This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here.

It was a huge week for startups raising big. A company had to raise nine figures to make the list this week and five raised $200 million or more. It’s unlikely the short week next week will see these kinds of rounds, so don’t expect the same type of dollar figures in the next seven days.

1. Sila Nanotechnologies, $375M battery: A next-generation battery materials company led the way this week with a huge round. Alameda, California-based Sila, a next-generation battery materials company, announced it raised a $375 million Series G led by existing investors Sutter Hill Ventures and funds and accounts advised by T. Rowe Price Associates. The new cash will help the  company finish construction of its Moses Lake, Washington, plant — scheduled for the first quarter of next year — for the production of its Titan Silicon anode material. Founded in 2011, the company has raised $1.4 billion, per Crunchbase.

2. Formation Bio, $372M, biotech: Every week there is a big biotech raise and this week’s is really big. Formation Bio, an AI-enhanced pharma company, raised a $372 million Series D led by a16z. The New York-based startup, launched in 2016 as TrialSpark, has built AI-enabled platforms and processes to accelerate drug development and clinical trials — integrating large language models, AI models and applications throughout its platform. More and more biotech startups are using AI to help with their drug processes and investors are clearly taking note. Founded in 2013, the company has raised $528 million, per Crunchbase.

3. CData Software, $350M, data integration: A round that likely skipped under most folks’ radar was data connectivity company CData Software’s massive $350 million growth round from two big-named firms. The round was led by Warburg Pincus, with participation from Accel. The Chapel Hill, North Carolina-based company develops data products and connectivity solutions that provide access to live data from hundreds of on-premises and cloud applications. Founded in 2016, the company has raised $510 million, per Crunchbase.

4. (tied) Creatio, $200M, customer relationship management: Low-code and no-code startups are not seeing the funding they did a couple of years ago, but it clearly has not dried up completely. Creatio achieved unicorn status after landing a $200 million round led by Sapphire Ventures. The new cash, a minority investment, values the startup at $1.2 billion and will be used to help the company expand globally as it continues to grow revenue 50% year to year. The Boston-based startup is a developer of a no-code platform to automate customer relationship management and enterprise workflows. Not surprisingly, the company has an AI angle — creating a new generative AI copilot to help automate different marketing and sales tasks. Founded in 2014, Creatio previously raised $68 million in 2021 in a round led by Volition Capital, per Crunchbase.

4. (tied) Foodsmart, $200M, healthcare: Foodsmart locked down a massive $200 million round led by TPG’s global impact investing platform, The Rise Fund. The San Francisco-based company has developed a telenutrition and food benefits management platform. Founded in 2010, Foodsmart helps those facing chronic disease and food insecurity by partnering with health plans and providers to give patients access to affordable healthy eating options, virtual nutrition counseling and meal plans. Foodsmart has raised nearly $315 million, per Crunchbase.

6. Sidecar Health, $165M, healthcare: Healthcare is a mess — nearly everyone can agree on that. Sidecar Health, a health insurance company providing major medical coverage to businesses, closed a $165 million Series D led by Koch Disruptive Technologies to try to untangle it at least a little bit. The El Segundo, California-based startup offers plans that eliminate the need for prior authorizations, referrals and networks for doctors — allowing patients to go where they want. Sidecar Health believes a free-market approach will ensure healthcare is more accessible and affordable. Founded in 2018, the company has raised $328 million, per Crunchbase.

7. EvolutionaryScale, $142M, biotech: It was a big week for biotech. New York-based EvolutionaryScale, which has developed a large language model for creating novel proteins, raised a $142 million seed funding, led by Daniel Gross, Lux Capital and Nat Friedman. Amazon Web Services and NVentures, the venture capital arm of Nvidia, also took part in the round. While the company’s AI can be used for accelerating drug discovery, it also believes it can be used for other other applications such as breaking down plastics.

8. Etched.ai, $120M, semiconductor: Etched.ai became the latest startup to ride the wave of investor enthusiasm for AI chips. The San Francisco-based startup locked up a $120 million round led by Positive Sum and Primary Venture Partners. The startup is the creator of the transformer-specialized AI chip Sohu, used to train and deploy large language models that are the underpinning of generative AI. Etched has announced a partnership with Taiwan Semiconductor Manufacturing Co. to produce the chip, which will be a direct competitor to chip giant Nvidia — which dominates the market in AI. However, the large energy consumption of AI remains a concern, and Etched believes it can provide a more cost-effective and energy-efficient chip that is faster.

