The firm describes the vehicle as a “hybrid fund” as it will make commitments to venture and seed investors, back rounds for individual startups, and buy stakes in early-stage funds from existing shareholders.

Although Industry Ventures is best known as a secondary investor, it’s been pursuing this hybrid strategy since 2009. In that time, managing director Roland Reynolds, has seen his share of market cycles for emerging managers looking to raise new funds.

The current climate, he observed, is sharply different than it was a couple years ago.

“This is a much more challenging fundraising environment,” Reynolds said. “To get a flat or slightly larger fund size is a big win.”

AI pitches in

But while investment capital is tighter, Reynolds said he’s optimistic that those who do manage to close funds will go on to post stronger-than-usual returns. That’s partly due to the rise of AI-enabled business models, although Industry Ventures has been pretty active across a variety of tech sectors.

Recent investments range from robotics to enterprise software. In April, for instance, Industry Ventures participated in a $100 million Series B for Collaborative Robotics, a developer of workplace robots. The firm also led a $50 million Series B for Coalesce Automation, which develops data management software.

Going forward, the firm plans to allocate about 40% of the new fund into emerging managers of early-stage funds that are typically $250 million or less. Another 40% will go to direct investments in startups, usually at around Series B.

The remaining 20% of the capital will go to buy stakes in mostly early-stage funds from institutional investors such as  endowments and family offices who are seeking liquidity or to exit the asset class. Industry Ventures typically buys stakes in venture and seed funds that started investing between three and five years ago, with the expectation that it will likely take many more years to produce sizable exits.

With the latest fundraise, the firm now has more than $8 billion in committed capital under management. Of that, $2.3 billion is earmarked for early-stage hybrid funds that focus on U.S. companies and managers.

Illustration: Dom Guzman

That, at least, was the trend following the onset of the COVID-19 pandemic. Total annual U.S. mental health spending, estimated at around $280 billion in 2020, rose sharply in subsequent years across age groups, boosted in part by the rise of telehealth platforms.

These days, more than one-fifth of American adults receive mental health treatment in a given year, per a recent federal government estimate. Much of that comes in the form of one-on-one therapy.

Founders and investors in the space have taken notice. Funding to mental health-focused startups surged beginning in 2020, with large rounds going to companies developing telehealth offerings, AI-enabled platforms and services targeted to specific groups, such as teenagers or the elderly.

Yes, investment in mental health startups has tapered off since the 2021 peak. Nonetheless, we’re still seeing steady deal flow and big rounds getting done, as evidenced in the chart below:

Startups focus on covered care

One unifying theme for the largest investments this year is an emphasis on providing mental health care that is covered by insurance.

This was a core talking point for New York-based Talkiatry, a psychiatric care startup that in mid June picked up $130 million in the largest mental health financing this year. The round consisted of a combination of Series C equity financing led by Andreessen Horowitz and debt financing from Banc of California.

In its funding announcement, Talkiatry noted that it works in-network with providers that extend coverage to a majority of privately insured Americans. The startup, as its name implies, also focuses on connecting patients with psychiatrists who are able to both provide therapy and prescribe medications when needed.

New York-based Grow Therapy, which landed $88 million in a Sequoia Capital-led Series C this spring, also pitches itself as a provider of covered mental health care. The startup offers an online platform to match people with therapists who work with their insurance plans.

Meanwhile, Brightside Health, which closed on a $33 million Series C in March, markets its mental health offering as “affordable help, with or without insurance.” The San Francisco-based company provides online therapy for anxiety and depression, works with most major insurers, and also offers fixed monthly pricing for those who self-pay.

The right match

Investors are also backing good-sized rounds for startups honing screening tools and targeted services to match people with therapists best-suited to their needs.

Among these is San Francisco-based Two Chairs, which offers a platform run with its proprietary algorithm to help match the  right therapist with a patient. The company closed this spring on a $72 million Series C round that was a mix of debt and equity.

Boston-based InStride Health, which secured $30 million in Series B funding in March, is more narrowly focused. The 3-year-old company offers outpatient care for pediatric anxiety, considered the most common mental health disorder among kids and teens.

Backpack Healthcare closed a $14 million Series A in May and is also focused on pediatric mental health. The startup has a particular focus on extending mental health care to children and families covered by Medicaid, who have previously faced limited options.

