Analyzing February's Investment Trends: Key Takeaways in Private Equity and Debt

Editor’s Note:

What an incredible evening we had at the Startup Showcase in Chicago! As we look back, we're thrilled by the success of the event and the dynamic interactions between investors and founders. For those who attended, and even those who couldn't make it, we've got a special for you to check out our insights on all the companies that pitched. Scroll further down for details.

CHART OF THE WEEK 📈

February saw a major retreat in capital commitments, down nearly 50% from January. Nonetheless, Wefunder’s performance and the Healthcare & Pharmaceutical industry stand out in this month’s financial flow. Here are some key takeaways from private investing last month:

• February closed with $43.3 million in committed capital across equity and debt deals, down significantly from $84.5 million in September.

• Wefunder came out on top for Reg CF equity dollars invested for February 2024 with $6.3 million.

• Healthcare & Pharmaceutical was once again the most popular industry for the month, bringing in $3.3 million from Reg CF equity offerings.

• 39 equity deals closed in February: 36 Regulation CF deals and 3 Regulation A+ deals.

• 117 new deals went live in February: 63 Reg CF equity deals, 4 Reg A+ equity deals, and 50 Reg CF debt deals.

Thanks for making the Startup Showcase in Chicago a Success! 

The Startup Showcase was nothing short of spectacular. It was a gathering of brilliant founders, innovative ideas, and a savvy, engaged audience that asked excellent questions. The event was a testament to the development of startup ecosystem and the growing sophistication in the space. We had BuildClub, SapientX, Infinity Fuel Cell, Choose Your Horizon, Dice Cream, and Pirouette Medical that left a lasting impression.

We're excited to present an exclusive offer to keep this momentum going and offer you a closer look at these incredible startups. For those not yet part of the KingsCrowd membership, now is your chance to join us. We're offering a 30-day free trial to Edge, giving you access to in-depth analysis and ratings of these startups. Use the code STARTUPS to unlock this opportunity at sign-up, or tap the button below.

PITCH REVIEW 💸

Brief: Sool is on a mission to popularize Korean alcohol and has introduced a modern twist on traditional makgeolli, a Korean rice beer, through its flagship product, Makku. It’s raising $616K with a valuation cap of $18M and a minimum investment of $100.

Key People: Sool is led by CEO Carol Pak. Before her time with Sool, she was the Global Manager of ZX Ventures, a global incubator and venture team backed by Anheuser-Busch InBev. This experience is ideal, combining entrepreneurial acumen with venture networking and beverage sector expertise. Pak holds an MBA from Columbia Business School, further complementing her network and managerial skillset.

Interested in Sool? Access the deal report HERE 🔓📈

Summary

Here's what we like: Sool has experienced significant traction in the U.S. market, as evidenced by its distribution in 1,400 accounts across 23 states, and becoming the sixth fastest-growing craft beer brand in New York. This growth is further underscored by the company's successful placements in prominent retail chains such as Whole Foods, Total Wine, Bevmo, and Wegmans. The company's product, Makku, is a modern take on the traditional Korean rice beer makgeolli, and it has resonated with consumers, resulting in the sale of 3.3 million cans since its launch.

Makku has appeared on several lists of the best makgeolli available around the US. While there are a few competitors, Makku stands out with modern, sleek branding and will likely appeal to customers looking for gluten-free alternatives to traditional beer.

The U.S. rice alcohol market is niche, but has yet to be disrupted and provides a ripe opportunity for a brand like Sool, which is bringing innovation to a traditional drink. With venture capital backing from investors such as Strong Ventures and Laidlaw Scholars Ventures, Sool has the financial support and guidance to propel its growth trajectory.

Here's what we don't: While Sool aims to carve out a niche by globalizing Korean rice alcohol, the extent of this market within the broader U.S. alcohol industry is relatively small. The specialized focus on makgeolli positions Sool in an underdeveloped market compared to more mainstream offerings such as craft beers. Craft beers represent considerable indirect competition, boasting a growing following that could potentially overshadow the appeal of niche products like makgeolli, thereby limiting Sool's market share.

The company is burning approximately $46,000 per month. This burn rate suggests the company has a runway of around four and a half months based on the last reported cash on hand of $210,436. This indicates a need for the company to secure additional funding or achieve profitability soon to maintain operations.

ON THE POD 🎙️

In this episode, Chris engages in an enlightening conversation with Haley Bryant, a pre-seed investor at Hustle Fund. As a venture capital fund focused on “hilariously” early startups, Hustle Fund is carving a path in the industry by democratizing venture capital through their Angel Squad program and seeking out exceptional founders beyond the Silicon Valley bubble. This episode dives deep into the intricacies of angel investing, explores the evolving landscape of startup funding across different regions, and discusses the critical shift towards a more data-driven venture capital approach.

Listen to the full episode here

STAFF PICKS 🌶️

Kuleana Spirits

Kuleana Spirits, renowned for its award-winning, sustainable rums crafted from fresh cane juice using regenerative farming, prides itself on producing additive-free rums. Their products have earned acclaim in Forbes and Wine Enthusiast, reflecting their commitment to quality and sustainability.

• Pre-Money Valuation: $25 million

• Minimum Investment: $500

Fiorella (Debt)

Fiorella Management Group, a San Francisco-based restaurant, is conducting a fundraising campaign on SMBX. Known for its wood-fired pizza and Italian-inspired cuisine, Fiorella emphasizes high-quality, locally sourced ingredients to create seasonal and flavorful dishes.

• Interest Rate: 10.5%

• Minimum Investment: $10

Ducere Global Business School

Ducere Global Business School is an innovative education group offering undergraduate and postgraduate business degrees focusing on imparting industry-relevant skills. These degrees are globally recognized and accredited, preparing students for the professional world. Ducere has garnered accolades from the US Congress, CEO Magazine, and more, establishing a strong presence in the online education sector.

• Pre-Money Valuation: $75 million

• Minimum Investment: $498