Atman Market Overview: A Time of Reassessment and Realignment — November 2023

Atman Capital
5 min readNov 15, 2023

Dear Limited Partners and Founders,

As we approach the end of another year in the early-stage venture landscape, it’s time to reflect on the shifts that have reshaped seed investing. This edition of our newsletter delves into the current state of the market and our perspectives on liquidity, adaptation, and sustainability.

The investment world has been on a constant roller coaster since COVID-19. The increase in global violence, combined with economic fluctuations, rising cost of capital, and macroeconomic factors, have driven us into a new era of investing that won’t look like the easy money period of 0% interest rates, with the American consumer’s sentiment declining and worries about the economy increasing.

Instead of claiming that we have reached a new bottom in the cycle, we have found a new, slower, normal in which further deterioration could still happen. The bid-ask spread for startups that need capital and investors willing to pay the last round’s price has yet to close. We expect many startups to fail over the next 18 months or be saved by M&A.

When funding is broken down by stage globally, we see that over the last 18 months, about $20–35B has been deployed globally in VC monthly, with the US representing ~50% of total global funding. Given the stagnation of total dollars, growth equity startups are the most impacted part of the funnel, where founders are choosing to raise only what is necessary, as investors, on average, are paying less than half of what they used to pay three years ago and desiring more ownership than before as we see an average of 14.9% ownership for growth rounds, while deal size has decreased by 62% of the 2021 peak.

It is also taking much longer for companies to raise new rounds of financing, on average. Today, a company takes about 1.46 years to raise an additional round, a 5-year high in the industry.

In the past, any company tackling a large market, growing top-line revenue at double-digit CAGR with a stellar team, could raise follow-on capital; if the growth was there, the market was willing to wait for the fundamentals at another time.

Liquidity is the lifeblood of any investment market. Improvements in liquidity conditions are necessary for a robust recovery and sustainable growth. This involves the availability of funds for follow-on and a conducive environment for exits, be it IPOs, acquisitions, or mergers. Today, the median public listing valuation is at a 10-year low, just north of $2B; Instacart and Klavyo’s offerings were short-lived glimpses of hope for a liquidity window that remains mostly shut.

The market dynamics we experienced from 2018 to 2022 were a unique convergence of low interest rates, abundant capital, and an unprecedented tech boom. Given the current macroeconomic environment and capital cost, we will unlikely see a similar scenario soon. This calls for a recalibration of expectations and strategies for investors and entrepreneurs.

At Atman, we remain committed to a strategic and thoughtful approach to investing while working with entrepreneurs who are connected to and thrive on this new reality. We are grateful for your continued trust and partnership.

Meet the Egregore: Alexandre Liuzzi, Co-Founder of Remessa Online

Who is Alexandre?

Alexandre’s journey in the financial world started in 2004, diving into Fund funds of and Credit Agencies. He quickly made his mark at Santander Asset Management as an analyst and later showcased his academic talents by graduating from the University of Chicago on the Dean’s List. His career took off at JP Morgan Chase in New York, where, as an Investment Banking Analyst, he specialized in Project Finance and M&A for Utilities companies. Moving to VELT Partners, Alexandre’s expertise in stock picking significantly grew the fund’s assets, leading to his partnership at the firm.

Transitioning from finance to fintech, Alexandre emerged as a tech entrepreneur in Latin America. In 2015, he founded a venture builder, playing a key role in launching over five startups, including Remessa Online. As co-founder and Chief Strategy Officer of Remessa Online, he led the company to become a leader in cross-border payments, culminating in its acquisition by EBANX for USD 230 million in 2021.

What is Remessa Online?

Imagine a world where borders don’t limit your business, work, or leisure opportunities. That’s the world Remessa Online is building. As a leading fintech in Brazil, we’ve revolutionized international transfers for over 350,000 customers in the last five years.

We’re not just a service; we’re an enabler. We help individuals and companies forge global business relationships, invest internationally, and realize dreams like studying or living abroad. Our commitment to innovation, transparency, and security shines through our cutting-edge technology. We’re tackling challenges head-on, from advanced digital record analysis to combating money laundering and ensuring secure foreign-exchange transactions.

How much capital have you raised so far?

For Remessa Online, ~$25M and ~$10M for other investments I lead via my fund.

How many companies have you started? Five startups and an investment firm

What industries do you believe you have deep expertise in? Marketplaces, investments, and fintech

What are you most excited about right now? Most of my readings and studies are focused on self-improvement through increased consciousness, spiritual work, nutrition, and exercise. We are on the verge of mass transforming our society as we know it. Secondly, but equally important, this process is also focused on becoming a better father to my son, so I am very excited about spending quality time with him. Thirdly, AI in general and investment opportunities.

What has been one of your biggest lessons so far in business? Nothing new: Having the right people early on changes everything. Sales/distribution is far more important than product. Things change faster than people can, so focus on highly adaptable people.

What book(s) have changed/shaped your life?

Long list varying from New World — by Eckhart Tole to The Art of Living Dangerously by Osho, Stealing Fire and Discipline Equals Freedom — by Jocko Williams

If you could have dinner with anyone, dead or alive, who would it be with and why?

I would love to eat with Jesus Christ — his teachings survived more than 2000 years and positively impacted billions of people despite the distortions of organized religion.

What do you believe to be true that you cannot prove? “God,” aliens, and our existence in multiple plans simultaneously