What not to do

While recently funded startups hope to set an example of the right approach to mental health care, they can turn to predecessors for a lesson on how to do it wrong.

For this, they can look to Done, a seed-backed telemedicine startup whose CEO and clinical president were arrested last month for an alleged fraud scheme involving the drug Adderall.

Founded in 2019, Done describes itself as an online platform specializing in psychiatric care for ADHD, or attention deficit hyperactivity disorder. Per the U.S. Department of Justice, the company “exploited the COVID-19 pandemic to develop and carry out a $100 million scheme to defraud taxpayers and provide easy access to Adderall and other stimulants for no legitimate medical purpose.” (Done has said it disagrees with the charges.)

A couple years earlier, another funded startup, Cerebral, came under investigation over charges that it prescribed Adderall and Ritalin for ADHD without properly screening patients. The company was also recently fined $7 million over its privacy practices. Cerebral raised over $460 million in 2020 and 2021 from SoftBank and others, but has not secured fresh financing since.

Therapy demand still drives deals

Even with a mixed track record in mental health investing, venture backers still see opportunity in the space as demand for therapy and treatment remains strong, with continued high levels of unmet needs.

For now, focus areas of the most recently funded startups, which include extending covered care and targeting underserved populations, look like a sensible approach. We’ll stay tuned to see how effectively they continue to scale.

Related Crunchbase Pro list:

• US Mental Health Startup Funding

Illustration: Dom Guzman

The company raised $315 million in the offering, setting an initial valuation of around $2.67 billion. Shares are trading on Nasdaq under the symbol WBTN.

Although headquartered in Los Angeles, Webtoon has its roots in Korea. It’s majority-owned by South Korea’s Naver, which had a 71% pre-IPO stake, and Japan’s LY Corp., with a 29% stake.

Webtoon was launched in Korea nearly 20 years ago as the brainchild of its CEO, Junkoo Kim, then a search engineer at Naver. The founding vision was to create a platform for comic creators to reach a wider global audience.

Since then, Webtoon’s well-known format displaying art and text in a single continuous, vertical scroll has caught on in a big way. The company estimates that half of South Koreans visit the platform each month. It also has broad global reach, with an estimated 170 million monthly active users each month across more than 150 countries.

Between 2017 and 2023 it has paid out over $2.8 billion to creators who publish on its platform, Webtoon says. The average professional creator, it adds, is earning $48,000 a year and the top 100 are earning $1 million.

In the first quarter of this year, Webtoon had revenue of $327 million and net income of $6 million. In all of 2023, meanwhile, Webtoon had revenue of $1.28 billion, and posted a net loss of $145 million.

Illustration: Dom Guzman

Developers of workplace robots, robotic surgery technologies, and even humanoid models have all raised large rounds in the past six months. The artificial intelligence funding boom has also helped boost the space, with investors backing big deals at the intersection of AI and robotics.

Altogether, robotics startups have pulled in over $4.2 billion in seed through growth-stage financing this year, per Crunchbase data. That puts funding on track to exceed last year’s muted levels, albeit still below its cyclical peak, as illustrated below.

Workplace robots

Where’s the money going? Per Crunchbase data, workplace robotics still accounts for the largest number of rounds, with startups looking to offset the need for human labor for tasks like delivering meals, pulling weeds and moving stuff in warehouses.

Among the largest recipients in this vein is San Francisco-based Bright Machines, a developer of software and robotics technology for factory manufacturing. The company raised $106 million in Series C funding, plus $20 million in debt, in a BlackRock-led financing announced Tuesday.

Another big round went to Silicon Valley-based Collaborative Robotics, which landed a $100 million General Catalyst-led Series B this spring. Its business model centers on building “cobots” or robots that can work alongside humans doing tasks like carrying boxes and moving industrial carts.

On the agtech front, Seattle-based Carbon Robotics has harvested a total of $85 million to date, with its latest funding raised in a May Series C. Its primary offering is an AI-enabled weeding robot that provides farmers a less labor-intensive way to reduce reliance on herbicides.

Redwood City, California-based Bear Robotics, meanwhile, snagged $60 million in an LG Electronics-led financing in March. The company makes a mobile robot capable of carrying trays or packages, which it markets to customers in hospitality, assisted living, warehouse operations and other industries.

