High-Value Startups Funding - May 2023
Q2 2023 continues to witness extremely positive investment funding through May 2023 as well. After a slow Q1 2023, April started off with a relatively positive outlook. May 2023 saw a significant rise in high-value startup funding (More than $50m in funding) reaching nearly $31.3bn for the month. Overall, 160 startups have witnessed high-value funding in the month in question. The U.S has been a primary leader in the funding provided mainly focused on healthcare and pharmaceutical startups for the period accounting for over half the total high-value funding in the month of May 2023. South Korea, Germany and U.K witnessed a massive increase in the month as the telecom/software space as well as the semiconductor space showcased significant funding.
High-Value Startup Funding, By Region, May 2023 ($M and Number of Startups Funded)
Source: Crunchbase
In May 2023, as well as across Q2 2023, the startup funding scenario has shown a massive recovery across various funding types. However, Debt Financing has witnessed a massive increase for startups in May 2023 accounting for 50.5% of all startup funding in the month. Venture Global LNG alone accounted for 14.5% of the complete high value startup funding in May 2023 with a debt financing of $4.5bn. This rise in debt financing has been a continuous trend being driven by a proliferation of alternative financing options such as venture debt, crowdfunding, and peer-to-peer lending. These options have provided startups with more choices to raise capital and have contributed to the increase in debt financing. High Value Private Equity funding however fell 25% to $5.6bn in May 2023. Series E and Series F Funding were also very limited in the month. However, Series D Funding was very positive with a 242% increase over the previous month to $2.7bn.
High-Value Startup Funding, By Funding Type, May 2023 ($M and Number of Startups Funded)
Source: Crunchbase
May 2023 witnessed a renewed vigor in the automotive industry funding as Electric Vehicles and Autonomous vehicles drove this increase. Automotive companies witnessed a 384% increase in funding in May over April. The Telecom and software sectors also saw a 313% rise in May Fiber ISPs such as BrightSpeed and IQ Fiber achieved significant private equity funding. Retail companies, led by Shein, also saw a renewed interest in funding after a slowdown in Q1 2023 through April. The chemical industry also witnessed an increase in funding led by companies such as SK IE Technology and Yunnan National Titanium.
High-Value Startup Funding, By Industry, May 2023 ($M and Number of Startups Funded)
Source: Crunchbase
10 Key High-Value Startup Fundings
Shein
Shein, the Chinese online fashion retailer, raised approximately $2 billion in a forthcoming funding round in May, despite a significant 33% decline in valuation to $64 billion. Among the participants in this funding round are Mubadala, the sovereign wealth fund of the United Arab Emirates, along with existing investors General Atlantic (GA), a private equity firm, Sequoia Capital China, and Tiger Global Management. If successful, this flotation would rank among the largest worldwide in 2023 and would serve as a test for investor interest in Chinese companies within the context of volatile capital markets and geopolitical tensions. The company is also aiming for a listing in the United States during the second half of this year.
SK on
In its endeavor to expand its presence in the rapidly growing electric vehicle (EV) market, SK On, a South Korean electric vehicle battery manufacturer, has secured $944 million in funding. This funding will enable SK On, a subsidiary of SK Innovation, to enhance its battery manufacturing business, including the expansion of production facilities in international markets. A consortium comprising financial investors from the United States and the Middle East, led by MBK Partners, a private equity firm based in Korea, will provide $800 million. The remaining $144 million will come from SNB Capital, the investment banking arm of Saudi National Bank. These investment deals are expected to bolster the financial stability of the battery maker and lay the groundwork for its planned stock market debut, projected to take place no later than 2026.
Golden West Food Group
Golden West Food Group Inc., a renowned manufacturer and distributor of high-quality food products, successfully finalized a refinancing transaction amounting to $475 million. The transaction encompasses a $355 million revolving credit facility, a $45 million term loan, and a $75 million accordion feature. This strategic move empowers the company to venture into new markets and leverage long-term growth prospects. J.P. Morgan and Wells Fargo Bank acted as Joint Lead Arrangers in this transaction, with J.P. Morgan also assuming the role of Administrative Agent.
