July’19 Startup Funding

During the month of July, 21 technology startups took in mega-rounds of $100 million or more. Those companies together received more than $7.5 billion.

On the other end of the financing spectrum, dozens of startups got seed funding or a Series A round. The dollar amounts were much smaller. Still, they are the beating heart of entrepreneurship around the world.

It also was a month when some funders got a lot more money to spread around. The second iteration of the SoftBank Vision Fund raised around $108 billion, with Apple, Foxconn, and Microsoft among the investors in SVF2.

And there are many reports of some well-funded startups about to get a mega-round.

Automotive and mobility startups were a significant segment during July, as were cybersecurity firms and service providers. Artificial intelligence, agriculture technology, semiconductors, and robotics snagged dollars, too. There were at least 25 software startups getting funded in July. Add another 15 companies offering varying types of platforms, which are software-centric in many cases.

Pittsburgh-based Argo AI was a leading beneficiary of the recent collaborative technology deal between Ford Motor and Volkswagen Group. VW is investing $1 billion in the self-driving car startup, while combining its autonomous vehicle unit, valued at $1.6 billion, with Argo AI. The German automotive manufacturer is also buying $500 million worth of stock in Argo AI from Ford, valuing the whole transaction at $3.1 billion.

“By expanding an existing alliance, the deal allows two of the world’s largest automakers to collaborate on the most expensive pieces of technology in a rapidly changing global auto industry. It also provides an important validation for Argo, now valued at more than $7 billion,” Joann Muller wrote for Axios.

There were just a handful of AI startup investments during July, yet one of them was a doozy. Microsoft committed to investing $1 billion in OpenAI, an AI lab established in 2015 by Sam Altman of Y Combinator and Tesla CEO Elon Musk. The Tesla founder has since moved on to his own AI project at the electric vehicle manufacturer. Microsoft’s investment will stretch out over a decade or more. Altman has transformed OpenAI from a not-for-profit organization to a for-profit company, eligible for seeking other private funding. OpenAI is addressing what is called artificial general intelligence, emulating how the human brain works.

Next down the list of mega-rounds is Toyota Motor’s $600 million investment in Didi Chuxing Technology, the giant Chinese provider of ride hailing, food delivery, and other services. The companies plan to set up a joint venture. Didi Chuxing has received total private funding of $21.2 billion, according to Crunchbase.

Following is about €500 million (around $557.8 million) for FlixMobility, which offers the low-cost FlixBus service in Europe and the United States, and which has branched out to train service, too. TCV and Permira, two private equity firms, led the Series F round of funding. FlixMobility is now valued at more than €2 billion, or approximately $2.23 billion. The company is launching its mobility application and platform next year in Asia and South America.

Ola Electric Mobility, which leases EVs, raised about $250 million in Series B funding from SoftBank. The company was part of the Ola ride-hailing concern, which competes with Uber Technologies in India for that service. Ola Electric received about $56 million in private funding earlier this year, led by Tiger Global Management and Matrix India.

San Francisco-based Turo, which offers a peer-to-peer car sharing service, received $250 million in funding from IAC/InterActiveCorp, valuing the startup at more than $1 billion.

OneTrust, which has headquarters in Atlanta and London, along with four other offices around the world, raised $200 million in Series A funding led by Insight Partners. The startup provides software to navigate data protection and privacy policies, internally and with customers. Established in 2016, OneTrust is now valued at $1.3 billion.

Automotive/Mobility
In addition to Argo AI, Didi Chuxing, FlixMobility, and Ola Electric, automotive and mobility startups enjoyed wealthy weeks.

