SpaceX鈥檚 valuation hit in December following a closely watched secondary share sale. In that transaction, the company and investors agreed to buy $1.25 billion in stock from insiders at $185 a share.

These days, a share of Hawthorne, California-based SpaceX on private share marketplace is valued higher, at around $229. 鈥嬧��1聽That kind of rise in months following a large tender offer isn鈥檛 unusual, as such offerings commonly set a price floor for subsequent, smaller share trades, said , head of data and investment solutions at Forge.

SpaceX vs Tesla

The contrast between public and private market trendlines for Musk- and spacetech-related assets is dramatic.

In the roughly three months since SpaceX鈥檚 tender, shares of Musk-led soared to an all-time high around $489 per share before nosediving to around $220 on Monday.

Falling sales in China and multiple European markets contributed to the selloff. We鈥檙e also seeing backlash from much of Tesla鈥檚 former and prospective U.S. customer base regarding its CEO鈥檚 political activities.

After Monday鈥檚 selloff, Tesla shares rose some in Tuesday trading, after President on shortly after midnight that he would buy a new Tesla as 鈥渁 show of confidence and support for Elon Musk, a truly great American.鈥� (Stocks were up for many beaten-down names from the prior day鈥檚 selloff, so it鈥檚 unclear whether this was a contributing factor.)

Spacetech fell on public markets too

Publicly traded spacetech companies have also been up and down.

Shares of , a provider of launch services and satellite design, hit an all-time high in January and have since shed around 40% of their value. Another prominent spacetech company, , saw its stock tumble this week after its lunar lander ended up on its side in a crater.

Of course, the most visible spacetech disaster of late involved SpaceX. The company suffered a major setback to its interplanetary ambitions when its giant Starship rocket in space last week minutes after liftoff in Texas, raining debris and bringing a temporary halt to air traffic in parts of Florida.

Starship has launched twice this year, and blew up on both occasions.

If SpaceX were a publicly traded company, one would expect share prices to decline following such a setback. Private markets, however, don鈥檛 exhibit the same kind of rapid valuation shifts in response to breaking news. In a bad week for major indices, this appears to be one of the advantages of staying private.

That said, private company valuations do eventually decline if performance falters or pessimism around their future prospects grows. During the 鈥済reat reset鈥� after the market peak in late 2021, the median company on Forge鈥檚 platform saw a 24% valuation drop from its last primary funding round.

SpaceX, however, has been moving higher pretty consistently. The $350 billion valuation mark it hit in December represented a 67% surge from the previous high of , which the company reportedly achieved in a June secondary share sale.

Of late, SpaceX has been known for generally holding buyback events twice a year, in which it purchases shares from employees. If it does so again this summer, we can expect an updated valuation that reflects investors鈥� latest presumptions about its future potential.

Illustration:

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The firm’s debut fund closed out at $180 million in October 2017.

M33 Growth is led by co-founding managing directors , and .

Prior to M33 Growth, Shortsleeve was a managing director at and served stints in leadership and directorship roles at the Massachusetts Department of Transportation and the . Ling is also an alumnus of General Catalyst, where he served as partner for 13 years prior to starting M33 Growth.

Anello was a senior associate in General Catalyst’s growth equity group and, between 2013 and 2017, co-founded a travel booking startup, worked on the special projects group at , worked with , and served in board and leadership roles at a number of other companies.

The firm employs 15 people at its Boston headquarters.

M33 Growth is broadly focused on technology and health care, but there is notable variance in its investments.

The firm states in its press release that it “invests growth capital and applies its deep operational experience to optimize go-to-market teams and execute on strategic acquisitions.”

鈥淢33 Growth was founded to fuel the growth of the next great success stories in American business,鈥� said Shortsleeve in the press release announcing Fund II. 鈥淲e seek to partner with scrappy founders who have built great companies by bootstrapping their way to profitability and are looking for a partner to help them accelerate growth. Our second fund marks not only the next milestone for our firm, but also a tremendous platform to continue to expand the sales and go-to-market expansion and strategic sourcing platform that we believe will drive growth in our companies.鈥�

The lists a number of its current and prior portfolio companies. M33 Growth’s current portfolio consists of , RHI Group, , and W Energy Software.

The firm says that AssuriCare provides software and services which helps to minimize “fraud, waste, and abuse in the long-term care industry.”

RHI Group is in the business of investing in and partnering with traditional retailers to help them market themselves more effectively. M33 Growth is currently co-invested, alongside RHI Group, in and previously co-invested in (acquired by ) and (acquired by ).

The Oncology Institute operates cancer treatment centers which also offer patient and family services like financial, dietary and end-of-life counseling.

