Stoic’s Year in review 2023

Harikesh Pushpapathan
Stoic VC
Published in
8 min readDec 22, 2023


2023 has been another big year at Stoic. We first provide commentary on the venture market this year. We then dig into what we’ve been up to in the past 12 months.

Observations of the venture market

There were a few narratives that dominated markets in 2023, none more so than the reversion to the ‘new normal’ (that might not actually be that new). There’s a good argument that the decade leading into 2022 was actually the aberration and what we’re seeing now is business-as-usual. For deep tech (DT), it’s easy to be distracted by the GLP-1 and AI hype cycles that prevailed this year. But 2023 was largely encouraging, even if hurdle rates were adjusted across the board. My high level observations below.


  1. The ‘departure’ caused more economic damage than we thought but likely to be less pronounced for DT. The nature of development and enormous capital requirements, makes it difficult for markets to differentiate hype from real. The constant demand for these companies tends to provide added insulation against economic cycles. We do however expect more DT startups to go under in the next couple quarters, but this will be a much needed market clearing mechanism.
  2. 2023 may have been a great vintage for DT venture capital, but investors were hesitant. With loss of public market metrics and 2022 seared in their minds, investors were more selective than ever. Regardless, good opportunities continued to be financed.
  3. Life sciences unrattled by macroenvironment. Despite rate increases and geopolitical tensions, 2023 was a good year for early stage biotech. Loss of exclusivity (LOE) period continued to drive M&A. This had positive implications for upstream R&D.

Rehashing the aberration

The Zero-interest-rate-period (ZIRP) made risk capital very accessible and we saw the height of this decade long- run of risk on in 2021. Lower cost of equity, confidence in ‘handoffs’ of capital between rounds as well as public market demand created the ideal fundraising environment — in particular for capital intensive companies. DT companies that found ways to create FOMO by selling their grand visions (whether hype or not) or showing the slightest signals of market acceptance, raised millions. Most capitalised on this and rushed the public markets by SPAC or IPO to raise cheaper.

Reality of the past 18 months

When risk off capitulated markets in 2022, these same companies weren’t able to access risk capital so easily. The implosions of well funded DT companies have certainly rattled markets but its likely the economic damage will be less severe than anticipated. Largely due to the nature of DT development and higher barriers to capital.

In 2021, investors became complacent and less prudent with their capital. DT companies were encouraged to prioritize growth at all costs and accelerate development. But for companies taking on predominantly technical risk, growth is not a function of capital. DT companies have longer R&D lifecycle and demonstrate ‘value’ (initially) away from the market. This enables companies to secure large purchase orders or contracts with little to no revenue. Irregular and step-function like growth, therefore makes it difficult for the market to price companies which are hype and those that are real. In addition, it takes enormous amounts of capital (i.e much more expensive) to bring DT companies to market, therefore less likely that public DT is just hype alone. This dampens the effect of the economic damage, something we’re already seeing rattle low margin and highly cyclical sectors.

Zymergen was perceived as the golden child of genetic engineering. It collapsed in 2022 after raising more than a billion and went public at a ridiculous 200x revenue. The wasn’t to do with the technology, but rather its path of financing. Softbank was far too aggressive and reckless with their capital. This encouraged Zymergen to rush product development and IPO. Synbio performance has nonetheless continued to surge.

Companies like Zymergen which raised ‘bad’ money and took short cuts imploded. Whilst the top crop of companies which extended runway and readjusted G2M, became even more resilient and efficient. A good and necessary outcome for DT at large.

At the beginning of 2023, we likely saw the bottoming out of the market. Many US public deep tech companies had taken 30–40% haircuts by this stage. By the end of 2023, the story was different. This is illustrated below.

Deep tech index across three years. Important to note NVIDIA and ASML carrying the weight of the resurgence.

The last 6 months has seen listed DT rebound significantly, skewed largely by Big tech chasing AI and NVIDIA’s unreal performance. This hype cycle has attracted capital to early-stage startups innovating not only generative AI but across the entire value chain (advanced materials, semi-conductors and cybersecurity).

In addition, the initial recalibration in public markets (excluding the aforementioned) has created a unique investor’s market. The 2022–23 trickle down to private markets brought down early-stage multiples even with sunk-cost reactions from founders. With the death of “growth at all costs” and resurgence of fundamentals, most startups lost their leverage and struggled to prove up the same valuations. Leading to the swath of ‘at’ and ‘down’ rounds throughout 2023. The uniqueness of this investor’s market is that early-stage DT valuations will take a while to reprice to current public comps. Low levels of liquidity will extend this out further. If current trends hold, this divergence may have created one of the best vintages for DT in the last decade.


One of our key observations this year is that DT has remained largely unrattled — in contrast to its software cousins that’ve taken hits across the board. Biotech in particular has seen a resurgence at the early-stage.

