🌙The Bulletin #52: Crypto VC Investment Breaks Slump, Disney's Activist Investor, and a 3x Unicorn Success Story
In this week's bulletin - $2 billion funneled into crypto in Q1 '24, an end to Disney's proxy war, and a climate tech company builder doing the impossible.
💸 Crypto Resurgence in Q1
With the first quarter of 2024 marking a remarkable turnaround for cryptocurrency investment after a two-year slump, the allure of digital assets has once again surged. In Q1 of this year, VCs invested around $2 billion into crypto, which marks a 38% increase from the last quarter of 2023.📈
In addition, VCs invested in a whopping total of 250 crypto projects, which is a 49% increase from the last quarter of 2023.
These impressive stats signify the end of a 2-year investment slip – marked by events such as the crypto liquidity crisis of 2022 and FTX’s collapse.😔 Crypto investment reached an all-time high in Q4 2021 with a total of $14 billion invested and has not seen remotely similar numbers since. However, some are speculating that Q1 2024 could be the start of a new wave – a resurgence of crypto.🚀
One interesting thing to note is that crypto investment in Q1 2024 was very different from previous quarters with a record amount of crypto-focused VCs getting involved. Banks and non-crypto VCs were in the minority in this quarter, with crypto-native VCs like OKX Ventures, Multicoin Capital, and Andreessen Horowitz Crypto dominating the investment. In March alone, $1.1 billion was spread across 180 investments.
Some of the notable raises this quarter included Hashkey, a digital asset financial services group in Asia, and EigenLayer, the company behind Ethereum restaking protocol, who each raised $100 million via a series A and a private raise.🤑
🐭 Proxy War Against Disney Comes to an End
In the past few months, as Disney's financial performance was called into the spotlight, an activist investor took it upon himself to question the company's ability to recapture the magic that once defined its cinematic legacy.🎥
However, as of this past week, a months-long proxy war between Disney and activist investor Nelson Peltz officially came to an end.
Peltz, founding partner of Trian Fund Management, was looking to secure two seats on Disney’s board, but at Disney’s annual shareholder meeting, lost to a majority vote. 75% of retail shareholders voted in favor of Disney’s current board, marking a substantial loss for Peltz.
In its proxy war, Trian Fund Management cited billions of dollars of loss in shareholder value and disappointing content from Disney. In the last 3 months of 2023, Disney lost 1.3 million Disney+ subscribers.❌ In general, Disney has struggled to navigate a mass consumer shift away from cable packages. Trian Fund Management called on Disney to develop a clearer streaming strategy to achieve “Netflix-like margins.”
Following the vote to keep the current board, Disney will face much more pressure to deliver results. Activists will continue to circle this company unless progress is made. Disney has recently started to implement an ad-supported tier for Disney+, increased prices of streaming services and parks, and has cracked down on password sharing. Further, Disney is looking to cut $7.5 billion in costs by the end of the fiscal year.
CEO of Disney, Bob Iger, cited the entire proxy war as a distraction, claiming that it took Disney a “tremendous amount of time and focus.” For the sake of all Disney fans, let's hope Iger is right, and that Disney is on a good trajectory to restore its former glory.👑
🦄 3x Unicorn Success Story
Imagine going 3 for 3 on founding and funding unicorns. Impossible, right? Well Vargas Holding, an impact company builder and investor, has seemingly cracked the code.
Founded in 2014 with the vision to decarbonize 1% of global emissions, Vargas aims to validate business cases, finance, launch, and then scale companies in the climate tech space.♻️ Their first 3 companies all attained unicorn status – holding an impressive 100% success rate. The 3 companies are Northvolt, H2 Green Steel, and Polarium, which have collectively raised over $20 billion. Everything Vargas touches seemingly turns to gold.✨
Northvolt is a company that manufactures lithium-ion batteries for a variety of industries, including automotive, renewable energy storage, and industrial applications.🔋 Polarium is an energy storage company that focuses on combating intermittent power supply, driving a clean energy future.⚡ Finally, H2 Green Steel produces fossil-free steel using green hydrogen as its reduction agent. This is a great alternative to the traditional carbon-intensive steelmaking process.🏭
Overall, Vargas’ track record is nothing short of impressive. Hopefully, they will have similar luck with their two newest additions to the portfolio, Aira and Syre.
That’s it for this week, feel free to email me at abigail_gonzalez@brown.edu with any inquiries!✨
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