The 10 Biggest Rounds Of October: LanzaTech Locks Up $500M, Form Energy Powers Up With $450M
November 2, 2022
This is a monthly feature that runs down the month’s top 10 funding rounds in the U.S. Check out last month’s edition here.
September saw a couple of $1 billion rounds lead the way. However, the rounds were smaller in October, as cleantech and energy saw big raises but not at the billion-dollar level. Just like September, however, biotech played a starring role as investors kept the faith despite the sector’s typically long product development cycle.
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Here’s a quick review of the top 10 rounds of October:
1. LanzaTech, $500M, cleantech:Cleantech continues to hold investor interest, especially cleantech companies that deal in carbon. Illinois-based carbon recycler LanzaTech locked up the biggest round last month, closing a $500 million commitment from Brookfield Renewable to finance upcoming projects using its technology. The deal size could double if certain milestones are met. The company’s tech takes the carbon out of emissions and converts it into things such as sustainable fuels and material. Founded in 2005, the company has now raised more than $800 million, according to Crunchbase data.
2. Form Energy, $450M, energy:One of the biggest problems with wind and solar energy is that both are intermittent, and lithium-ion batteries can only store energy for so long. Enter iron-air batteries, which can store energy longer and promise to be cheaper. That obviously is what TPG Rise is betting on, as it was the lead investor in a new $450 million round for Massachusetts-based Form Energy. The round also included investments from others, such as Bill Gates’ Breakthrough Energy Ventures. The 5-year-old startup plans to use the new funding to build a manufacturing facility for its batteries and ramp up production. Founded in 2017, the company has raised nearly $820 million, according to Crunchbase.
3. Arctic Wolf, $401M, cybersecurity: Convertible notes could become more en vogue as the venture capital pullback continues. Last month, Eden Prairie, Minnesota-based Arctic Wolf went that route. The managed security provider raised $401 million in convertible notes led by existing investor Owl Rock. Convertible notes work like a short-term loan, but these notes are repaid to the investor at a later point in equity — i.e. after an IPO — typically at a discount, and can also include an interest rate. Arctic Wolf raised $150 million in a Series F in July 2021, taking the company’s valuation from $1.3 billion to $4.3 billion. At that time, then-CEO Brian NeSmith saidan IPO was likely the next logical move. However, that was a much different time. Founded in 2012, Arctic Wolf has raised nearly $900 million, according to Crunchbase data.
4. Skydance Media, $400M, media:Private equity giant KKR must have liked “Top Gun: Maverick.” The PE firm made a big $400 million strategic investment last month in Skydance, the production house behind the summer blockbuster. The Santa Monica, California-based media company produces content around films, animation, television and video games. The minority investment, which values Skydance at more than $4 billion, will help the company grow in both sports and interactive entertainment as well as other verticals. Founded in 2010, the company has raised $675 million, according to Crunchbase.
5. Treeline Biosciences, $261M, biotech: Not much is known about Stamford, Connecticut-based Treeline Biosciences — other than it can raise cash. The oncology company spearheaded by big names in biotech raised $261 million in new funding, according to STAT News. The startup was founded by oncology veteran Josh Bilenker, who previously worked in the oncology division of the Food and Drug Administrationbefore founding another biotech company Loxo Oncology, which sold for $8 billion to pharma giant Eli Lillyin 2019. Treeline has raised around $473 million in total, according to STAT News’ reporting on SEC filings. Investors include Rock Springs Capital, OrbiMed, Access Industriesand ARCH Venture Partners. Even with all that cash, Treeline has yet to announce any solid drug candidate.
6. (tied) Ascend Elements, $200M, batteries: It was quite the October for Westborough, Massachusetts-based Ascend Elements. Early in the month, the lithium-ion battery recycler received $480 million via two Department of Energy grants. Then just last week, the startup closed a $200 million Series C led by Fifth Wall Climate, which also included a $100 million debt facility. That’s a lot of cash in a month. The company plans to put it to good use, as it will look to commercialize its recycling process that could cut down on the raw material shortage the EV market currently faces. It is also building a $1 billion sustainable lithium-ion battery materials facility in Kentucky. Founded in 2015, Ascend Elements has now raised more than $920 million, according to Crunchbase data.
6. (tied) Sequoia Financial Group, $200M, wealth management:Akron, Ohio investment adviser firm Sequoia Financial Group sold a minority stake to private equity firm Valeas Capital Partners for $200 million. Sequoia provides wealth management, asset management and financial planning services to clients ranging from individuals to family offices. Sequoia — with approximately $10 billion in client assets — plans to use the capital to continue to expand organically and inorganically. Two years ago, New York-based Kudu Investment Management also made a minority investment in Sequoia.
6. (tied) Solugen, $200M, chemical: As stated earlier, cleantech is big right now. Houston-based Solugen was another company that was able to raise big, as the chemical startup closed a $200 million round last month, the company told Bloomberg. The company is expected to take in more than $100 million this year and is valued at around $2 billion, per the report. Solugen has created a process that makes chemicals out of sugar and corn syrup, replacing other industrial processes that require fossil fuels. The company sells to businesses in agriculture, defense and cosmetics. The clean energy space has seen around $4.1 billion pumped into the industry this year, putting it on pace to match last year’s $5.6 billion, per Crunchbase data. The 6-year-old company has raised $635.2 million to date, according to Crunchbase.
9. OpenWeb, $170M, social: New York-based OpenWeb says it is trying to build a “healthy, social layer of the internet.” God knows that would be helpful right now. Apparently investors think so too, as the community engagement platform startup raised a $170 million Series F led by Georgian that valued the company at $1.5 billion. Originally founded in Israel, OpenWeb helps large publishers and brands build direct relationships with their audiences. The startup began as a platform for readers to give comments, but now offers other features that include polling and data-management tools. Not sure that’ll really help social interactions be more civil on the internet, but at this point pretty much anything would be better. Founded in 2015, OpenWeb says it has raised $393 million to date.
10. Odyssey Therapeutics, $168M, biotech: Developing drugs is big business, for both biotech firms and investors. Boston-based Odyssey Therapeutics closed a $168 million Series B led by General Catalyst. Odyssey is developing precision immunomodulators and oncology medicines to treat serious human diseases. The company’s drug discovery engine uses AI and machine learning for molecular design, a functional genomics platform for target discovery, and other proprietary tech. Founded last year, Odyssey has raised nearly $386 million, according to the company.
Big global deals
Although U.S.-based startups raised some large rounds, the biggest of the month went to a China-based EV company.
- GAC Aion New Energy Automobile, which has five different EVs in the market, raised a Series A worth approximately $2.5 billion.
We tracked the largest rounds in the Crunchbase database that were raised by U.S.-based companies for the month of October. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the month.
Illustration: Dom Guzman