCs — Sequoia and Gemini Israel — as return backers in this latest round, which also saw participation from transport giants BMW and Keolis.

Continue reading