Automotive tech startups get $402 million in April

Private equity investors and other funders put in at least $402 million in automotive-related startups in April, up 2 percent from the $394.1 million invested in March.

The slight increase in deal activity may be a sign that investment in the automotive startup space is stabilizing. Investment in American automotive startups fell to $690.5 million in February from $1.16 billion in January.

But the sector may be facing funding demands from one of the hottest areas of technology, generative artificial intelligence companies that are emulating ChatGPT, according to a Pitchbook analyst.

Financial services firm PitchBook, which tracks venture capital mobility deals globally, saw 70 deals in April, 57 in March and 75 in February, Jonathan Geurkink, senior analyst on PitchBook's emerging technology research team, told Automotive News.

"March kind of dipped with some of the chaos surrounding Silicon Valley Bank, but it feels a bit like things are normalizing," Geurkink said. "I also still think it's a pretty volatile environment. There's lots of questions about the economy going forward, and there's just a lot of investors sitting on their hands right now."

Geurkink said the massive flow of money into generative AI companies could also be taking away investment funds from the mobility sector and startups in other industries.

"It's kind of sucking some oxygen out of the room for other startups that need attention and dollars," Geurkink said.

Transit-technology startup Via Transportation attracted a little more than half of April's investment funds by pulling in $200 million from Exor, an Amsterdam holding company controlled by the family of Fiat founder Giovanni Agnelli. Via, of New York, provides a software platform that public transportation systems can use to integrate on-demand shared rides.

Via's investment is the fifth-largest deal in 2023, according to data compiled by Automotive News. In January, General Motors committed $650 million to Lithium Americas Corp. to develop the Thacker Pass lithium mine in Nevada, making it the largest investment so far in 2023.

Buoyed by the federal government's industrial policy and incentive programs, battery and energy storage investments continue to make up a large portion of those bets.

Battery technology investments made up 18 percent or $73.8 million of the total funds committed to automotive-related startups in April.

General Motors Ventures led a $50 million funding round in EnergyX, an Austin, Texas, company developing technology that can extract lithium from brine water. EnergyX says its technology can extract lithium metal directly from brine and potentially refine it to make materials for electric vehicle batteries.

Nanoramic Laboratories, a startup spun out of the Massachusetts Institute of Technology, completed a $21 million funding round in debt and equity from GM Ventures and other investors April 20, according to data compiled by PitchBook, Geurikink said. The Wakefield, Mass., company develops energy storage technology and materials for EV batteries.

Battery testing startup Liminal received a $2.8 million grant from the California Energy Commission.

Spring Free EV, a San Francisco financing platform that small and mid-size business owners can use to electrify their fleets, raised $31 million in debt and equity in a series A funding round. Boston's Spring Lane Capital led the funding round.

Spring Free EV says it plans to use the funds to double the number of EVs it finances by the end of 2023 and expects to have tens of thousands of vehicles on the road by 2025.

The company sells a pay-per-mile subscription model to businesses that want to use EVs. Spring Free EV's pitch is that it reduces the high upfront cost of electrifying fleets and eliminates high-mileage lease fee penalties that are expensive for commercial fleets driving long distances. Spring Free EV also advises customers on how to take advantage of EV tax benefits and provides telematics and institutional-grade asset management, which it claims makes EV fleets more cost-effective than owning a fleet that runs on gas.

Glass manufacturer 3D Solutions closed its series C $30 million funding round led by Walden Catalyst Management of San Francisco. The Albuquerque, N.M., company makes glass ceramic technology used in automotive radar and other industries. It plans to use the funds to increase its manufacturing capacity in the U.S. Other investors in the funding round include Intel Capital and Lockheed Martin Ventures.

Mojo Vision, originally an augmented reality smart contact lens maker in Saratoga, Calif., raised $22.4 million in series A funding after deciding to focus on micro-LED displays for the automotive, light field display and large format display markets.

The funding round was led by existing investors, New Enterprise Associates and Khosla Ventures, both of Menlo Park, Calif. Other funders include Dolby Family Ventures, Liberty Global Ventures, Fusion Fund, Drew Perkins, Open Field Capital and Edge.

Superior Automotive Group Inc., an auto dealer in Fayetteville, N.C., raised $10 million for its series A preferred equity offering through mortgage company Greenlight Commercial Funding. Superior Automotive plans to use the funds to offer employment and internships to local college and high school students and expand its services.

Repowr, an online marketplace in Birmingham, Ala., for under-used transportation equipment and fleet trucks, raised $8 million in its series A funding round led by mobility-focused UP.Partners. Other investors included Crowley Maritime, Koch Disruptive Technologies, McVestCo VC, NFI Ventures, Perot Jain and 9Yards Capital.

Cincinnati's Frayt, a last-mile on-demand delivery and logistics platform, closed its $7 million Series A funding round, led by Refinery Ventures, also out of the Queen City. Other participants in the round include Capital Midwest, Venture 53 and the JobsOhio Growth Capital Fund. Frayt plans to use the funds to expand and grow its leadership team.

Rinsed, a customer relationship management platform for car wash companies in New York City, raised $20 million in Series B financing from the United Kingdom's VMG Technology. The company plans to use the funds to expand its operations.