Surge in median pre-money valuation in Biotech. Likely to have been influenced by Ozempic/Wegovy success.

Whilst biotech IPO’s have sunk since 2021, the current LOE period (2023–2030) has instead spurred M&A activity. Biopharma's exposed to sizeable potential revenue attrition, have been forced to recycle their assets with new acquisitions. What I’ve observed is that quality R&D continued this year, whilst pharma companies have been moved up the market — earlier than they ever have for high value assets. Its no secret that the success of Wegovy and Ozempic has attracted even more capital to upstream R&D in similar indications. There is a reported 50–60 comparable in the pipeline currently.

It’s worth mentioning that one of our own portfolio companies Kinoxis Therapeutics signed a licensing deal with Boehringer Ingelheim for c.300m. This wasn’t even for their lead candidate…

What we’ve been up to in 2023

Investment highlights

In 2023 we wrote our last couple follow on cheques in Fund I, with two yet to be announced. We have a new deal additionally in stealth — to be announced.

This year has been a year of fundraising and consolidation. We’ve been hard at work, and excited to share with you our progress in the new year.

Portfolio highlights

Top highlights from our portfolio.

Certa Therapeutics

  • US FDA granted Certa Therapeutics’ lead candidate FT011 Orphan Drug Designation for treatment of Systemic Sclerosis
  • Phase 2 trial success. From 30 randomized patients, 60% (18) had a clinically and statistically significant improvement in the treatment of Scleroderma. Statistical significance was found within a short timeframe (12 weeks).

ENA Respiratory

  • Received $4.38 million from US Department of Defence for ongoing R&D and scale-up of manufacturing for dry-powder formulation of lead candidate. This secures additional runway of 12 months.
  • Phase 2 trial success. From 123 randomized adults (19–53), lead candidate was found to significantly reduce the duration of infection in patients with influenza A virus. Demonstrated superior safety profile, with minimal at most mild side effects.


  • Secured $11m financing round led by Renew Group, world leader in contrast dye manufacturing.
  • Signed licensing agreement with Purdue research foundation (PRF) to use PRF’s patented FAP inhibitor in targeted radiotherapy for difficult cancers.

Kinoxis Therapeutics

  • Inked partnership deal with Boehringer Ingleheim on KNX200/300/400 lead compounds for US$181m milestone plus royalties
  • Kinoxis secured US grant funding for $3.6 million from the National Institute on Drug Abuse (NIDA) to support Phase 1 clinical development.


  • Successfully completed their phase Ib/IIa clinical trial for the treatment of diabetic retinopathy.


  • Awarded $3.7 million grant by the Australian Government’s Medical Research Future Fund.
  • Partnered with Roche Diagnostics Australia Pty Ltd to provide value-based healthcare for cardiac disease (CVD) patients.

Lenexa Medical

  • Rolled out at their first commercial pilots at Fairmont Aged Care and West Australia’s Valley View residence.


  • Secured a $1.05M bridge round with half the funding from GAAP (Global Agrifood Advancement Partnership). This funding will support BioScout’s entry into the North American market.
  • Installed first units for clients in Alberta and Saskatchewan in Canada.

Welcomed Safaa to the team

In August, we welcomed our new Investment Analyst Safaa Nasrallah to the team. Learn more about her here.

Partnership with Uniseed

Our partner

, Australia’s longest running venture fund, has recently welcomed onboard Monash university alongside a syndicate of 4 other NSW universities: University of Technology Sydney, University of Newcastle, Western Sydney University and Macquarie University effectively doubling the number of research partners in their fund.

Over the course of our 5 year partnership with Uniseed, we’ve helped fund the commercialisation of over 20 Life Science and Deeptech university start-ups. This announcement brings the total partnership to 9 universities and CSIRO, producing over 50% of Australia’s total R&D annually. Congratulations to Peter Devine and the Uniseed team on a significant milestone and for their continuous work to support and unlock the potential of Australian innovation.

Community Building

Opening DnM’s event

After launching DnM’s with our friends at Investible, Blackbird, Main Sequence and Jelix last year, we’ve had an even better year. We brought together almost 500 academics, investors and operators across 5 events.

We concluded the year with a private dinner with key folks in research and commercialization. We’re working on something big.

If you’re interested, be sure to follow us on twitter and stay tuned in the new year.

Continuing the vision of Fund I

Fund I has closed at $15m. This year we’ve been hard at work to continue the vision of our first fund. Exciting updates to come in the new year.

Thank you to our founders, researchers and investors that’ve contributed to another productive year. A special thanks to the team at Uniseed.


Stoic Venture Capital is a licensed venture capital fund manager (Stoic Venture Capital ILP) under the Venture Capital Act. The fund remains under the guidance and authority of the Australian Securities and Investments Commission (ASIC).

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services.