San Francisco-based Luminar Technologies was among the 15 or so startups funded in July. The LiDAR sensors and software technology startup raised $100 million from existing and new investors. The company came out of stealth mode in 2017 with $36 million in venture funding from 1517 Fund, Canvas Ventures, and GVA Capital. The latest round brings the startup’s total private funding to $250 million. Participating in the new funding were G2VP, Crescent Cove Advisors, Octave Ventures, Moore Strategic Ventures, The Westly Group, GoPro founder Nick Woodman, and strategic investors Corning, Cornes, and the Volvo Cars Tech Fund. Luminar debuted its $1,000 Iris system, developed in collaboration with Audi’s Autonomous Intelligent Driving spinoff.

Japan’s Tier IV received more than $100 million in Series A funding led by Sompa Japan Nipponkoa Insurance, joined by Yamaha Motor, KDDI, JAFCO, and Aisan Technology. The startup is developing a self-driving technology platform. Tier IV has almost $130 million in private funding.

Wind Mobility, the European micromobility startup based in Barcelona and Berlin, raised $50 million in Series A funding by existing investors Source Code Capital and HV Holtzbrinck Ventures, which put $22 million into the company eight months ago. Wind Mobility pivoted from bicycle rentals to renting electric scooters. In addition to several European countries, the company offers its e-scooters in Israel, Japan, and South Korea.

Another European micromobility startup, Dott, received €30 million (about $33.45 million) in Series A funding from EQT Ventures, Naspers Ventures, Axel Springer, Felix Capital, FJ Labs, U-Start Club, and angel investors. Dott will use the money for development and deployment of e-bikes and e-scooters.

Tel Aviv-based UVeye raised $31 million from Toyota Tsusho, Volvo Cars, and return backers W. R. Berkley and F.I.T. Ventures. The startup offers drive-through vehicle inspection software, incorporating AI and computer vision.

Karem Aircraft received $25 million in Series A funding led by Hanwha Systems, a Korean industrial conglomerate. The money is going to the company’s air-taxi spinoff. Karem last year partnered with Uber Air, which is taking to the sky to move folks faster than ground vehicles can.

Recogni took in $25 million in Series A funding for its vision-oriented AI platform, meant for use in autonomous vehicles. Great Point Ventures led the financing, with participation by Toyota AI Ventures, BMW i Ventures, Faurecia, Fluxunit (venture-capital arm of OSRAM), and DNS Capital. With its headquarters in San Jose, Calif., and operations in Munich, Germany, the startup was established in 2017 and just came out of stealth mode.

Shanghai-based ZuMong Technology raised $14.5 million in Series C funding led by Qualcomm Ventures, with participation from Lenovo Group’s Legend Capital and Chuangtu Investment. The startup is working on driver-assistance systems, incorporating vehicle cameras.

SmartE, a provider of electric mobility services in India, received about $14.5 million in Series B funding led by Mitsui & Co. Founded in 2014, the startup will use the new funds to expand its fleet in multiple regions of India, while boosting its charging infrastructure network, which offers plug-in vehicle battery charging and battery-swapping services.

Pittsburgh-based RoadBotics raised $7.5 million in Series A funding. The round was led by Radical Ventures, with participation from Hyperplane Venture Capital and Wharton Alumni Angels of Silicon Valley. The startup was spun out of Carnegie Mellon University’s Robotics Institute in 2016. It provides road assessment with AI and computer vision technology.

Voyant Photonics of New York City, a LiDAR startup, received $4.3 million in Series A funding from Contour Venture Partners, LDV Capital, and the Defense Advanced Research Projects Agency (DARPA).

Intecells of West Bloomfield Township, Mich., raised Series A funding from Walden International and Plasmatreat GmbH to continue development of its solid-state lithium-ion battery manufacturing technology. The amount of funding wasn’t disclosed. The startup was founded in 2017.

Cybersecurity
Investor interest in cybersecurity startups cooled off a bit in July, with about a dozen companies getting new funding.