9. Bright Machines, $106M, manufacturing: San Francisco-based Bright Machines, a developer of software-defined manufacturing, raised $126 million in a Series C funding — with $106 million in equity led by investment from funds and accounts managed by BlackRock. Founded in 2018, Bright Machines has raised more than $400 million, per the company.

10. (tied) Hebbia, $100M, artificial intelligence: New York-based Hebbia, a startup using generative AI to search large documents and find answers, raised nearly $100 million in a Series B led by Andreessen Horowitz. Founded in 2020, the company has raised more than $130 million, per Crunchbase.

10. (tied) LanzaJet, $100M, fuel: Chicago-based LanzaJet, a sustainable fuels technology company, announced a $100 million growth equity round. Investors included Mitsubishi UFG Financial.

Big global deals

There were a few big rounds outside the U.S. this week. The largest was:

• Turkey-based Getir, which provides on-demand delivery services, raised a $250 million venture round.

Methodology

We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of June 22 to June 28. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

Illustration: Dom Guzman

It may be the big funding rounds that grab the headlines when it comes to the startup world, but for investors it’s the exit that actually matters.

For the past few years the M&A market for startups has been slow — and the IPO pipeline nonexistent.

However, just as AI is taking over venture, perhaps it is doing that for the M&A and IPO markets.

OpenAI — which reportedly has doubled annualized revenue to $3.4 billion — opened up its wallet the past few days to make two deals happen. The creator of ChatGPT first bought search and analytics startup Rockset last week. The San Mateo, California-based company had raised nearly $118 million in capital, per Crunchbase. Terms of the deal were not disclosed.

Then just this week, the AI giant bought video collaboration startup Multi, previously Remotion, in what was reportedly an acqui-hire. The San Francisco-based company had raised $13 million to date, per Crunchbase.

Overall, M&A has picked up slightly involving startups, per Crunchbase data. The current quarter already has witnessed more activity than Q1, with more than 430 deals. However, those numbers are still relatively low compared to quarters in previous years.

While those two deals will not set fire to the M&A market, it doubled the amount of deals OpenAI had previously done according to Crunchbase. It may show a new willingness for inorganic growth, a desire nearly all Big Tech companies must gain as they get larger. With OpenAI’s ever-expanding revenue numbers and the value of the company ever increasing, it certainly has the wherewithal to easily become a Goliath among suitors.

However, M&A is not the only way to exit, and AI may be looking to help there too. Last week, artificial intelligence chips startup Cerebras Systems reportedly filed confidentially for an initial public offering.

It’s a good time to be an AI chip developer. Nvidia has become one of the most — if not the most — valuable companies in the world and funding is currently gaining traction in the sector. Astera Labs — which provides data and memory connectivity solutions for some of the biggest chipmakers in the world — had a successful IPO even though its shares have tailed off its highs.

Other companies that went public this year had strong AI ties — like biotech Tempus AI — or played up their AI connections strongly — like Reddit.

Public investors are clearly intrigued by the AI tech play and where it may lead.

Investors have waited a couple years for the IPO and M&A markets to open back up, and it would not be surprising for AI to lead that charge — just as it seems to be leading everything else.

If big AI companies like OpenAI and perhaps Nvidia — which is showing interest in taking on the cloud services providers — start to get acquisitive and more startups think the time is right to test the public market, investors may start to see those long-awaited returns rolling in.

Things that caught our eye and other stuff:

