2023 was a year of resilience and adaptation for startups, venture capital, and markets worldwide. With the central banks fine-tuning monetary policy, and balancing growth concerns and inflation pressures, market narratives changed dramatically at startup land too. The normalization of funding, post the COVID-era peak, steered the focus back to the fundamentals of startup growth and sustainability.
This year, after riding a wave of venture capital enthusiasm and growth driven by fear of missing out (FOMO) in previous years, we saw a decisive shift towards sustainability. Startups were adjusted to prioritize profitability and long-term viability over rapid expansion, resulting in a recalibration of valuations and a more selective investment climate.
Meanwhile, generative AI’s impact on business and society dominated the global conversation. With over a year since the launch of ChatGPT and its adoption by over 100 million users, the landscape of technological infrastructure is reshaping. The past year marked the beginning of a new phase and we believe this is an incredibly rare opportunity. We're excited to support companies all over the world in our key areas of enterprise technology, which include Generative AI, Cyber Security, DevOps, Vertical SaaS, and Open Source.
We founded ScaleX for two reasons: to find the best founders focusing on disruptive innovation and to build an ecosystem of founders and operators, helping them in their journey to become global leaders.
We made great progress toward our vision of designing the way our operators help our founders and finding the best founder. We'd love to share an overview of how ScaleX Ventures has progressed in 2023 with you.
This year, our portfolio has seen significant growth. As we near the conclusion of the investment period for our first fund, our portfolio has expanded to include 17 companies, thanks to the five new investments made this year in Coqui, Bluedot, Flowla, and two others to be announced soon. Additionally, we've participated in two follow-on funding rounds for our existing portfolio companies.
Another update about our portfolio: the launch of the Founders’ Partner Program, which we announced earlier this year.
Our approach has always been entrepreneur-first, and now we're taking it to the next level. We've designed a program that integrates our entrepreneurs into the ScaleX team, similar to how stock options work in startups.
With this new initiative, founders of our portfolio companies become an integral part of what we collectively build at ScaleX through the Founders’ Partner Program. Every founder we invest in receives a share of our profits. Our goal is to foster a strong community where each founder supports one another and helps each other grow.
Looking ahead, we aim to round out this fund's portfolio with 3-4 new investments in the first 6 to 9 months of the upcoming year. Since we started this journey in 2020, it's been a pleasure to work alongside the 29 founders of the 17 companies in our portfolio. We're especially grateful to our founders who have remained committed to their vision of global success, even through recent challenging times.
This year's standout events were Investor Day and the ScaleX Founders Forum, held back-to-back.
At Investor Day, we connected top investors from the region to talk about the local investment scene, current tech trends, and predictions for the next five years. The ScaleX Founders Forum was all about bringing early-stage B2B SaaS startup founders together. We dove deep into topics like scaling globally, founder-led sales, and creating an effective go-to-market strategy.
The pandemic had stopped us from our gatherings, but we were back in 2023. These are pollination of our network from California to India bringing the best people to connect, learn and share together. We'd love to hear your ideas for next year's events.
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We're keeping up with our happy hour tradition, although this year we could only manage to have them in San Francisco and Istanbul for reasons beyond our control. Exciting news for next year – we're bringing back New York, London, and Berlin to our happy hour list!
This year has been another great learning experience for the ScaleX team. We've expanded our network and boosted ScaleX's global presence through various local and international events.
Another exciting update for our team is our move to the new office in Arnavutkoy this past February. We kicked off our time there with a launch party, welcoming entrepreneurs we've connected with over time. It's been 10 months of working in this new space, and you might have noticed the phone booths where we've been handling our Zoom calls. If you're ever in Arnavutkoy, feel free to drop us a line and swing by our office.
On average, our team members have been with the ScaleX Ventures family for over 5 years. Looking ahead, we're excited to grow our team with the launch of our new fund next year. If you know anyone passionate about supporting early-stage founders, please feel free to refer them to us.
Before saying goodbye, once again: Great businesses are born out of challenging times.
You've likely heard this saying a few times this year, and we have mentioned it too. Looking back at the Great Recession of the late 2000s, we find ample evidence with examples like Airbnb, Venmo, WhatsApp, and Slack. Yet, in 2023, amidst challenges like bank collapses, business shutdowns, rising interest rates, reduced spending by customers and companies, layoffs, and more, it was difficult to see a hopeful future. However, there is hope. We've already seen several inspiring stories from our community that highlight the successes of 2023.
Once more, we are thankful for the chance to collaborate with entrepreneurs who are reshaping the way the world functions.
A big thank you to our portfolio companies, industry partners, customers, and community for your cooperation. That’s a wrap for 2023. We look forward to 2024 and are excited about the opportunity ahead and look forward to continuing to work with you in the new year!
