The markets have changed gears since our last update. After a couple of years of significant liquidity and a raging bull market, we are now in a more measured venture and investing market. The market focus has moved back to efficient growth. This was long overdue, and we welcome the opportunities that this phase will bring. We believe that long-term fundamentals for software-driven re-invention of industries and functions stay intact and are indeed stronger than any prior time in history. With record amounts of venture commitments in place, great founders with solid businesses will continue to have ample funding options over time. And enterprise/SaaS companies with efficient cross-geography models continue to be well-positioned in this changing macro environment.

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Business customers are getting more discerning about what software they spend on. Decision-making may be delayed in many places, and enterprise sales cycles are likely to get longer and more complex. However, great software products bring more efficiency to their customers and can help them improve their business and operate more efficiently. Many B2B software products will continue to have strong uptake even in a slowing market. We are seeing this through our portfolio companies.

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Venture deal-making has been slow this summer, and investors are now more discerning about where they invest. The proverbial flight to quality is in play. We are finding that the capital-efficient growth of cross-geography companies is now even more appreciated by market participants. Investors are gravitating toward strong and predictable business models. Enterprise/SaaS companies with good efficiency metrics are finding themselves in favor. Half a dozen Emergent companies closed strong financing rounds in recent months. Some are listed below.

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Slower markets have their own advantages. They offer stronger businesses an environment with less noise and potentially easier access to talent. For startups that are earlier on, there is a bit more time to get the foundation right. For software products that can help customers reduce costs and overhead, the value proposition becomes stronger as buyers focus on cost efficiency. And investors now have more reasonable valuation entry points in this market.

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Smart entrepreneurs have already begun to adapt how they operate. Several are mixing in updated pitches that align better with changing customer focus towards efficiency. Most have reviewed their own growth versus spend tradeoffs, and many have adjusted their hiring and spending plans. Some have prudently raised additional capital. Vast majority of our portfolio companies have significant runways and continue to clock solid growth.

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We closed our second, larger flagship fund a few months back and continue to partner with the best founders in intelligent software at the earliest stages. We also have an expanded opportunity fund in place to continue backing winners from our portfolio. We are investing actively, and are optimistic about the companies that will be built and shaped during this economic period.

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Portfolio Fuels Up

Coverage of selected recent funding rounds in the Emergent portfolio

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Observe raises $125M to transform contact centers - Observe.ai, an Intelligent Workforce Platform that transforms contact centers through AI, raised $125M in Series C funding led by SoftBank with participation from Zoom. Emergent first partnered with Observe at their pre-seed round. (Link)

Boostup raises $28.5M to drive Revenue Intelligence - Boostup announced $28.5 million in Series B funding led by NGP Capital. BoostUp helps sales teams get more productive and drive more revenue. Emergent first partnered with Boostup at the pre-seed stage. (Link)

Prezent raises $20M to gamify business presentations - Prezent.ai, a presentation productivity platform for enterprise teams, closed a $20 million Series A round led by Greycroft. We initially invested in the company’s seed round last year. (Link)

Arcion raises $13M to help companies replicate data across platforms - Arcion raised a $13 million Series A round led by Bessemer Venture Partners with participation from Databricks. Arcion provides tools that allow customers to migrate, replicate, and perform analysis on platforms like Databricks and Snowflake. Emergent incubated the company. (Link)

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Emergent Digest

News and views from the Emergent team

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Fund 2

We closed our second fund a few months back at over $76M. This gives us more fuel to continue backing the best cross-geography entrepreneurs in Intelligent Software at seed and pre-seed stages. Entrepreneurs who are on a trajectory of personal growth. Those who are fired up to build large, consequential businesses through various business cycles.

Among the best seed investors

Business Insider recognized Emergent Ventures among the top seed investors in the US (link).

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Portfolio Features

Latest in the world of Intelligent Enterprise Software, from the lens of Emergent portfolio entrepreneurs

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Intelligent, not just automated - In this article, SupportLogic shares thoughts about how B2B companies can leverage AI to offer better, faster support to their customers, with higher efficiency. SupportLogic previously announced 230% year-over-year revenue growth, with nearly 112M customer interactions analyzed and 8.5M sentiment signals extracted. (Link)

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Improved observability in Snowflake environments – Snowflake adoption has rapidly risen in recent years as part of a wave of multi-tenant cloud databases. Acceldata announced an integration with Snowflake and writes about how to generate deeper insights, improve observability, and control costs granularly in a Snowflake environment. (Link)

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Saving the seas - Newday Impact launched Ocean Health focused ETF (NYSE: AHOY). Its portfolio includes 80% of companies that are working to divert ocean-bound plastic waste, support sustainable fisheries, and control ocean acidification. Doug Heske of Newday discussed with Yahoo Finance in an interview. (Link)

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Predictable pipeline generation with machine learning - B2B companies are often constrained by how many prospects they can move quickly from the top of the funnel into their sales process. BambooBox wrote about how revenue teams can leverage buyer intent and engagement data intelligently to improve the quality of their pipeline and make their marketing and sales efforts more efficient. (Link)

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Hiring efficiently and effectively with AI - Talview shared trends in the hiring space, featuring how AI can help make the hiring process shorter, improve the candidate experience and achieve DEI goals. (Link)

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Global entertainment in the making - Vitrina’s global supply-chain search for the Entertainment industry helps industry participants narrow down and engage with the right partners, vendors, and customers. Vitrina has now expanded its coverage to over 50 top markets globally. (Link)

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100x Entrepreneur - Satej Sirur of Rocketium talked about the world of creative management and the simple yet effective hack of deeply knowing one’s users. (Link)

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Automation Solution of the year - At the Customer Contact Week (CCW) event in Las Vegas, Observe.ai was named Automation Solution of the Year, ahead of eight other established vendors. (Link)

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Shifting security left – The Test Automation Forum showcased Deepfactor, which enables engineering teams to discover, prioritize, and remediate application security risks early in the cycle. (Link)

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