• The soap opera at Stability AI took another turn this week, as investors that included ex-Facebook President Sean Parker committed $80 million to take over the artificial intelligence-driven visual art startup. Per a story in The Wall Street Journal, the new investors made a deal with suppliers to forgive some $100 million owed by Stability and also negotiated for the startup to be released from $300 million in future obligations. It’s the latest twist for Stability, which locked up a $101 million raise led by Coatue, Lightspeed Venture Partners and O’Shaughnessy Ventures in 2022. The company did not release a valuation at the time, but Bloomberg reported the new cash infusion valued the company at around $1 billion. However, in spring of last year Forbes reported Stability AI’s founder Emad Mostaque made exaggerated statements about both his own background and his generative AI startup. At the time, some AI researchers disputed the startup’s claims that it created the image generator Stable Diffusion, an open-source project developed by researchers. It also was reported the London-based startup was looking to raise an additional $1 billion of capital at a multibillion-dollar valuation, but talks had stalled. In March, reports surfaced that Mostaque left the company after an investor revolt. The company said in an internal memo it was trying to “right-size” the business after a period of unsustainable growth, per the report. Finally, in April the startup laid off 10% — estimated to be about 20 people — of its workforce, per a report by CNBC. That’s quite the whirlwind — even for an AI startup.
• Another round that caught our attention this week was raised by a Palo Alto, California-based startup. MEandMine, a developer of AI-flagging to identify psychological risks in young children, raised $4.5 million in funding led by K5 Global. The startup offers AI-powered screening to identify students’ psychological risks in real time by playing games with data points that are used for AI-flagging, allowing teachers, counselors and others to screen early and make informed decisions. Initial results from its California school pilots show a 91% accuracy, the company says. MEandMine’s algorithm launches games based on individual students’ makeup, and can help them center themselves.

Related Crunchbase Pro list:

• Global Venture-Backed M&A

Related reading:

• Deal-Making Involving VC-Backed Startups Picks Up Slightly, But Still Slow
• Accounting Startup Klarity Books $70M Series B — Report
• AI Chip Startup Etched Captures $120M In Hot Market
• Stability AI Newest Addition To Unicorn Stable
• Stability AI’s Founder Made Misleading Claims — Report
• Stability AI Lays Off 10% Of Staff — Report

Illustration: Dom Guzman

The San Francisco-based startup locked up a $120 million round led by Positive Sum and Primary Venture Partners.

The startup is the creator of the transformer-specialized AI chip Sohu, used to train and deploy large language models that are the underpinning of generative AI.

Etched has announced a partnership with Taiwan Semiconductor Manufacturing Co. to produce the chip, which will be a direct competitor to chip giant Nvidia — which dominates the market in AI.

However, the large energy consumption of AI remains a concern, and Etched believes it can provide a more cost-effective and energy-efficient chip that is faster.

Semi explosion

Etched is just the latest chip startup to raise big. Venture funding to semiconductor chips appears well on its way to bouncing back this year after a forgettable 2023. Thus far in 2024, VC-backed chip startups have raised nearly $5.3 billion in just 175 deals, per Crunchbase data.

Last year, startups saw less than $8.8 billion in 490 deals. In 2022, chip startups locked up almost $10.9 billion in 447 deals.

Some big deals in 2024 include:

• This month Black Semiconductor raised nearly $275 million — mainly from the German government.
• In March, optical interconnectivity startup Celestial AI raised a massive $175 million Series C led by Thomas Tull’s US Innovative Technology Fund. Celestial’s photonic fabric platform helps separate compute and memory, making processing extensive AI faster and more energy-efficient.
• In February, San Jose, California-based Recogni, which is developing its AI inference chip for both the generative AI and automotive industries, raised a $102 million Series C co-led by Celesta Capital and GreatPoint Ventures.

More big rounds could be on the way, as it was recently reported smartphone-maker Samsung is leading a round of at least $300 million for Toronto-based AI chip startup Tenstorrent.

Related Crunchbase Pro list:

• Semiconductor Funding To VC-Backed Startups

Related reading:

• Generative AI Chip Designer Recogni Locks Up $102M
• Chip Startup Celestial AI Lands Massive $175M Series C
• Semiconductor Startup Funding Looks To Bounce Back After Lackluster 2023

Illustration: Dom Guzman

It was just the latest sign of chip startups being able to raise big money as once again one of the most foundational technologies grab investors’ attention around the world, mainly thanks to AI.

Global venture funding to semiconductor chips appears well on its way to bouncing back this year after a forgettable 2023. Thus far this year, VC-backed chip startups have raised nearly $5.3 billion in just 175 deals, per Crunchbase data.

Those numbers are well ahead of the pace from last year, when such startups saw less than $8.8 billion in 490 deals. In 2022, chip startups locked up almost $10.9 billion in 447 deals.

More big rounds could be in the way, as it was reported last week that smartphone-maker Samsung is leading a round of at least $300 million for Toronto-based AI chip startup Tenstorrent.

US chip boom

U.S. startups are playing a key role in the surge of funding. Domestic startups have raised almost the same amount of money — about $1.2 billion — in nearly the same number of deals — 24 to 22 — compared to all of last year, per Crunchbase.