Here come the humanoids

We’re also seeing large investments in startups developing humanoid robots — a staple of science fiction that has yet to penetrate everyday reality.

Sunnyvale, California-based Figure, which describes itself as an “AI robotics company bringing a general purpose humanoid to life,” was the biggest draw here, snapping up $675 million in a February Series B. It drew heavy interest from corporate investors, with Nvidia, Microsoft and Amazon among its backers.

1X, a startup with dual headquarters in Norway and Silicon Valley, picked up $98 million in January to further development of its initial humanoid models. This includes NEO, whose human-like body is engineered with muscle-like anatomy, and EVE, a robot which resembles a human but with wheels instead of feet.

Per 1X, the humanoid robot represents the most logical form factor for integrating advanced processing and AI more deeply into the physical world. A research note on its website postulates that: “At its core, our world is designed by and for humans, which makes the human form the most effective means of interfacing with it.”

By and large, it’s still early days envisioning what these AI-powered humanoids might actually accomplish. The startup envisions them making contributions in industries including agriculture, construction and healthcare, with a particular focus on taking on dangerous and repetitive jobs.

Surgical robotics

Surgical robotics has also been a major area for robot-related startup investment over the years, and 2024 is no exception.

The biggest round went to MMI, a developer of technology for robotic-assisted microsurgical procedures that raised $110 million in a February Series C led by Fidelity. The company says its technology lets surgeons replicate movements of the human hand at the micro scale and can expand treatment options for patients needing soft tissue, open surgical procedures.

Most recently, Shanghai-based Ronovo Surgical raised $44 million in a Series B financing announced this month. The company develops a robotic-assisted system for laparoscopic surgeries.

Easy to appeal, harder to prove

Unlike many other startup sectors, founders of robotics companies usually don’t have trouble selling us on why we would want their products. After all, who wouldn’t want a robot to do jobs that are boring, backbreaking, hazardous and time-consuming for humans?

Moreover, as we face lower global population growth rates — particularly in developed economies — there won’t necessarily be enough people willing and able to do the work required to provide and maintain the level of services and infrastructure to which we’re accustomed.

The challenge is all about execution. Will today’s funded startups be capable of delivering on their visions with robotics technologies that are capable in their assigned tasks, scalable and affordable?

It’d certainly be nice to answer in the affirmative. Startup history, however, tells us that for every huge success story, there are usually many more that don’t make it.

Related Crunchbase Pro list:

Further reading:

• Collaborative Robotics Locks Up $100M, Latest Robot Startup To Raise Big
• The Week’s 10 Biggest Funding Rounds: Figure And Ascend Elements Climb To The Top

Illustration: Dom Guzman

Clarification: This story has changed since its original publication.

The investment heyday for the space roughly coincided with the peak of the bull market.  Cultivated meat companies pulled in over $1.6 billion in 2021 and 2022, per Crunchbase analysis. Leading names like Upside Foods, Believer Meats and Good Meat consumed over a billion between them.

That generous funding streak coincided with a period of heavy investment in plant-based meat and dairy substitutes. The heaviest private funding recipient, fake meat unicorn Impossible Foods, raised nearly $2 billion. And rival Beyond Meat had a roughly two-year run as a stock market darling following its 2019 IPO.

But like most startup sectors, the alt protein space isn’t attracting investors like it used to. While funding hasn’t dried up entirely, it has fallen considerably.

Big rounds decline

These days we’re no longer seeing rounds in the multiple hundreds of millions for the space.  More broadly, larger rounds have declined in both frequency and size for cellular meat and plant-based protein companies.

To illustrate, we charted financings of $20 million or more to companies in the alternative meat and dairy space from 2019 thru today:

This year, the biggest round by far went to Boulder, Colorado-based Meati, which creates cutlets and steaks from mycelium. It raised $100 million in a C-1 round led by Grosvenor Food & AgTech, bringing total funding since its inception in 2016 to nearly $375 million.

The next-largest financing went to Barcelona-based Heura Foods, a maker of plant-based meat and fish that picked up $40 million in a February Series B. Its product lineup includes vegan variants of popular items in Spanish cooking like ham and chorizo.

