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| 1 | | Modern Hydrology announced $32.8M in funding as it pivots from heat-to-electricity technology to hydrogen fuel production. The startup now focuses on developing methane pyrolysis reactors that convert natural gas from fossil fuels or biogas to hydrogen. More: - The company was founded as Modern Electron in 2015 in Intellectual Ventures, a Bellevue, Wash.-based innovation hub backed by Bill Gates.
- Modern is running pilot projects with Oregon utility NW Natural and another undisclosed utility company, in which the startup will deliver demo reactors by Q3.
- The round, which gets Modern passed the $100M total raised, was led by NextEra Energy, with participation from Gates Frontier and Starlight, among others.
- The company plans to be ready for commercialization by 2024 or early 2025.
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What the numbers say: In Q1 2023, U.S. startups secured $3.5B in funding through venture debt, the lowest quarterly sum since 2017. Venture debt reached record levels last year as sourcing equity funding became difficult amidst the global VC funding pullback. What happened: Venture debt allocation for startups reduced this year due to climbing interest rates and macroeconomic volatility. Additionally, the downfall of Silicon Valley Bank (SVB) —one of the biggest venture debt lenders— further aggravated the venture debt shortfall. SVB's new owner First Citizens BancShares Inc., assured investors that the bank remains committed to providing venture debt to startups. Other lenders, however, don't share the same view and are reducing their venture debt commitments as economic growth slows. Where to see the impact: Startups may face a challenging fundraising environment due to the lack of venture debt, prevailing equity funding pullback, and difficulty in raising funding through IPOs. According to John Haltiwanger, an economist at the University of Maryland, this will most likely result in more businesses collapsing. Haltiwanger added, "These companies are heavily dependent on financing. If that financing dries up, they're in trouble." | | | |
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| 3 | | Germany-based drone delivery company Wingcopter was granted €40M ($43.4M) by the European Commission’s InvestEU program. The startup plans to utilize the funds in R&D and manufacturing. More: - Wingcopter develops drones that can carry 5 kilograms (11 lbs.) for a distance of 100 km (~62 miles).
- The company is currently operating the drones through a UNICEF project in Malawi, delivering medicines and medical supplies to hard-to-reach areas.
- Wingcopter expects to test the drone in southern Hesse, Germany, this summer for delivering groceries.
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| 4 | | Louisa, a startup offering an AI-powered networking platform for employees, spun out of Goldman Sachs' internal incubator. CEO Rohan Doctor is now tasked with growing the startup's user base. Goldman Sachs' employees have been using the software for two and a half years. More: - Louisa analyzes an employers database to create user profiles and to "proactively connect people who might benefit from knowing each other," said Doctor.
- The platform has more than 20,000 monthly active users.
- Doctor already has a commercial bank and a VC fund lined up as clients for Louisa.
- He adds that the remote and hybrid working environment has created a need for a platform to facilitate interaction between employees and forming new connections.
Zoom out: - Louisa is the first startup to emerge from Golman's in-house incubator.
- Goldman's CEO David Solomon hired executives from Google and Amazon to pitch startup ideas and grow them through the incubator.
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| 5 | | Canadian AI startup Koïos Intelligence secured $6.5M in funding to expand into new markets and further develop its AI virtual assistant. The funding includes a mix of equity, debt, and "other call options." More: - Propulia Capital, Canada Economic Development, Export Development Canada, Caisse Desjardins des Technologies, and others participated in the funding round.
- Koïos' AI-powered virtual assistant Olivo is geared toward insurance professionals.
- The platform leverages multimodal AI to analyze interactions between insurance sellers and customers.
- Olivo also leverages AI to personalize marketing messages by analyzing customer data.
Zoom out: - Koïos' own survey found that 75% of customers surveyed expect a response from an insurance agent within five minutes.
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| 6 | | A former Google program manager, Yiğit Ihlamu, is launching Vela Partners, an AI-powered early-stage VC firm. The firm adds to the list of VCs using algorithms to assist in their startup picks, including SignalFire, EQT Ventures, and Nauta Capital. More: - Vela plans to write checks from $500,000 to $1.5M as the lead investor or co-lead.
- As it comes out of stealth, the firm has $25M under management, including Bear Robotics.
- Vela uses a game-like terminal to analyze developer ecosystems, including those in AWS and GitHub.
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- Caregiving startup Wellthy secured $25.5M in fresh funding from Citi Impact Fund, Cercano Management, and Stardust Equity. The company acquired the end-of-life support platform Lantern for an undisclosed sum.
- SLAIT pivoted from a sign language AI translator to an interactive tutor powered by computer vision for ASL speakers.
- Arizona-based B2B brand building and audience engagement solutions provide AudiencePlus secured $5.4M in seed funding led by Emergence Capital. Forum Ventures, Worklife Ventures, and GTMfund backed the funding round.
- San Francisco, Calif.-based startup Audioshake secured $2.7M in seed extension funding bringing the total raised under the round to over $5M.
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Term of the Day Economies of scale : Economies of scale are the financial benefits that businesses experience when their production costs fall as their output volume rises. Question of the Week How do you approach networking, and what advice can you give others looking to build their professional connections? Join the conversation |
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 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot. | | This newsletter was edited by Vibha Chapparike | |
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