It is important to note that number is greatly helped out by PsiQuantum, which focuses on semiconductor process development and integrated photonic devices and systems. The company landed a financial package of $620 million from the Australian Commonwealth and Queensland governments this spring to build a quantum computer at a location in Brisbane, Australia. The round is actually a mix of equity, grants and loans.

Even without that round, U.S. startups would be ahead of last year’s pace. While many of the biggest rounds this year went to Chinese chipmakers like ChangXin Memory Technologies, Unisoc and AaltoSemi, some large financings also went to U.S.-based semiconductor startups, including:

• In March, optical interconnectivity startup Celestial AI raised a massive $175 million Series C led by Thomas Tull’s US Innovative Technology Fund. Celestial’s photonic fabric platform helps separate compute and memory, making processing extensive AI faster and more energy-efficient.
• In February, San Jose, California-based Recogni, which is developing its AI inference chip for both the generative AI and automotive industries, raised a $102 million Series C co-led by Celesta Capital and GreatPoint Ventures.
• In March, Santa Clara, California-based Eliyan, a chiplet interconnect developer, raised a $60 million round co-led by Samsung Catalyst Fund and Tiger Global Management.

“Semi used to be a four-letter word in the Valley, but now it’s sexy,” said Sriram Viswanathan, founding managing partner at San Francisco-based Celesta Capital. Along with its Recogni investment, the deep-tech firm’s portfolio includes Palo Alto, California-based SambaNova Systems.

AI effect

Of course what is leading to this renewed investor interest is the key driver of so many things in the tech world — AI.

Artificial intelligence is the driving reason chip giant Nvidia is now a $3 trillion-plus company. And while shares of Astera Labs — which provides data and memory connectivity solutions for some of the biggest chipmakers in the world, including Intel and Taiwan Semiconductor Manufacturing — are off their highs, they are still well above their IPO price from March. Astera’s IPO, in particular, was seen as a bellwether offering for both the semiconductor and AI industries.

Both those companies show there is significant public investor interest in the chip market — and that usually translates to VC interest in the private markets.

“While the full promise of AI commercialization has not been fully evidenced, the ‘FOMO’ of (the) AI race is pushing a lot of hot money into the value chain from AI applications to data infrastructure to semiconductors,” said Lorin Gu, founding partner at New York-based Recharge Capital, an investor in wireless-device chip manufacturer Airoha Technology.

“Given that at-scale AI application often requires retooling or new build of infrastructure, there is a strong cyclical demand for semis at the moment,” Gu added.

While the space has become more competitive to invest in, it also has become more creative in terms of financing, with more hybrid deals and investors analyzing the risks and capex in more granular details for the industry, Gu said.

Viswanathan added that the semi and hardware space as it relates to AI has been inundated with capital of late and is somewhat “over-inflated.”

Despite the influx of money and investors in the space, Viswanathan said there are opportunities at the silicon and hardware level. That includes startups looking to make AI inference — a model’s ability to use new data to make predictions and draw conclusions — more efficient.

However, it is important to remember chipmaking can be an expensive proposition and it is an industry dominated by a few big players like Nvidia.

While those in the AI space may be looking for an alternative to Nvidia, it can be a difficult market for any startups to make headway.

Nevertheless, it seems at least for now investors are willing to take that risk.

Related Crunchbase Pro lists:

• Semiconductor Funding To VC-Backed Startups
• Semiconductor Funding To US-Based, VC-Backed Startups

Related reading:

• Astera Shares Soar Following IPO
• Chip Startup Celestial AI Lands Massive $175M Series C
• Generative AI Chip Designer Recogni Locks Up $102M

Illustration: Dom Guzman

Deal-making volume seems to be slowing in the second quarter — with just a couple of weeks left — compared to other recent quarters, when investors’ appetite showed little to no limits for the all-encompassing technology.

According to Crunchbase data, the number of funding deals is on pace to reach only about 900 this quarter — a seemingly significant drop from the 1,052 last quarter and a decline of nearly 30% from the same quarter last year.

Not surprisingly, it is the earliest funding rounds — angel, seed and early stage — at the root of the deal-making slowdown.

The good news for AI startups is that the dollar amount is up. The second quarter already is pacing to be one of the highest-dollar quarters since early 2022 with more than $16 billion already raised.

That is due in part to some huge rounds. Five raises hit $1 billion or more this quarter — including those by xAI (the biggest one), CoreWeave, Xaira Therapeutics and Scale AI.

