Gm. Average rent in Manhattan crossed the $5,000 threshold for the first time ever in June according to a report from brokerage firm Douglas Elliman.

Pour one $7 oat milk latte out for all our NYC-based readers out there.

FRESH POWDER

Looking at three funds that recently topped up their coffers.

Startup to watch: Ever think, “Man, I wish I could tune into this zoom meeting with a bored ape as my head?” No? Well, don’t tell that to Hologram, a company that makes blockchain-based avatars that you can use during video calls. The idea is to make virtual avatars portable across mediums, a key aspect of an interconnected metaverse becoming a reality. Hologram just raised a $6.5 million seed round to make it happen. (More here)

FUNDRAISING

VCs are hoarding cash

As you all know, we start off this newsletter each day by sharing three funds that recently topped off their coffers. It’s been the easiest section to write because there’s been no shortage of funds raising fresh powder. In fact, per PitchBook data, the amount of venture capital raised but not disbursed reached $290 billion by the end of Q2, up from $198 billion in 2020.

Why so much fresh powder?

After a record $128 billion was raised by VC funds last year, investors were spraying money around like a yet-to-be-potty-trained golden retriever puppy. Over 17,000 VC deals closed in the US as a result, per Pitchbook data, which was also a record.

The frantic pace of dealmaking in 2020 was neccesary in order to get into the best rounds.

• Tiger Global famously took just three days from initial conversions to offer healthcare startup Innovacce a signed term sheet last year.

Now that the pace of deals has slowed, investors are taking a closer look at the companies they’re writing checks into. Due diligence was a ghost of past-fundraising cycles. But now…

It’s back in style

Most of the dry powder sitting around is concentrated in mega-funds of $500 million or larger. The reason for that, as TechCrunch’s Alex Wilhelm notes, is that the pace of mega-deals is slowing as funds grow more thoughtful about the deals they enter. Fewer massive funding rounds = more capital sitting around untouched.

Plus, the fundraising bonanza of last year means lots of startups are sitting on valuations that no longer make sense in the current environment. They need cash, but VCs aren’t willing to part with it given their bloated valuations.

Bottom line: It’s sort of a rock and a hard place situation for a lot of companies. They need cash, and VCs have money, but neither side likes the valuation the other is offering.

DELIVERY

Checking in on electric vehicle delivery

On Tuesday, Walmart extended struggling electric vehicle maker Canoo a lifeline by signing a purchase agreement for up to 10,000 electric vans…but yesterday we learned that the agreement comes with some strings attached.

• The strings: Canoo is not allowed to sell its vehicles to Amazon.

The Walmart deal is not exclusive meaning Canoo can sell to any other company as long as it's not the retailer-that-shall-not-be-named. Amazon might not care. It has a preexisting deal with Rivian for 100,000 vehicles, though the once high-flying EV maker has struggled to meet production targets this year.

Zoom out: Despite companies like Amazon and Uber pledging to revolutionize the last mile movement of goods, nothing much has materialized in recent months. But the space is heating back up: yesterday, the drone delivery arm of Alphabet, Wing, unveiled a new prototype aircraft built to handle bigger payloads.

QUICK HITS

Seed Round

Stat: The winds are a changin' in the app economy. For the first time ever, US consumer spending in non-game mobile apps surpassed spending in mobile games per a Sensor Tower report. Driven by strong quarters from YouTube, HBO Max, TikTok, and Tinder, non-games overtook games in May and continued the trend into June. However, overall US app store spending actually declined in Q2 following the huge spike in sales generated by the pandemic.

Story we’re watching: You’ve heard of MMORPGs when it comes to video games, but have you ever heard of MILEs? That’s what game maker GenVid is calling its latest Walking Dead project, a massively interactive live event (MILE) that is debuting on Facebook this week. The key twist is that “everyone is playing and influencing the game collectively” Stephen Totilo of Axios Gaming writes. Players earn points that they can use to vote on narrative decisions that influence the storyline of the game. Can’t wait till TikTok finds out about it and somehow mobilizes to sabotage the plot.

Rabbit hole: Why we don’t have a strategy (The Beautiful Mess)

WHAT ELSE IS GOING ON

• Celsius Network filed for bankruptcy to “stabilize its business and consummate a comprehensive restructuring transaction.”

• Nintendo acquired a CG animation studio as it gears up to start releasing animated movies based on its massive backlog of IP.

• Playboy plans to open a virtual mansion in the metaverse.

• OpenSea laid off 20% of its staff as the crypto winter deepens.

GUESSTIMATE

The YTD CPI data for June came in at 9.1%. That’s the highest inflation has been in the US since 1981.

Speaking of 1981, what was the average cost of a gallon of milk that year?

FUNDRAISING FRIDAY

Buying businesses is tough. This thread breaks down the whole process from finding the right company to negotiation and operations.

LAYOFFS TRACKER

Notable layoffs this week

OpenSea: 40 people (20%)

Tonal: 262 people (35%)

Fabric: 120 people (40%)

Zoom out: The amount of July layoffs jumped by 10,000 over the last week.

FOUNDERS CORNER

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GUESSTIMATE ANSWER

A gallon of milk cost on average $1.81 in 1981, but fell all the way to $1.05 in 1988.