Menlo Security of Palo Alto, Calif., received $75 million in Series D funding led by clients advised by JP Morgan Asset Management, joined by existing investors including General Catalyst, Sutter Hill Ventures, Osage University Partners, American Express Ventures, HSBC, JP Morgan Chase, and Engineering Capital. The startup specializes in cloud security, employing what it calls Internet Isolation technology. Menlo Security isolates more than 500 million websites. Its customers include big banks and credit-card issuers, along with energy and transportation enterprises, and the Defense Information Systems Agency, part of the Department of Defense.

San Francisco-based TrustArc (formerly known as TRUSTe) raised $70 million in Series D funding led by Bregal Sagemount, bringing its total raised to more than $100 million. Existing investors Accel Partners, Baseline Ventures, DAG Ventures, Icon Ventures, and Industry Ventures also participated. TRUSTe was established in 1997. TrustArc provides certification, compliance, and data protection tools, along with privacy management software.

Trinity Cyber of Bowie, Md., pairs adversary interference with detection to ward off cyberthreats. The startup emerged from stealth with the announcement of $23 million in venture funding from Intel Capital and leading institutional investors. It works through a software-as-a-service platform.

San Jose-based TrapX Security received $18 million in Series C funding led by Ibex Investors, with participation by existing investors Strategic Cyber Ventures, Liberty Israel Venture Fund, Intel Capital, BRM Group, and Opus Capital, bringing its private funding total to $47.7 million. The startup, founded in 2012, has tools to detect cyberattacks in real time, using its flagship DetectionGuard offering. DetectionGuard provides decoys that seem like databases and workstations, common targets for hackers.

DefenseStorm of Alpharetta, Ga., raised $15 million in Series A funding led by Georgian Partners. The startup provides a cloud cybersecurity and cybercompliance management platform to banks and credit unions.

Palo Alto-based Confluera is another real-time cybersecurity startup. It just picked up $9 million in Series A funding led by Ravi Mhatre, founder and managing partner of Lightspeed Venture Partners. Also investing were John W. Thompson, former CEO of Symantec and chairman of Microsoft; Frank Slootman, former CEO of ServiceNow; and Lane Bess, former CEO of Palo Alto Networks.

DataGrail of San Francisco received $5 million in Series A funding led by Okta Ventures. The startup provides compliance software for digital privacy regulations, such as the European Union’s General Data Protection Regulation (GDPR).

Tel Aviv-based Cervello raised $4.5 million in seed funding led by North First Ventures and Awz Ventures, with participation by Nissim Bar-El, founder of Comsec Consulting. The startup serves railroads and metropolitan companies with real-time intelligence, forensics, and visibility on their fleets.

Ethyca of New York City received $4.2 million in seed funding led by IA Ventures and Founder Collective. Table Management, Sinai Ventures, Cheddar founder Jon Steinberg, and Moat co-founder Jonah Goodhart also invested. The startup offers a data platform that can discover sensitive data, and then gives customers the ability to see, edit, or delete their data. This helps enterprises comply with the GDPR.

Odds and ends
The Boring Company, Elon Musk’s transportation tunneling venture, raised $120 million in venture funding, bringing its total private funding to $233 million, per Crunchbase. The first outside investment round in the company carries a pre-money valuation of $800 million. The investors reportedly include 8VC, Vy Capital, Craft Ventures, Valor Capital, and Steve Jurvetson’s Future Ventures.

Germany’s Sennder, which offers a platform and a marketplace linking commercial shippers with smaller freight carriers, received $70 million in Series C funding led by Lakestar, with participation from Accel, HV Holtzbrinck Ventures, Project A, Siemens’ Next47 fund, H14, and Scania Growth Capital. Founded in Berlin in 2016, the startup describes itself as a “digital road freight forwarder.” The company is now valued at roughly $300 million.

San Francisco-based Standard Cognition raised $35 million in Series B funding led by EQT Ventures, joined by existing investors Initialized Capital, CRV, and Y Combinator. The new funding carries a post-money valuation of $535 million. The autonomous checkout startup has more than $86 million in total private funding.