Seed funding slows

However, deal volume is seemingly dropping — and that starts in the earliest rounds. Although it is difficult for seed rounds to make a dramatic shift in total dollars of any sector, it is the most likely to show changes in deal flow since it is the largest category by volume of deals.

Only 423 seed/angel rounds were announced through the first week of June, putting it on pace for likely just more than 600 funding rounds. That will be a steep decline from the 779 deals announced last quarter and likely a drop of about a third from Q2 last year.

The dollar amount also is on pace to be down, but again — with seed and angel rounds being small by their very nature — it isn’t a pronounced drop to the overall total of funding AI startups receive.

Total dollar amount for the quarter seems likely to hit between $1.3 billion and $1.4 billion, just a tick below the $1.6 billion in Q1 and the $1.5 billion in Q2 2023.

Early-stage deals stagnate

The number of early-stage deals also slowed. While the quarter is on pace for a similar amount of deals compared to Q1, that is still more than a 15% decline from Q2 last year.

The somewhat good news for early-stage funding is that the dollar amount is up. Already $9.8 billion has been raised in early-stage deals, compared to the $6.4 billion last quarter or the $4.7 billion raised in Q2 last year.

However, even that comes with a large caveat; that difference is mainly due to one round. xAI’s $6 billion round — with investment from the likes of Valor Equity Partners, Andreessen Horowitz and Sequoia Capital — greatly skews the early-stage funding numbers, making up nearly 60% of the total.

What it means

To be honest, it likely is too early to tell if the deal volume slowdown means anything quite yet.

It could mean some investors are becoming less willing to back the youngest AI startups and instead are willing to invest in bigger rounds for somewhat  more proven companies even if the valuations are significantly higher.

In addition, since seed and growth-stage investor mindsets are often different, perhaps AI fatigue is setting in among early investors who are tiring of the story and escalating prices.

One thing to keep in mind is that as early-stage volume ticks down, that could mean fewer companies looking for large growth rounds in the next 18 to 24 months, since some may never have received the early funding when they were young to get to later-stage funding.

Nevertheless, the dollar amount is up and investors still seem eager to pour in billions to nearly anything AI related — just perhaps not in the same number of deals as before.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of June 6, 2024. Companies included in the data fall within Crunchbase’s artificial intelligence industry group tag. Some of the decline in deal counts may be attributable to the tendency for smaller, seed-stage rounds to be added to the Crunchbase dataset several weeks or months after they close.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here.

Another slow week for funding — the third straight after a significant pick-up in large rounds earlier this year. Xcimer Energy led the way, as it was the only startup to lock up a nine-figure round. The dog days of summer seem to already be here in the venture world.

1. Xcimer Energy, $100M, energy: Well, fusion funding was down — until this happened. Denver-based Xcimer Energy announced it raised a $100 million Series A led by Hedosophia. The company is working on laser-driven inertial fusion and will use the funding to build a prototype laser system including what it calls the “world’s largest nonlinear optical pulse compression system.” Founded in 2022, Xcimer has raised nearly $118 million, per Crunchbase — including a $9 million in grant funding from the U.S. Department of Energy’s Milestone-Based Fusion Development Program.

2. Pika, $80M, artificial intelligence: It never takes us long to get to an AI startup on this list. Pika, an artificial intelligence startup that generates video, raised an $80 million round led by Spark Capital that values the Palo Alto, California-based company at $470 million, per Bloomberg. Notably, actor and singer Jared Leto also is an investor. Pika is part of a growing group of startups building text-to-video AI software. Founded in 2023, the company has raised $135 million, per Crunchbase.

3. (tied) Prolific Machines, $55M, biotech: Unlike in previous weeks, there was no huge biotech round. The biggest this week went to Emeryville, California-based Prolific Machines, which raised a $55 million Series B led by the Ki Tua Fund, the corporate venture arm of Fonterra Co-operative Group. The startup’s platform allows commercial customers to more efficiently produce biological products through the use of light for things like cellular agriculture and nutritional protein production. Founded in 2020, Prolific has raised $86.5 million, per the company.