Anthropic
Anthropic, a prominent startup specializing in generative AI and co-founded by former members of OpenAI, has successfully raised $450 million in a Series C funding round. Spark Capital led the funding round, while notable tech giants such as Google, Salesforce, and Zoom, joined the financing as participants. Additional contributions came from Sound Ventures, Menlo Ventures, and undisclosed venture capital entities. The strong participation from these industry leaders signifies their belief in the potential of Anthropic's AI technology, which excels in various conversational and text processing tasks. Zoom recently formed a partnership with Anthropic to develop AI products aimed at enhancing customer experiences in terms of reliability, productivity, and safety. This collaboration follows a similar alliance between Anthropic and Google. With a customer base spanning multiple industries, including healthcare, HR, and education, Anthropic has established itself as a trusted provider of AI solutions.
ElevateBio
ElevateBio, a company driven by technology and focused on enabling the development of life-altering cell and gene therapies, announced the successful closure of its Series D financing, raising a total of $401 million. The financing round was led by the AyurMaya Capital Management Fund, managed by Matrix Capital Management, and was joined by a group of esteemed new and existing investors. Noteworthy additions to ElevateBio's syndicate include Woodline, Lee Family Office and R&D partner Novo Nordisk. Alongside them, existing investors such as Matrix Capital Management, The Invus Group, Emerson Collective, SoftBank Vision Fund 2, Fidelity Management & Research Company, MPM Capital, F2 Ventures, Redmile Group, EcoR1 Capital, Samsara BioCapital, Surveyor Capital, EDBI, Vertex Ventures, and iTochu also joined in. The proceeds from this financing round will be utilized to further advance ElevateBio's technology platforms, which encompass Life Edit gene editing, induced pluripotent stem cells (iPSCs), RNA, cell, protein, and vector engineering. Additionally, the funds will contribute to the growth of BaseCamp, the company's comprehensive genetic medicine business specializing in current Good Manufacturing Practice (cGMP) manufacturing and process development.
ReNAgade Therapeutics
ReNAgade Therapeutics, a worldwide company dedicated to harnessing the boundless possibilities of RNA medicines in disease correction, has revealed the completion of a Series A financing round amounting to $300 million. The funding round was primarily led by MPM BioImpact and F2 Ventures. ReNAgade has developed a comprehensive and synergistic platform that integrates proprietary delivery technologies, such as innovative lipid nanoparticles (LNPs), with a wide range of coding, editing, and gene insertion tools, all within an all-RNA system. This platform enables the company to unlock the transformative potential of RNA medicines in treating various diseases.
Vattenfall
Stockholm-based energy company Vattenfall announced the successful issuance of a $313 million green fixed-rate hybrid bond. The proceeds from this bond will be directed towards funding green initiatives, particularly in the field of renewable energy. This marks Vattenfall's first hybrid bond issuance since June 2021 and carries a maturity period of 60.25 years, with the first reset date occurring after 5.25 years. The demand for the bond was strong, with orders totaling over $855 million. The coupon rate for the bond is set at 6.875%. The utilization of the proceeds aligns with the Green Financing Framework established in May 2022, with the designated investments falling under four qualified categories: renewable energy, electricity transmission and distribution, energy efficiency, and clean mobility.
Flink Food
The acquisition of quick commerce operator Flink by its competitor Getir has been called off due to the funding obtained by Flink. Flink is now slated to receive an additional $170 million in funding from investors. REWE Group is reported to be investing around $65 million in the company, while DoorDash is also increasing its stake.
NeoFusion
Neo Fusion, a nuclear fusion energy company, secured $142 million in funding from electric vehicle manufacturer Nio. The control of Neo Fusion is shared among various state-run energy companies and capital firms based in the eastern Chinese province of Anhui. Nio Capital and Nio together hold a 30% stake in the startup, while a consortium of state-owned firms, including Anhui Province Energy Co., Ltd, collectively holds a 50% stake in the company.
Jolt Energy
JOLT Energy, an e-mobility company known for its battery-buffered ultra-fast charging stations in urban areas, is embarking on a significant expansion. The Dublin and Munich-based company announced plans to install thousands of fast-charging stations in European and North American cities in the coming years. By expanding the infrastructure for ultra-fast charging, JOLT aims to expedite the transition to electric mobility and play a crucial role in addressing the climate crisis. JOLT intends to collaborate with cities as well as commercial establishments such as supermarkets, restaurants, and service stations to establish charging stations at high-traffic locations for the convenience of electric vehicle drivers.
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