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.