Titan Cloud offers retailers in the fuel industry the ability to monitor inventory levels and delivery scheduling, manage their facilities, and track exposure to and compliance with environmental regulations. And, in a similar vein, W Energy Software provides cloud-based enterprise resource planning software to “upstream and midstream oil and gas companies.”

In addition to Datalogix and Index, M33 Growth’s prior portfolio includes , , , , , , and .

Illustration: .

From ride-hailing apps to driverless car technology, transportation startups have attracted unprecedented sums of investment capital from auto manufacturers in recent years. In the past few quarters, that trend has been accelerating.

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An analysis of SA国际传媒 data shows that since the beginning of 2019, the world鈥檚 largest car and truck manufacturers have led financing rounds valued at more than $6 billion. Over that period, they鈥檝e participated in more than 50 deals for several million dollars and up, indicating an expanded willingness to pump significant sums into rounds.

鈥淚t has been a continuation of the trends for many of the automakers that have been particularly active over the past few years,鈥� said , a partner at Detroit-based transport venture firm . 鈥淚n 2019 and 2020, however, it has been interesting to see a few automakers鈥攑articularly those in Asia鈥攁ggressively ramping up their innovation efforts.”

Below, we take a more detailed look at where Big Auto is putting its capital, which companies are spending the most and where the current investment path is headed.

Hot Sectors, Big Rounds

First, let鈥檚 look at where the money鈥檚 going. The sectors driving away with the largest sums of automaker capital include autonomous driving technology, electric cars, batteries and ride-hailing.

We break out the largest funding recipients in Big Auto-led rounds in the chart below. (See full list of.)

For the most part, the same subsectors have been attracting automaker interest for years, but the funding dynamics have changed some in recent quarters.

In particular, we鈥檙e seeing more partnerships and joint investments involving multiple automakers. Examples include 鈥檚 participation in a $1.15 billion May round for 鈥檚 self-driving unit, , and Volkswagen鈥檚 $2.6 billion round for -backed .聽 Even longtime rivals and BMW are teaming up by launching a .

鈥淚鈥檓 not sure 5 to 10 years ago we would have imagined Ford and Volkswagen coming together to collaborate on electric and autonomous vehicles, or Daimler and BMW鈥檚 collaboration on mobility services,鈥� Stallman said.

However, as the true cost of launching electric and autonomous vehicles鈥攁nd competing against and on mobility services鈥攈as come into greater clarity, these partnerships make quite a bit of sense.

Another broad trend is a move toward components developers. The years 2016 to 2018 were active for acquiring full-stack autonomous vehicle technology companies, Stallman noted. But more recently, automakers are turning their attention to enabling and component technologies that align with in-house architectures. This isn鈥檛 broadly reflected in the largest deals chart above, but looking at a , it鈥檚 a more visible trend.

Most Active Investors

There鈥檚 wide variation among automakers in startup round counts. Several are, on average, participating in more than one sizable deal a month. Others are more sporadic.

Below, we take a look at the most active by deal count since the beginning of last year:

One key takeaway is that we鈥檙e seeing more startup capital coming from large auto manufacturers in Asia.

in particular has upped its game. The Korean auto giant wasn鈥檛 much involved in the startup space before 2017, according to SA国际传媒 data. In the last few years, however, the company has backed at least 35 rounds, including 18 since the beginning of 2019.

, meanwhile, tied with BMW as the second most active investor. The count for Toyota included several supergiant rounds of $100 million.

It鈥檚 also worth pointing out companies not in the rankings. , for instance, hasn鈥檛 been doing much startup investing, presumably preferring to innovate in-house. is also not active in venture-stage investing, nor are France鈥檚 or Japan鈥檚 and .

The Road Ahead

While automakers did a lot of startup investing in 2019, they didn鈥檛 do much acquiring.

There were a few deals: Honda bought Drivemode, a Silicon Valley developer of smartphone apps for drivers, in its first startup acquisition to date; Tesla snapped up , a computer vision startup; and PSA Group acquired , a platform for car rentals and parking it had previously backed.

Big Auto is, however, increasingly competing with Big Tech in the transport space. Just last week, for instance, bought , a developer of technology with applications in the automotive space, and over the summer picked up , a developer of autonomous driving software. also has made some transport acquisitions, as have Uber and other ride-hailing players.

Interest from Big Tech is a concern, as the most valuable technology companies are worth many multiples more than the biggest automakers, making M&A an unlevel playing field.

That said, automakers鈥� investment activity shows they鈥檙e serious about keeping abreast of innovation in spaces that impact them by putting more money than ever toward stakes in startups, even if they鈥檙e not buying them whole.

Main photo courtesy of Florian Steciuk via Unsplash.

