Coat — certainly one of the best-performing investors in the course of the record-breaking 2021 entrepreneurial season — got here back right down to earth last 12 months, reducing its deal volume by 82% in comparison with just two years ago.
In 2023, the crossover investor giant only participated in 29 accomplished and announced enterprise deals, based on Crunchbase data — a pointy decline from the 168 deals it participated in in 2021 and a 57% decline from 70 deals in 2022.
As the variety of deals dropped, the overall value of all deals by which Coatue was involved also dropped. The 168 transactions by which Coatue participated amounted to almost $43 billion. (This was the overall dollar amount of all trades, not the quantity invested by Coatue. Individual round investments are typically not disclosed.)
Last 12 months, the overall dollar amount for the 29 deals by which the corporate participated was just $4.1 billion, on Crunchbase.
In the headlines
Coatue, whose more notable investments include: Lift, Reddit AND Box made headlines recently closes its office in London earlier this month – the corporate still plans to take a position in European startups – as well News This Michael Gilroythe corporate’s general partner, who co-led the event team and focused on fintech firms, is leaving.
But so it was reported the corporate has raised about $3 billion for a structured equity fund, which allows private firms to boost money in structured financing and avoid downgrade rounds.
Such financing wouldn’t be latest to Coatue. In 2022, this was the case reported Komodo Health raised a “structured equity capital injection” of $200 million led by the corporate. Coatue also provided $150 million in debt financing for the corporate Navan — then called TripActions — that very same 12 months.
Last August alone, Coatue also participated in a $2.3 billion debt financing to launch an AI cloud infrastructure CoreWeave. The round was actually the biggest round involving VC-backed firms that Coatue participated in last 12 months.
However, the corporate also participated in two rounds of financing value $300 million in each cases Ramp AND Our next energy – in addition to $290 million in financing Sierra Space. Coatue didn’t lead either of those rounds.
Another time
Of course, Coatue will not be alone in divesting. Other large crossover investors who’ve had great success within the enterprise capital market, e.g Global Tiger AND Dragon also significantly reduced the pace of investment.
As ventures began to blow up in 2020, many large firms with deep pockets saw the startup sector as a viable investment that might produce out-of-pocket returns. As money became dearer in late 2021 and startup valuations began to say no, many firms were forced to take significant discounts.
For now, it doesn’t appear to be 2024 can be the 12 months of the massive rebound. For example, Coatue has only participated in a single enterprise round announced this calendar 12 months for Montreal-based software startups Valsoft.
However, in relation to ventures, things can change quickly – just take a look at how quickly the market has modified after 2021.