We also saw two good-sized rounds this past week. London-based This, a maker of plant-based chicken and pork substitutes, snapped up $25 million in Series C financing. And Somerville, Massachusetts-based Tender Food, which makes plant-based versions of meats like chicken cutlets and pulled pork, landed $11 million in a Series A round led by Rhapsody Venture Partners.

Notably, none of the largest funding rounds went to startups working on cultivated meat, or meat grown in a lab from animal cells. It’s tough to pinpoint a singular cause for a pullback, however, as startups in this space have faced a number of hurdles — including technical issues, questions around likely consumer adoption, and pushback from politicians and regulators.

Plus, it’s an expensive proposition to bring to market. One recent example that didn’t make it was San Francisco Bay Area-based SCiFi Foods, which closed shop after raising close to $40 million in known funding. The company had sought to combine plant-based and cultivated meat to make a more affordable burger alternative.

Option overload

Given the sheer number of funded alternative protein startups out there (yes, there are a lot of them), we can expect to see more struggle to secure follow-on funding and eventually shutter. Although this happens in most startup sectors, the excitement around alternative proteins means these failures will likely be higher profile than other industries.

Cultivated meat, in particular, appears to be bearing an outsized share of cutbacks. While it still may be a laudable goal, given the ethical and environmental issues around livestock farming, the economics won’t be easy.

Fortunately, even with a winnowing of the startup field, consumers in the mood for plant-based meats still have plentiful options to choose from, including mimicries of every major meat and seafood cuts, along with more processed favorites like lunch meat, bacon and sausage.

Further reading:

• Forecast: Plant-Based Meat Is Starting To Sour With Consumers
• Beef, Pork, Chicken, Fish: Where The Money Is Going In Alt Meat

Illustration: Dom Guzman

That was the unsurprising finding from our latest data dive regarding investment in startups innovating around the metaverse, virtual reality and augmented reality.

The space, which was significantly buzzier a few years ago, has apparently lost its cachet with VCs. Dwindling investment comes on the heels of disappointing adoption for the gear and leading metaverse platforms.

Even Apple’s U.S. introduction earlier this year of the Vision Pro headset, marketed as a “spatial computing” device, didn’t produce a notable turn in sentiment. Demand for the $3,500 device is reportedly cooling, with Apple said to have cut its shipment forecast.

Back in startupland, the investment climate seems downright chilly. Per Crunchbase data, 1 roughly $464 million this year has gone into seed- through growth-stage funding rounds for companies tied to AR, VR and the metaverse. That puts 2024 on track for the lowest funding total in years.

Most of the startups that raised the biggest financings during the peak funding of 2021 have not closed new rounds since then. This includes headset maker Magic Leap and augmented reality game developer Niantic.

This year, while activity is muted, some sizable financings are still getting done.

So far in 2024, the largest AR-related round went to Rokid, a maker of augmented reality glasses that raised $70 million in a January financing. Redwood City, California-based Rokid primarily markets its products for workplace and industrial use cases, but also has a consumer offering.

Another good-sized financing went to Beijing-based Xreal, a maker of mixed-reality glasses that  raised $60 million in a January round at a value of $1 billion. The company pitches itself as a lower-cost competitor to Meta’s Quest and Apple’s Vision Pro.

Fading buzzwords

In addition to lackluster uptake for virtual- and mixed-reality gear and platforms, another factor behind seemingly slower funding tallies may be that the buzzwords themselves have fallen out of favor.

A few years ago, describing oneself as a metaverse company might have helped spike interest from venture investors. Today that’s no longer the case. Startups prefer, for example, to emphasize their artificial intelligence focus. Even Apple studiously avoided using the term metaverse in promoting Vision Pro, opting instead to talk up the device’s spatial computing capability.

Should adoption of virtual and mixed reality devices accelerate, venture investors will likely give the space renewed attention — and bigger checks. But perhaps by then, the ambitious startups will be using different buzzwords, like AI-enabled video simulations or spatial computing environments.

Related Crunchbase Pro list:

So, when Bessemer calls its latest annual State of the Cloud report “a eulogy for the legacy cloud,” it warrants attention.

In its latest report, published Thursday, the firm makes the case that startups are moving out of what it describes as legacy SaaS business models and embracing a new paradigm: vertical AI. While this isn’t a death knell for the enterprise software companies that have been its bread-and-butter for years, it does mean they’ll have to evolve with the times.