3. (tied) Restor3d, $55M, 3D technology: Restor3d, a North Carolina-based maker of 3D printed personalized orthopedic implants, locked up a $70 million financing — even as investors continue to cool on 3D tech startups. The round includes a $55 million Series A round led by Summers Value Partners and existing investors plus an additional $15 million in debt financing led by Trinity Capital. The startup plays at a unique intersection of healthcare/biotech, AI and 3D technology. The firm uses biomaterials, 3D printing technologies and AI to help repair the human body. It is planning to  introduce new implant systems for total ankle and shoulder replacements, offering 3D printed solutions that fit the unique anatomy of the individual patients. Founded in 2017, the company has raised nearly $150 million, per Crunchbase. While the 3D tech sector saw big money in 2021 and 2022, the past two years have seen the sector come back down to the new reality. Although VC-backed startups in the sector saw more than $2.4 billion invested in 2022, that number dropped to only about $1 billion last year, per Crunchbase data. It is on a similar trajectory this year, with only about $424 million raised thus far.

5. (tied) Osteal Therapeutics, $50M, biotech: Dallas-based Osteal Therapeutics raised a $50 million Series D led by Zimmer Biomet. The biotech startup is developing new drug/device therapies for orthopedic infections. The company’s development strategy is to use approved drugs as candidates for new routes of local, concentrated delivery. Founded in 2013, the company has raised nearly $113 million, per Crunchbase.

5. (tied) Twelve Labs, $50M, video: Yet another AI-related video startup. San Francisco-based Twelve Labs, a developer of video foundation models to make video searchable, raised a $50 million Series A co-led by new investor New Enterprise Associates and NVentures, Nvidia’s venture capital arm. The startup’s generative AI foundation models allow users to input natural language prompts that can find precise moments in large libraries of videos — potentially saving hours of time. Founded in 2021, the company has raised $77 million, per Crunchbase.

7. AcuityMD, $45M, medtech: Boston-based AcuityMD, a commercial platform to identify target markets in the medical industry, locked up a $45 million round led by Iconiq Growth. Founded in 2019, AcuityMD has raised more than $83 million, per the company.

8. Eko Health, $41M, health care: San Francisco-based Eko Health, which uses artificial intelligence for early detection of heart and lung diseases, raised a $41 million Series D. No lead investor was announced. Founded in 2013, the company has raised approximately $169 million, per Crunchbase.

9. Advanced Medicine Partners, $32M, biotech: North Carolina-based Advanced Medicine Partners, a developer of advanced medicines, received $32 million in financing led by Deerfield Management. Founded in 2023, this is the company’s first announced round, per Crunchbase.

10. Ashby, Hypr and Sword Health all raised $30 million rounds.

Big global deals

The largest round of the week came from a Chinese semiconductor company.

• Shanghai-based Unisoc, a semiconductor company focused on chipsets in mobile communications and IoT, raised a round worth approximately $552 million.

Methodology

We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of June 1 to June 7. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

Illustration: Dom Guzman

Similar to April, big-named investors dominated investing in U.S.-based startups last month.

Andreessen Horowitz, General Catalyst, Sequoia Capital, Khosla Ventures, Founders Fund and Alumni Ventures led the way in the number of deals, although only a16z hit double digits, with 10 investments.

Just a couple of years ago it was not uncommon for firms to need a dozen or more deals to head up this list. But as the venture market continues to plug along, a smaller amount of deal-making seems to be the preferred route for even the biggest VC firms.

Andreessen Horowitz, 10 deals

May’s total was the most deals for a16z since January — when it took part in 15 financings.

Of course, the biggest deal it took part in was the $6 billion round for xAI, Elon Musk’s generative AI startup. The round, which also included participation from Sequoia, Valor Equity Partners and Fidelity Management & Research Co., values the startup at $24 billion post-money — making it the second-most-valuable VC-backed generative AI company in the world behind only competitor OpenAI.

However, that was not the only big deal a16z completed last month. The firm also co-led cloud security startup Wiz’s massive $1 billion raise at a $12 billion valuation. The round, which also counted Lightspeed Venture Partners and Thrive Capital as co-lead investors, is the biggest cybersecurity round of the year thus far.

In addition, the firm led smaller rounds for AI cancer treatment startup Valar Labs, weapon targeting company ZeroMark, and Rollup, a collaborative platform for hardware.

General Catalyst, 8 deals

General Catalyst led the way in April, but dropped down a few deals in May.

Nevertheless, it did take part in a couple of pretty big rounds. The New York investment firm participated in Karius’ $100 million Series C. The startup helps give genomic insights into infectious diseases.

