Monday, March 18, 2024

Nvidia to acquire Run:ai for up to $1B / European venture debt deals hit record high / Ninja Van postpones IPO listing

Plus, Swiss climate tech startup Crosstown H2R emerges from stealth

Inside Startups

For March 18, 2024

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Here's your daily Startups briefing:

🤝 Chip giant Nvidia is set to acquire AI infrastructure orchestration startup Run:ai for up to $1B
📈 European venture debt deals hit a record high in 2023
🗓️ Ninja Van postponed its IPO listing and will proceed only after profitability improves

Thank you.

Karan
p/karan-chafekar

Chip giant Nvidia is in advanced talks to acquire AI infrastructure orchestration and management platform Run:ai, per Calcalist. According to sources, the deal could be valued as high as $1B.

More:

The startup, founded in 2018 by Omri Geller and Dr. Ronen Dar, offers a Kubernetes-based container platform that optimizes AI workloads by distributing them across multiple GPUs and similar chipsets.
- Geller serves as the company's CEO, while Dr. Dar is the chief technology officer.
Run:ai has raised $118M in total funding to date, the last of which came in the form of a $75M Series C round led by Tiger Global Management and Insight Partners in March 2022.
- The duo also led the firm's previous Series B round.

Zoom out:

Nvidia is currently the world's third most valuable company with a market capitalization of $2.2T, higher than Amazon.com, Google-parent Alphabet, and Saudi Aramco.
- The firm controls about 80% of the AI chip market.
Nvidia last acquired an Israeli startup called Mellanox for $6.9B in March 2019.

European lenders issued convertible debt deals worth $2.5B in 2023, creating a new record high, per Dealroom data seen by Reuters.

What the numbers say: Venture debt deal value surged in 2023 compared to 2022's tally of $1.7B due to a lack of equity funding availability. Equity fundraising dropped sharply from $130B in 2021 to $62B in 2023, per Pitchbook.

What happened: European lenders are increasingly asking for complex deal terms, with more control and bigger upside. Startups are opting for convertible debt over equity rounds as it helps them defer the valuation repricing to a later date and avoid raising a down round.

Where to see the impact: Digital bank Bunq's CEO Ali Niknam cautions startups that such deals come with huge risks. Niknam adds that founders risk handing over bigger equity stakes to the lenders if the company fails to meet its targets. Additionally, deals can be structured to pressure the startup to go public or raise additional funding rounds from investors. Often, deals come with high interest rates that accrue over time.

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Alibaba Group-backed logistics startup Ninja Van is putting its IPO plans on hold and will only proceed once its profitability improves. CEO Lai Chang Wen expects the firm to achieve EBITDA profitability in the next 12 months. In the meantime, the firm will raise additional funding from investors to continue expanding its business and is prepared to accept a lower valuation.

More:

Ninja Van provides services in six Southeast Asian regions and delivers about 2 million parcels daily.
The firm last raised a $578M Series E funding round in 2021 at a valuation north of $1B.
- Investors participating in the round include Alibaba Group and Facebook co-founder Eduardo Saverin's B Capital Group.
Due to lower margins and intense competition, the firm is slowly pivoting away from its e-commerce business to building logistic capabilities for the B2B segment.
Alibaba's Lazada Group and Shopee are two of its most notable clients.

Swiss climate tech startup Crosstown H2R emerged from stealth with €2M ($2.18M) in grants and subsidies from the Swiss Federal Office of Energy (SFOE) and other investors. The firm will use the capital to accelerate the development of its proprietary technology.

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The decarbonization technology maker is developing technology to convert gas turbines to operate on hydrogen, removing CO2 emissions in the process.
In addition, the company is partnering with Sulzer and Fortum to shift their gas power plants to zero-carbon energy production.
- Crosstown H2R inked a go-to-market partnership with Sulzer, which will provide the startup access to over 3,500 new and existing gas-fired turbines in Europe.
- Additionally, the firm will help reduce gas emissions by half for Fortum's customers by 2030.

Cleantech startup Mission Zero raised £21.8M ($27.7M) in Series A funding. The firm will use the proceeds to further develop its direct air capture technology, which aims to recover 1,000 tonnes of atmospheric CO2. Mission Zero aims to have three systems ready by the end of 2024 to assist projects working on Co2 mineralization, carbon-negative building materials, and sustainable aviation fuel.

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The startup has developed a direct air capture technology that uses electricity and a liquid solution to capture CO2 from the atmosphere in its organic form.
2150 led the funding round with additional participation from the World Fund, Fortescue, Siemens Financial Services, and Breakthrough Energy Ventures.
Mission Zero expects its direct air capture technology to be able to capture a megatonne of carbon dioxide from the atmosphere annually by the end of the decade.

India's antitrust body, the Competition Commission of India (CCI), is probing Google's billing dispute with local startups. Some Indian startups have questioned Google's in-app billing system and said it "is implementing its policies in a discriminatory manner." CCI aims to complete the probe within 60 days.

More:

Indian startups were opposing the 11% to 26% fee imposed on in-app payments.
- The nation's antitrust authorities had previously ordered Google to stop its fee system in 2022.
Earlier this month, Google removed 100 apps from its app store for billing violations.
- It later reinstated the apps after the Indian government intervened in the matter.
Google denied any wrongdoing, claiming that the fee helps keep the Android mobile operating system and Google Play store distribution free.

Quick Hits:

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Satellite startup GuardianSat joined the University of South Florida's Tampa Bay Technology Incubator program.
AI-powered healthtech startup HiLabs secured $39M in Series B funding led by Denali Growth Partners and Eight Roads Ventures.
AI-powered legal contract and negotiation platform DraftWise bagged $20M in Series A funding led by Index Ventures. Existing investors Y Combinator and Earlybird Digital East Ventures participated in the round.
Visa and Mastercard have reached a groundbreaking $5B settlement, reshaping the landscape of financial transactions as we know it.*

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