“It is a big deal, particularly coming from Bessemer. I think it is reflective of just how big of a movement and paradigm shift this is,” said firm partner Sameer Dholakia, referring to the rise of large language models and AI-enabled tools that are reshaping the enterprise software landscape. “This is an extinction event for companies that are not on the early side of adoption.”

All about vertical AI

If cloud was the perennial buzzword of years’ past, this time Bessemer is pushing to popularize the concept of vertical AI as the next big thing. It defines this as applications that “target the high cost repetitive language-based tasks that dominate numerous verticals and large sectors of the economy.”

Bessemer, which cites over a dozen of its own portfolio companies as vertical AI exemplars, isn’t the only one highlighting the trend. Late last year, for instance Cowboy Ventures 1 published a Vertical AI Market Map, and Greylock listed standout startups in the space for healthcare, finance and professional services.

Per Dholakia, some of the most promising startups in vertical AI use cases are well beyond seed stage by now. Many secured initial funding well before the late 2022 launch of ChatGPT established the power of large language models for the masses.

While we’re probably at least a couple years away from seeing vertical AI IPOs at scale, Dholakia is already seeing early entrants shake up prevailing business models in the enterprise software space. One shift that AI is enabling, he said, is the propensity to charge customers based on work rather than number of users engaging the software.

“You’re seeing people price the delivery of their capability differently,” he said. “They’re solving a piece of work, and charging per work product.”

Dholakia cites legal tech AI portfolio company EvenUp as an example, with the firm currently able to charge personal injury lawyers for demand letters created with its offering.

Exits and valuations

While Bessemer is enthused about the promise of vertical AI offerings, the firm is also cognizant of the reality that startups in the space are mostly a ways from exit. Meanwhile, there remains a vast swathe of still-private, later-stage enterprise software companies formed before the all-about-AI era.

The backlog of not-yet-exited unicorns, in particular, is amassing amid a sluggish period for IPOs and large M&A deals involving private, venture-backed software companies. And with the traditionally languid summer IPO season upon us, the slow streak looks set to continue.

Dholakia, for his part, said he’s optimistic the offering pace will pick up, likely by next year. For the past couple years, he said, the software startups have held off going public, given the post-2021 market contraction, several quarters of subsequent belt-tightening, and pressure to update with AI capabilities.

As a result, there’s now a “once in a generation, maybe once in a lifetime backlog of companies” that are worthy of going public but are still private, he said.

Hopefully, soon we’ll see them making their way to market.

Related reading:

• The 49-Year Unicorn Backlog

Illustration: Dom Guzman

Rarely, however, does the top search result for their area of expertise link to the International Atomic Energy Agency.

In the area of radiopharmaceuticals, however, the agency turns out to be one of the more prolific publishers of reports and explainer pieces. Its involvement coincides with growing investment around these therapies, which use radioactive forms of chemical elements called radioisotopes to treat cancers and other medical conditions.

Last week, we saw both one of the larger funding rounds and one of the biggest M&A deal closings to date for the space.

On the funding front, Germany’s Isotope Technologies Munich closed on just over $200 million in an equity round led by Temasek Holdings.

Isotope Technologies said the money will go partly to prepare for a potential market launch of a treatment for a type of neuroendocrine tumor, which is currently in late-stage clinical trials. It  also plans to expand its manufacturing capabilities and pipeline of medical isotopes for cancer treatment.

On the M&A side, meanwhile, a subsidiary of AstraZeneca completed its purchase of Fusion Pharmaceuticals, a developer of oncology radiopharmaceuticals, for $2.1 billion plus up to $300 million in milestone payments. Hamilton, Ontario-based Fusion, founded in 2014, went public four years ago.

Growing pipeline of recently funded companies

Venture funding, meanwhile, continues to flow. Per Crunchbase data, at least 12 private companies focused on radiopharmaceuticals have raised venture or growth funding in the past two years. The companies in our sample set, posted below, have raised nearly $1.3 billion in funding to date.

It’s a relatively youthful list, with six of the companies on it founded less than four years ago. Across the whole list, meanwhile, a majority of funding also has come in the past couple of years.

