Happy Friday. Welcome to The Chaos Coordinator! We are Brain Candy's snarky little sister, delivering carefully curated news happening across the industry (that you should probably care about) right to your inbox, with a hefty dose of irreverence.
In this issue, we dive into:
Early Stage VCs
AI Chips
IPOs x PEs
Moody's x AI
Barbie
What's happening in.....
PE/VC
Small, But Mighty
Smaller, early-stage VC funds are having a moment.
We have all grown pretty comfy with the dominance of large VC firms in the startup ecosystem, however, small, early-stage VC funds are gaining momentum in the space, becoming an appealing alternative for investors. These funds typically have a narrower investment focus, targeting startups in specific industries or geographic locations. By specializing, these funds can leverage their expertise and networks to support early-stage startups effectively and efficiently. Smaller funds can be more nimble and adaptable, enabling them to capitalize on emerging opportunities and investing in overlooked regions or industries that are underserved by larger firms, allowing them to discover hidden gems.
While they face challenges like limited resources or difficulties fundraising, small early stage VC funds offer personalized support and agility, quickly becoming an appealing option for investors and early-stage startups. Read more here.
ENTERPRISE SaaS/FINTECH
Regulation, Regulation, Regulation
We're kind of sick of hearing this word.
This week, the Wall Street Journal reported that the United States has been deliberating imposing further restrictions on the export of AI chips to China, concerned about the potential military applications of these high-performance chips and their overall contribution to China's technological advancement. The WSJ explains that the U.S. Department of Commerce is contemplating the idea of adding Semiconductor Manufacturing International Corporation (SMIC), China's largest chip manufacturer, to its entity list. Being included on this list would require American companies to obtain licenses before exporting certain goods to SMIC. The proposed measure is aimed at addressing national security concerns and preventing sensitive technology from reaching China's military and defense orgs. However, restricting the export of AI chips to China could disrupt global supply chains and impact US companies that rely on revenue generated from chip sales - remember Nvidia? The chip giant warned Wednesday that if the United States imposes new restrictions on the export of AI chips to China, it would result in a “permanent loss of opportunities” for US industry.
In the words of the WSJ, "the IPO window has opened—at least a crack—and private-equity sponsors are lining up." Among the IPOs this week are EQT-backed Kodiak Gas Services and Ares Management-backed Savers Value Village, "marking the return of leveraged buyouts to the IPO market", reports IPO specialist, Renaissance Capital. “The IPO market broadly is opening up, but PE especially is having a moment,” said Matthew Kennedy, senior IPO market strategist at Renaissance Capital, noting that all of the largest IPOs this week were backed by private equity. This shift reflects a change in the balance of power between public and private markets, with private equity firms increasingly seeking exit opportunities through IPOs rather than traditional sales to other firms.
For more on the growing competition between PE firms and investment banks for underwriting IPOs, read more here.
GENERATIVE AI
Moody's x AI
AI finds a home with Moody's.
If you are anything like us and have found yourself wondering how AI will be implemented into the financial space, Moody's is showing us all how it's done by using the Microsoft Azure OpenAI service as an engine to help unlock research information and risk assessment capabilities, reports VentureBeat. Microsoft has developed this generative AI tech for Moody's to assist in automating the creation of data-driven narratives and reports, enhancing the efficiency and accuracy of overall analysis. By leveraging natural language generation capabilities, the system generates narratives based on data resulting in valuable insights for users. Among the first services to be launched is Moody’s CoPilot, an internal tool that will help the company’s 14,000 global employees more easily search and access data and research using the power of large language models.
Barbie's limitless marketing campaign paints the world pink.
The summer of Barbie has only just begun. With over 100 brand collaborations under way, including a Barbie-pink luggage set with Beis, a themed X-Box console, a Progressive insurance commercial, AND Barbie's Malibu Dreamhouse going up for rent on Airbnb, it is hard to forget that one of the summer's most highly anticipated movies and its star-studded cast is hitting theaters soon. Earlier this year, the launch of the Barbie cast posters ahead of the official trailer release took social media by storm, launching the 64-year old brand back into the spotlight. Since then, a flurry of new brand collaborations and merchandise have been announced, accompanied by traditional OOH initiatives such as billboards and immersive fan experiences.
Exactly how much of Barbie's reported $100 million budget is being devoted to marketing initiatives like the DreamHouse remains a question mark, but this Twitter thread highlights some of our favorite work here.