Paragraf of Cambridge, U.K., received £12.8 million (about $15.56 million) in Series A funding led by Parkwalk Advisors. The Cambridge University spinout previously booked $3.9 million in seed funding. Also participating in the new round are IQ Capital Partners, Amadeus Capital Partners, and Cambridge Enterprise, the university’s commercialization arm. Founded in 2015, the company is developing and marketing graphene-based electronics products, starting with a super-high-density magnetic field detector.

Framingham, Mass.-based Dust Identity raised $10 million in Series A funding led by Kleiner Perkins, joined by Airbus, Lockheed Martin, New Science Ventures, Angular Ventures, and Castle Island Ventures. The supply chain security and tracking startup employs diamond dust to coat an object, giving it unique tagging properties.

Upcoming funding rounds
Udaan of Bangalore, India, is putting together a round of about $500 million, The Economic Times reports, citing people privy to the deal talks. Existing investors Lightspeed Venture Partners and DST Global are reportedly leading the new round, which would value the business-to-business online marketplace at $2.2 billion. The round may involve new investors, such as Hillhouse Capital and Altimeter Capital.

Bangalore-based Swiggy, a food delivery service, is also said to be wrapping up a $500 million round that would value the company at around $4 billion. Naspers Ventures and Tencent Holdings are expected to lead the funding, with possible participation by Korea Investment Partners, Mirae Asset Management, STIC Investments, and Neoplux.

Bird, the e-scooter company, is raising Series D funding of $200 million to $300 million, led by Sequoia Capital, which invested $300 million in June’s Series C funding, The Information reports. The new funding would value the micromobility venture at $2.2 billion. Bird declined to comment on the reports.

DataRobot has raised $200 million in Series E funding to advance its automated AI and machine learning software, Xconomy reports, citing sources with knowledge of the investment. Sapphire Ventures is said to be leading the new round; it led the $100 million Series D funding round last year, along with Meritech Capital. The startup was founded in 2012.

Mystery round du jour—Visa invested in Go-Jek, the Indonesian provider of ride hailing and other services, without disclosing the amount involved. The funding is part of the startup’s continuing Series F round. Go-Jek launched in 2011.

Money makes the world go ‘round
The SoftBank Vision Fund 2 includes $38 billion invested by SoftBank itself. Other investors include financial institutions in Japan and the sovereign wealth fund of Kazakhstan. China Renaissance Holdings reports raising more than 6.5 billion yuan ($945 million), which will be invested in China by Huaxing Growth Capital, its private equity arm. Joy Capital, the financial backer of Luckin, Mobike, NIO, and other Chinese startups, has raised $700 million to invest in early-stage to growth-stage companies. Cambridge-based IQ Capital raised $300 million to invest in AI/ML startups. Israel’s Maniv Mobility raised $100 million to invest in early-stage mobility startups in Israel and around the world.

Conclusion
Even in the summer, investors are pursuing deals. The old Wall Street adage of “sell in May and go away” long ago lost its relevance in finance.

Prior Startup Funding Reports
June’19 Startup Funding
Fifteen startups raised mega-rounds in June.
May’19 Startup Funding: Mega-Funding Rounds Continue
Startups revel in investments of billions of dollars.
April’19 Startup Funding: Corporate Gushers
Money pours into startups with more big investments on the way.
March’19 Startup Funding: Money Springs Forth
The SoftBank Vision Fund figures in some of the biggest rounds in the month.
February’19 Startup Funding: Big Cash Keeps Rolling In
A month with a trio of billion-dollar rounds.
January’19 Startup Funding: $100M+ Rounds Abound
Billion-dollar funding rounds become more common.
December’18 Startup Funding: Big Rounds As 2018 Ends
Mobility pulls in half of the $100M-plus funding rounds.
November’18 Startup Funding: Big Deals Dominate
Nine-figure funding rounds were common in November.
October’18 Startup Funding: IoT, Security, Auto
Funding flows to a variety of startups; M&A in security