A hot area for IPOs and acquisitions

Looking at valuations given to leading radiopharmaceuticals companies from public investors and large-cap acquirers, one can see why startup investors would be enthusiastic.

Fusion wasn’t the only multibillion-dollar radiopharmaceuticals M&A deal in recent months, nor was it even the largest. In February, Bristol-Myers Squibb completed its acquisition of Rayze Bio, a developer of radiopharmaceuticals for treating tumors, for $4.1 billion. San Diego-based Rayze had just gone public in September.

Of course, it’s not just the valuations that have attracted startup investors’ attention. We’re also seeing promising clinical trial results for treatments addressing some of humanity’s most intractable diseases.

Related Crunchbase Pro list:

• Radiopharmaceutical-Related Startups Funded In The Past Two Years

Illustration: Dom Guzman

So far in 2024, startups in the space have pulled in just over $1 billion in total funding, 1 per Crunchbase data. Consequently, investment in edtech is on track to hit its lowest total in years.

For a sense of how steeply funding has fallen, we charted out total annual investment and deal counts since 2019 below. As you can see, the education space is not showing signs of a rebound.

For U.S. investment, the pattern looks much the same. Investment is still far below where it was even before the 2021 market peak.

It’s not a great time for exits either. We haven’t seen a big IPO for a venture-backed edtech company in quite a while. Large acquisitions also haven’t been happening lately.

Not a growth problem

What gives? Clearly it’s not a demand problem. Across the world, more people than ever are receiving formal schooling.

Enrollment numbers continue to grow too, especially for higher education. The World Bank predicts the number of post-secondary students will rise from an estimated 220 million in 2021 to 380 million by 2030.

Nor is adoption of edtech waning. In coming years, edtech is expected to grow at a faster pace than the overall global education sector, per Morgan Stanley analysts, supported by increased internet access and the high scalability of edtech business models.

These aren’t small numbers either. Morgan Stanley projects global edtech spending to increase from $250 billion in 2022 to $620 billion in 2030.

Maybe an ROI problem

Despite all that growth, however, it’s been a while since we’ve seen a really big investment success story out of the edtech startup space.

The last time we saw a string of sizable IPOs was 2021, when venture-backed unicorns Duolingo, Coursera and Udemy went public. Since then, shares of language learning platform Duolingo have held up well. But Coursera, a higher-education course provider, and Udemy, a skills training marketplace, are well below their debut prices.

Investors also were clearly counting on more big outcomes in 2021, when funding to education (and venture investment overall) hit an all-time high. In 2021 and 2022, there were more than 60 education-related financings of $100 million or more, per Crunchbase data.

Of those, by far the largest funding recipient — and most famous edtech unicorn gone awry — is India’s BYJU’s. The online tutoring and educational content provider to millions had a reported $22 billion valuation at its 2022 peak.

Unfortunately, since then BYJU’s has served as more of a cautionary tale than an inspiring example. In the past few quarters, the company has faced charges of deceptive marketing practices, carried out large-scale layoffs, and filed for bankruptcy for its U.S. division, among other woes. It was recently valued at a reported $1 billion.

Other edtech unicorns haven’t secured new funding in a while. Bangalore-based online learning app provider Unacademy, for example, raised over $800 million between 2017 and 2021. But the company, which has had multiple rounds of job cuts since then, has not closed on a new round in nearly three years.

Denver-based Guild, which works with employers to provide upskilling and higher-education offerings to workers, has also carried out large layoffs. The company has raised over $640 million to date, securing its last round two years ago.

One bit of positive news came this year from Vienna-based online tutoring marketplace GoStudent, which reportedly is now profitable. The startup previously raised over $780 million in equity funding, and carried out multiple rounds of layoffs in recent quarters.

So, who is getting funded?

But, that’s enough about who’s not getting funded lately. More pertinent for startups in the space is who has been managing to secure fresh financing in a challenging climate.

We used Crunchbase data to put together a list of seven intriguing startups that raised financings of $20 million or more this year.

Up from here?

Optimists could make a case that education and edtech startup funding should see upward movement from here. After all, the problems edtech startups set out to solve haven’t gone away.

As AI capabilities advance, we’d also expect to see more investment in startups that leverage the technology for education (in use cases other than cheating.) And even as several edtech unicorns have seen their fortunes falter, there’s nothing clearly stopping a new generation from emerging.

