The two large equity funds came out of the gate this week. Earlier this year, we caught up with Liquidity Group, a growth-stage debt financier, who raised $40 million and launched a $250 million debt fund for tech firms. Backers included MUFG and Apollo.
Liquidity is an interesting beast. It's part of a technology platform and part of a lender, using its technology to make decisions on deploying debt facilities and other financial solutions from $5 million to $100 million. The company claims its processes are relatively faster than more conventional approaches.
It also establishes a $250 million debt fund to provide growth funding to late-stage tech companies and mid-market companies.
The two companies, MUFG and Liquidity, are planning to launch five non-dilutive funds on Mars. The first equity fund, powered by the same technology referred to above, will be targeted at late/growth-stage companies. Mars Growth Capital and Dragon Fund are based in Singapore and the venture is aimed at equity investments in APAC.
He will make growth equity investments in private, mid-to-late-stage tech and tech-enabled companies, first focusing on Asia-Pacific. The deal sizes range from $20 million to $100 million. MUFG is extending its capital commitments to Mars Growth Capital's non-dilutive funds program from $750 million to $1 billion.
This week, Dawn Capital, one of Europe's largest specialist B2B software VCs, raised $700 million to invest. This move was more significant news for early-stage companies.
This included the $620 million Dawn V, which was aimed at Series A and B stages, with initial investments of $10 million to $40 million, and enough capital for follow-on rounds. Dawn Opportunities III, an $80 million follow-on fund, is aimed at Series C stage onwards.
Dawn has to date invested in all unicorns, including Mimecast, iZettle, Tink, LeanIX and more recently Collibra, Dataiku and Quantexa.
What are we going to make of the arrival of such funds?
here are some observations you might like to mull over.
Firstly - and this is what I'm hearing at the private dinners and drinks events amongst VCs in London, for example - late-stage capital to bolster pro-IPO companies is coming back.
Most analysts now know that the last quarter of this year is going to be flat. It will now be a key marketing period for late-stage and growth funds to get into companies, waiting for markets to bounce back in Q1/Q2 of next year. Then, with the above, Liquidity comes out of the gate. Secondly, pure, early-stage VC funds like Dawn, which have a deep bench in deep tech, are quite happy to be raising and deploying funds at ab early stage right now. It will still take at least a few years for those bets to mature, and with valuations down, early-stage VCs with new funds are getting far better deals than the ones that were deployed in 2021 and 2022. Besides, the generative AI booms will suck up a lot of that early-stage capital.
So there are at least some explanations as to why these larger funds are appearing in what, outwardly, appears to be a down/flat market for startups right now.