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| Hey Insiders, Today's newsletter covers: - 🏥 Lindus Health's $18M Series A round backed by Peter Thiel
- 🌎 LatAm startups turn to venture debt
- 💸 Phasecraft's $16.5M funding round
If you find this newsletter useful, please share it with your friends and colleagues. Thank you. Karan
p/karan-chafekar | |
| 1 | | Clinical trials startup Lindus Health raised $18M from Peter Thiel and Swedish early-stage venture capital firm Creandum. "This is a massive market, and tech-first CROs have not yet got a foothold," said the startup's co-founder Michael Young. More: - A contract research organization (CRO) is a third-party entity to which biotech and pharma companies off-source research.
- The CRO market is estimated to be worth $77B, with a projected 70% growth within five years.
- The startup uses machine learning to automate manual iterative processes, trained on its own historical protocols and data from clinicaltrials.gov and ScanMedicine.
- Other backers of the company include Seedcamp, Firstminute Capital, Hambro Perks, and Amino Collective.
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| 2 | | Startups in Latin America are turning to high-interest debt amidst the venture funding pullback. 
What the numbers say: Venture debt represented 31.5% of the total capital raised by startups in the first half of the year, per data from Lavca seen by Bloomberg. In H1 2023, LatAm startups raised $550M in debt, compared to the $1.2B in equity funding. What happened: Startup founders are opting for debt to avoid valuation markdowns that come with equity fundraises. This marks a dramatic shift in the region which largely avoided debt funding until recently. Over the past 12 months, lenders issued $1B in debt to LatAm startups. At the same time, equity venture funding dipped to $3B. Why it matters: Startups are raising debt funding despite the strict covenants that come along, including minimum return guarantees, make-whole agreements, and equity kickers. Despite the high-interest rates and the covenants, debt funding is critical to many startups, without which many would be forced to close. Q: Is venture debt the right choice for startups instead of equity funding? Let us know here. | | | |
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| 3 | | Quantum computing startup Phasecraft announced it raised a £13M (~$16.5M) Series A led by VC Playground Global. The company plans to use the funding to advance its algorithms to perform practical tasks such as novel materials discovery. More: - "For all the advances that have been made in quantum hardware, and for all quantum computing's promise, such progress could end up being for nothing if we can't build the applications needed to make the technology truly useful," said the startup's co-founder and CEO Ashley Montanaro.
- Phasecraft is working with companies focused on quantum computing hardware, such as Google, Rigetti, and IBM, on experimental demos.
- The startup claims a 400,000x reduction in the complexity of simulating the time evolution of material systems.
- Other investors in the round included AlbionVC, Parkwalk Advisors, the UCL Technology Fund, LCIF, and Episode 1.
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| 4 | | U.S. oil and gas producer Occidental Petroleum acquired Canadian carbon capture startup Carbon Engineering for $1.1B. The sum will be paid in three equal annual installments, with the first of the installments set to be transferred near the end of this year. The acquisition will help Occidental build 100 direct air capture (DAC) plants. More: - DAC technology helps use the carbon captured from the atmosphere in making concrete and aviation fuel.
- Roth MKM brokerage firm noted, "This is not a huge deal for Occidental, but we think it adds to near-term leverage and heightens concerns over cash burn at (Occidental's) Low Carbon Ventures division."
Zoom out: - Occidental is set to receive a part of the $1B federal grant allocated by the U.S. Department of Energy for proposed DAC plants in Texas and Louisiana.
- Occidental is building 30 DAC plants in Kleberg County, Texas.
- The firm is also set to receive grants from the $3.5B bipartisan infrastructure bill to fund to construction of the first two sites.
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| 5 | | Zeelo, a London-based smart bus platform, raised a $14M Series A. The startup is currently focusing on the U.S. enterprise sector by providing shuttle transportation. More: - The company seeks to expand in the U.S. by establishing a second HQ in Boston and relocating its co-founders.
- Zeelo claims Fidelity among its corporate clients.
- The startup plans to transition all bus services to battery-electric by 2030.
- Zeelo says it offset 2,600 tons of CO2 emissions in 2022.
- The round included participation from FlatzHoffmann, IREON Ventures, InMotion Ventures, and ETF Partners.
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| 6 | | Centricity's CEO, Michael Brackett, was arrested in the District of Maine. The AI startup's founder was charged with one count of securities fraud and one count of wire fraud by the Manhattan federal court for misrepresenting the financial condition of the startup. More: - The AI-powered data analytics startup falsely claimed that it had 13 large U.S. manufacturers as customers and $3.7M in annual revenue to raise capital from investors.
- Unaware of the false information, an unidentified victim had wired $500,000 to Centricity, which it could not recover later.
- Brackett allegedly transferred the funds out of the company's account and stepped down from the CEO role shortly thereafter.
- Per Pitchbook data, Brackett had raised $2.5M from angel investors in 2019 and planned to raise $10M more in 2021.
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| 7 | | Quick Hits: - The AWS Cookbook — packed with practical insights and hands-on examples — is a must-have for your cloud toolkit.*
- Blockchain startup Nova Labs is building a decentralized wireless network. The startup is offering Miami residents a $5 monthly plan with unlimited text, talk, and data.
- California-based battery research startup Mitra Chem is in talks to raise a $60M funding round, with GM reportedly set to lead the funding round.
- Workplace software firm SafetyCulture raised $34M from Marbruck Investments, Morpheus Ventures, and Index Ventures. The firm was valued at $2.7B, $600M up over its previous valuation 27 months ago.
- Data monetization platform Caden secured $15M in Series A funding. Nava Ventures led the round with additional backing from AME Cloud Ventures, Streamlined Ventures, Montage Ventures, and others.
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Term of the Day Rule of 40: Rule of 40 is a metric that analyzes the balance between the growth and profitability of a SaaS organization. Question of the Week Do you share details about your salary with your coworkers? Join the conversation |
INSIDE STARTUPS LEADERBOARD (7 DAYS) |
 | Analyst | | Karan Chafekar is a Management Consultant, Business enthusiast, and Licensed Pilot.
Nicolas is a Sr. Analyst at Inside, covering startups and transportation trends. He is an avid map maker and data nerd. Nicolas has worked in the shared-scooter space, as well as advised e-bike and moped start-ups. | | This newsletter was edited by Vibha Chapparike | |
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