More Micro Funds Actually | AgentSync Becomes A Unicorn | Crypto Investing Continues To Amaze

In this edition, we look back on the year and highlight progress and updates from some of our past coverage. To start, I checked back in on micro funds. I covered these small firms earlier this year because the data showed they were on track for the lowest closed fund count in years, despite the feeling that new firms were popping up daily; turns out the data was lagged and that was wrong! I also checked back in with Zane Venture Fund, which we wrote about in May when it held its first close on its debut fund. It recently raised a fun carveout worth highlighting. Alex catches up with AgentSync, the very first deal covered in this newsletter. The company has gone on to raise new funding and become a unicorn. We also look at updated crypto investing numbers for 2021 which are up 700% since we last checked in March. Let’s do it!

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By the numbers: In 2021, 317 micro funds were raised in the U.S. for a total of $4.5 billion, according to data from PitchBook. The 317 fund count is just one shy of the peak set in 2018 when 318 micro funds were raised. “The number of micro funds, we are seeing a huge number,” PitchBook senior analyst Kyle Stanford tells Midas Touch. “We talked about the number of micro funds being small, what we see in those size funds is a huge lag in data collection.”

As noted in the original story, these funds make up a tiny chunk of the overall funds in the market — 3% as of Q3 data — but they tend to have an outsized impact. That’s because micro funds aren’t necessarily trying to compete with the larger players and can usually bring more to the table than capital. Many are based in or focused on markets outside the main U.S. hubs where they can make a difference in the growth of emerging markets largely overlooked by the larger firms, Stanford points out...

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That valuation lasted all of nine months. Earlier in December, AgentSync raised another $75 million at a $1.2 billion valuation. Our touch may be golden, but that’s still a big number, fast. So we caught up with Sabharwal to hear how AgentSync made it happen – and lessons learned from three funding rounds in less than 18 months.

The round: The simplest explanation for AgentSync’s fundraising is that it’s hiring fast. In March, the company had about 50 employees; it’ll finish the year at close to 130, with new heads of engineering, product, product management and marketing. The startup still had $30 million-plus in the bank, Sabharwal says, but wanted to add more salaries. “We started looking at the operating plan for the next year and the year after that and realized there are a couple of areas we really wanted to double down, even triple or quadruple, specifically in R+D and marketing,” Sabharwal says. That means a planned headcount of 200 in a year’s time...

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