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After Slowing Investment Pace, Lightspeed Ended 2023 On A High Note

There was a bit of Lightspeed Venture Partners news that swirled around last week, as it was reported that the firm may start a continuation fund and that one of its large portfolio companies may go public soon.

However, the nearly quarter-of-a-century-old venture firm — known for investments in companies such as Snap, Nest and Stripe — actually started to make some more news late last year as it significantly picked up its investment cadence in the final quarter of the year.

While the firm’s deal count was down 39% last year when compared to 2022, Lightspeed ended the year making 30 deals that totaled $1.9 billion in Q4, per Crunchbase data. (That was the total dollar amount of all the deals, not what Lightspeed invested. Individual investments in rounds are not typically revealed.)

The number of Q4 2023 deals is the most Lightspeed took part in in one quarter since the second quarter of 2022 — when the venture market was starting to noticeably slow.

Of course, last year’s numbers still pale in comparison to previous years. In 2021, the firm took part in a whopping 179 deals that totaled an eye-popping $15.1 billion. In 2022, those numbers fell to 138 deals totaling $9.7 billion.

Last year, Lightspeed took part in only 84 deals that totaled $4.3 billion — although deal volume slowly crept up every quarter until exploding in the fourth.

Big deal

Lightspeed also took part in some big, notable rounds, especially later in the year. Those include Paris-based AI startup Mistral AI’s $415 million round led by Andreessen Horowitz, and India-based e-commerce startup Udaan’s $340 million Series E, both in December.

It also co-led cybersecurity startup Wiz’s $300 million Series D at a valuation of $10 billion earlier in the year.

However, it was another big cybersecurity round last year that put the firm’s name back in the spotlight last week. Lightspeed led ​​Tel Aviv-based Cato Networks$238 million round at a valuation of more than $3 billion in September.

It was reported last week that Cato Networks — along with fellow Israeli cyber startup Snyk — is looking to go public and plans to hire bankers by March for an IPO later this year.

In an odd twist, it was simultaneously reported that Lightspeed has talked to investors about selling a portfolio of holdings it values at roughly $1 billion and rolling those assets into a continuation fund to return some cash back to investors — which has become difficult with the dearth of M&A and the frozen IPO pipeline.

Nevertheless, even as the firm apparently searches for both traditional and nontraditional ways to return cash to investors, it seems to be keeping its eyes on investment opportunities.

It’ll be intriguing to see if Lightspeed quickens the pace this calendar year.

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Illustration: Dom Guzman

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