For now, though, edtech investment levels remain far from recovery territory.

Related Crunchbase Pro list:

• Edtech And Education-Related Startup Funding

Illustration: Dom Guzman

Startups and their investors are lining up to fill that demand. Since last year, companies working on charging stations and associated technologies have raised billions in seed- through growth-stage financing.

There’s nothing mysterious about the driving force behind the funding, observed Loren McDonald, CEO of research firm EVAdoption. We’re still in the early stages of a massive shift from refueling with gas to recharging with electricity. And since electricity is a lot more ubiquitous than giant tanks of gasoline, there’s far more potential territory to cover.

“Fundamentally, everywhere there’s electricity we can add chargers,” said McDonald. He’s fond of the saying “charging is parking,” given that “literally every time a car sits it can be charged.”

Where startups see a competitive edge

There’s no particular geography or business model that dominates funding for EV charging-related startups.

Good-sized rounds are going to companies with a variety of focus areas, including installing charging stations, operating charger networks, developing software to optimize usage, and helping EV owners get power from green sources. They’re also spread across every inhabited continent.

Using Crunchbase data, we aggregated a sample set of 65 private companies funded in 2023 and 2024 with a focus on EV charging. Collectively, they’ve raised over $4.9 billion in equity funding to date, including both venture and grant funding.

Where’s capital going?

Below, we list 10 of the most heavily funded to illustrate a cross section of business models that are attracting investor interest.

The top investment recipients are building and operating EV charging networks. It’s an expensive undertaking, of course, which helps explain their high fundraising.

On top is Paris-based Electra, which operates a network of bookable charging spots, commonly in commercial locations. The 3-year-old company pulled in $330 million in a January Series B, bringing its total funding to $550 million.

Reston, Virginia-based Electrify America, which operates a North American public fast-charging network, has also been a heavy fundraiser, although its primary financing of $450 million was back in 2022. The company is planning to complete a major expansion of its network this year.

Meanwhile, 10-year-old FreeWire Technologies, based in Newark, California, has raised over $259 million in known financing to date to continue investing in its energy management technology and network of ultra-fast charging stations.

Seed and early-stage active too

The seed and early-stage investment scene around EV charging is also pretty lively.

To illustrate, we put together a sample list of 13 companies that raised seed or Series A financing this year or last. Rather than build and operate large charging networks, these upstarts are mainly focused on smaller niches.

Brooklyn-based Voltpost, for instance, is working on retrofitting lampposts to function as electric vehicle charging platforms. Orange Charger, out of Silicon Valley, is focused on charging infrastructure for apartment complexes. And ChargeLab, based in Toronto, is working on an operating system and app for EV chargers.

For every company that gets funded, meanwhile, there are a plethora of other, often newer startups seeking to make their fortune around some niche of the EV charging market, McDonald observed. Areas of particular interest include charging for multifamily housing, tools to manage power demand in neighborhoods with high EV adoption, and software to help optimize charging at times when electricity costs are lower.

It helps that there are plenty of subsectors to choose from, McDonald added, noting that “It’s a massive opportunity that also requires different approaches to the market for almost every use case.”

EVs on the rise, even as public investors remain wary

Notably, venture-backed companies in the EV charging sector that went public and aren’t named Tesla have mostly not performed so well.

EVGo, ChargePoint, Wallbox and other venture-backed charging companies that went public during the SPAC and IPO boom of 2020 to mid-2022 are mostly trading at a tiny fraction of their former highs.

Some declines may be attributable to a shift in investor mindset, as the go-go optimism around the 2021 market peak took a bearish turn. However, some of the criticism is also specifically directed at charging businesses, including technical problems as well as not-so-impressive usage rates at many charging stations.

Looking ahead, the hope is that as EV adoption grows, under-utilization issues will take care of themselves. Among EV boosters, there’s little doubt that they’ll ultimately displace gas-powered cars. And when they do, startups want to make sure there will be no shortage of charging places.

Related Crunchbase Pro lists:

• EV Charging-Related Private Companies Funded In 2023 And 2024
• Sample List Of Heavily-Funded EV Charging-Related Startups
• Sample Of EV Charging-Related Seed- And Series A-Funded Startups

Illustration: Dom Guzman