General Catalyst also co-led — along with 7wire Ventures — San Francisco-based personalized healthcare platform Transcarent’s $126 million Series D that valued the company at $2.2 billion.

Sequoia Capital, Khosla Ventures, Founders Fund and Alumni Ventures, 7 deals each

A quartet of well-known firms each deadlocked at seven deals. Sequoia, Khosla and Founders Fund all made fewer investments in May than they did the previous month, whereas Alumni’s number of deals jumped from April but was still its second-lowest deals amount since at least the beginning of 2023.

Similar to a16z, Sequoia Capital also took part in both xAI’s and Wiz’s huge rounds. It also led a $26.5 million Series B for quantum computing startup Quantum Circuits.

Khosla actually co-led Karius’ previously mentioned $100 million round, as well as Rad AI’s $50 million Series B. The San Francisco-based startup develops software that uses AI to automate radiology report writing.

The largest round Founders Fund participated in was Scale AI’s huge $1 billion round led by Accel that values the data labeling and evaluation startup at a stunning $13.8 billion. However, it also led a $45 million Series B for New York-based Polymarket, a prediction market platform where traders predict future outcomes based on news in real time.

Alumni usually invests in smaller earlier-stage rounds, and that was the model it followed in May with everything being pre-seed to Series A. The only exception was participating in Frore Systems’ big $80 million Series C led by Fidelity Management & Research Co. The San Jose, California-based startup has developed a solid-state active cooling chip — AirJet — that allows users to leverage AI even on the edge of networks or on edge devices without them getting too hot and losing performance.

Also notable:

• Accel came in next on the list with six deals.
• Khosla Ventures and Accel led the way in most led or co-led deals in May with four.
• Accel also led the list for number of rounds led or co-led with the highest dollar amounts, leading or co-leading four rounds that in total were worth almost $1.3 billion.
• Y Combinator once again was the top investing incubator and accelerator with 10 deals in May.

Methodology

This is a list of investors which took part in the most rounds involving U.S.-based startups. It does not include incubators or accelerators due to the fluctuations their investment numbers can have.

Illustration: Dom Guzman

The Federal Trade Commission is set to look into Microsoft’s relationship with OpenAI, while the Justice Department will investigate whether Nvidia violated antitrust law, per reports.

The two agencies spent the past six months in negotiations about how to split up the two probes.

Of course, regulatory scrutiny concerning AI is nothing new for Microsoft. The Redmond, Washington-based giant has had regulators looking at it since news broke of its $10 billion megadeal with OpenAI — in the biggest startup funding round of 2023 in any sector.

Per news reports, the FTC probe will also look into Microsoft’s deal in March with Inflection AI to pay the startup $650 million to license its AI software and hire most of its staff.

The deal — seemingly framed in a way to get around any regulatory hurdles since it is not officially an acquisition — once again showed the tech titan’s insatiable appetite for all things AI.

What could it mean?

While specific details about both investigations remain sparse, the FTC reportedly is looking at both the conduct of Microsoft and OpenAI, while the DOJ will examine the behavior of Nvidia, whose AI chips dominate the market.

The probes could have an impact on AI startups. Both Nvidia and Microsoft have been huge investors in startups in the sector, and both could move away from such deals as regulators look over their deals in the industry.

If that happens, venture funding could hit another lull. In May, companies in the AI sector raised 40% of venture funding for the month with $12.5 billion invested across more than 250 companies, based on an analysis of Crunchbase data.

xAI raised close to half of that amount in a single round.

Related Crunchbase Pro list:

• Rounds Raised By Startups Using AI

Related reading:

• AI Investing Boom Is Not New To Tech Giants (At Least Not Their VC Arms)
• Eye On AI: Microsoft Remains Infatuated With AI Startups, And It’s Not Just Inflection And OpenAI
• Salesforce, Nvidia, Cisco Invest In AI Startup Cohere At $5B Valuation — Report
• Eye On AI: More Regulators Look Into AI Investing

Illustration: Dom Guzman

Looks like we are back to weekly billion-dollar raises at multibillion-dollar valuations, at least when it comes to generative AI startups.

Last week, Scale AI raised $1 billion in a round led by Accel that values the data labeling and evaluation startup at a stunning $13.8 billion. And this week, of course, Elon Musk’s generative AI startup, xAI, officially announced its $6 billion round that values the company at $24 billion.

The xAI round — which included investment from Valor Equity Partners, Vy Capital, Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Co., Prince Alwaleed Bin Talal and Kingdom Holding Co., among others — makes Musk’s startup the second-most-valuable generative AI company in the world behind only competitor OpenAI.

While the round had been rumored for a long time and some investors had leaked — especially since everyone knew many would be the same as those that helped Musk take X, formerly Twitter, private —  it was still interesting to see the overlap so many investors have with some of the other biggest LLM players.

Of course the most obvious is Sequoia. The VC giant reportedly took part in OpenAI’s $300 million share sale at a valuation between $27 billion and $29 billion.

However, Sequoia was not alone in that deal. Andreessen Horowitz also was a part of that deal, and the Silicon Valley venture titan hasn’t stopped there when it comes to its generative AI aspirations.

Andreessen also led a Series A worth about $418 million for Paris-based Mistral AI — which is taking a somewhat different approach to LLM building than OpenAI, as it is focused on taking an open-source approach. (Earlier this month it was reported the startup was closing in on a round of about $600 million from existing investors General Catalyst and Lightspeed Venture Partners that would value it at $6 billion.)

Investors obviously can invest in more than one startup in a very specific industry like the generative AI/LLM building vertical. Microsoft, too, is an investor in OpenAI, Mistral and United Arab Emirates-based artificial intelligence firm G42.

However, VCs used to stay away from overlapping investments and investing in competitors. That norm seems to have changed slightly as the venture capital industry became bigger, and now it looks like the AI craze has obliterated that rule of thumb completely.

VC firms are clearly fearful of missing out on the AI revolution — perhaps the biggest shift since mobile — and old ways don’t seem to apply.

Things that caught our eye and other stuff:

• Another investor in the xAI round also was noteworthy — not because it has invested in other competitors, but because it has been a big player in AI recently. In the last year and a half or so, Fidelity Management & Research Co. has led a $642 million minority investment in AI cloud infrastructure company CoreWeave at a $7 billion valuation, took part in a $500 million-plus Series I for AI-enhanced data analytics company Databricks that valued the company at $43 billion, and led a $150 million Series D for chip startup Astera Labs that valued the company at nearly $3.2 billion in late 2022. Those are some massive rounds that all revolve around AI.
• Not everything revolved around Elon Musk and xAI the last few days in AI. A New York-based startup that raised a small $5 million seed also caught our attention. ThinkLabs AI is looking to enhance grid planning through a combination of intelligent automation and AI, and has developed an AI copilot to help control room operators more effectively operate complex modern grids. The round was co-led by Powerhouse Ventures and Active Impact Investments.

Related Crunchbase Pro query:

• Rounds Raised By Startups Using AI

Related reading:

• xAI Makes It Official — Raises $6B At $24B Valuation
• Scale AI Raises $1B In Accel-Led Round; Hits $13.8B Valuation

Illustration: Dom Guzman

Earlier this month, CoreWeave announced it had raised a whopping $1.1 billion in a fresh funding round led by Coatue in a deal valuing the company at $19 billion, per The Wall Street Journal. That represents an almost threefold increase from the company’s valuation just five months earlier, when it was valued at $7 billion following a secondary sale, and a huge jump from its $2 billion valuation in a Series B extension last May.

Then just last week, the Nvidia-backed company announced its new European headquarters in London, in addition to a commitment to invest $1.25 billion into the continent.

Big money

CoreWeave has now raised more than $12 billion in equity and debt through the past 12 months, per the company. Just last August, CoreWeave raised another debt financing worth $2.3 billion.

The company, which gives access to highly sought after AI chips from Nvidia, operated in 14 data centers at the end of last year and anticipates doubling its data center footprint to 28 globally by the end of 2024.

“CoreWeave is building the infrastructure to power the AI innovations that are already changing how businesses operate in the global economy,” said co-founder and CEO Michael Intrator in a statement. “The caliber of investors in this large debt financing round is a powerful testament to both the insatiable market appetite for AI infrastructure and their belief in CoreWeave’s ability to deliver cutting edge innovation for the largest AI labs and innovators at scale.”

Other firms that participated in the new debt finance include Carlyle, CDPQ, DigitalBridge Credit, funds and accounts managed by BlackRock, Eldridge Industries and Great Elm Capital.

Related reading:

• AI Cloud Infrastructure Startup CoreWeave Raises Huge New Round At Reported $19B Valuation

Illustration: Dom Guzman