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That didn’t last. Tesla-challenger NIO has been on a tear since, climbing from its IPO price of $6.26 per share to a staggering $12.10 at the time of writing. That’s nearly a doubling in less than a week of trading.

Shares of NIO spiked around 75 percent yesterday, and today kept running afoul of volatility rules :

Shares of Nio Inc. are down 6% in volatile Friday morning trading. The stock was up as much as 19% and down as much as 21%. Trading was halted for volatility twice since the open.

That’s pretty amazing. What the hell is going on?

NIO’s IPO was a risky bet. The company had little history of revenue generation and lots to prove when it comes to manufacturing, marketing, and support. To see the company IPO at all was a testament to market bullishness regarding transportation companies and high-growth tech shares.

But for NIO, forced to price a single penny above the bottom of its range, to effectively double during its first week of trading is simply odd. We’ll find out more in time, of course, but something’s going on. CNN that other Chinese companies that went public on American exchanges had a good day yesterday as well, but the connection isn’t yet clear.

It’s been an earnings season . But the third quarter run isn’t over. This week both and will report recent financial performance. And there are a few IPOs on deck to boot.

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So let’s quickly get our minds around the upcoming market signals that will help set sentiment during the rest of the third quarter. Bear in mind that great reports from Microsoft, Alphabet, and Amazon have been contrasted by nasty reactions to Twitter, Facebook, and Netflix’s own quarterly reports.

The could be melting.

Regardless, here’s your micro cheat sheet of what to keep in mind over the next five days:

• Apple earnings on Tuesday.听滨迟 “typically the least exciting period for Apple,” but the company’s聽report will include a host of mind-bending numbers. Investors revenue $52.3 billion in the period, including 42 million iPhones sold. The street also $2.16 in per-share profit, up from $1.67 in the year-ago quarter.
• Square earnings on Wednesday.聽Square has been a public-market rocket ship. Its arc has been hot. Now Square has to keep the streak alive. Investors $0.12 in per-share profit and revenue of $367.9 million. We’ll see if Jack’s other project can avoid a 20 percent correction.
• Tesla earnings on Thursday.聽This is the week’s real goat rodeo. Everyone in tech 补苍诲听finance will have their eyes glued to the Musk Show, which, after all, is either going to skyrocket and turn profitable this year () or . Either way, investors are just under $4 billion in revenue and a loss of around $2.81 per share.
• Sonos IPO on Thursday.聽The venerable Sonos is hoping to get out while the market is welcoming. Not a bad idea. The hardware company’s debut will give us another quick check on the state of the IPO market that has welcomed the聽odd Bloom Energy offering and an聽awkward Domo flotation.聽(Catch up on our prior coverage here.)
• The Arlo Technology offering. I am proud to report that SA国际传媒 News has so far produced a full 55 words on the matter. We’ll have a quick primer up when it prices, so don’t worry about being behind.

Of course, other companies will report their second-quarter results and news will crop up. But the above should give you a bit of a map to the end of the first month of the third quarter. Good luck!

From The聽:

Bitmain Technologies, the world鈥檚 largest cryptocurrency mining company, is reportedly considering an initial public offering in Hong Kong or an overseas market with U.S. dollar-denominated shares. Beijing-based聽聽is also said to be raising further cash at valuation around $14 billion.

Chip designer ARM Holdings has agreed to buy analytics provider聽for around $600 million, according to a Bloomberg story citing unnamed sources. Silicon Valley-based Treasure, founded in 2011, previously raised $54 million in venture funding.

Startups vie to disrupt homebuying

So far this year, investment in North American residential real estate startups has already surpassed totals for all of 2017. Leading the funding surge are Opendoor and other companies looking to shake up the way homes are bought and sold.

WeWork is just one of SoftBank鈥檚 real estate plays

Speaking of big real estate bets, take a look at SoftBank. The heavy-spending startup investor has been a repeat investor in WeWork and, most recently, its WeWork China subsidiary. SoftBank has other real estate and building companies in its portfolio too, indicating an sustained appetite for large deals in the space.

Viacom is acquiring聽, a media company targeting Generation Z, in a deal reportedly valued around $25 million. The purchase marks a steep drop in valuation for Los Angeles-based Awesomeness, which had been valued at $650 million in 2016.

Yesterday, Tesla plans to issue $1.5 billion in debt to fund production of its Model 3 car. The new fundraising is not a surprise. As our recent analysis on electric vehicles (EVs) makes clear, the EV space is a cash-burning machine:

Despite basking in the center of media attention, Tesla is no exception.

Why Does Tesla Need More Money?

Since the launch of Model 3, its least expensive model to-date, Tesla has picked up around . While most Model 3 orders are starting late 2018, at the current pace of orders, Tesla needs to up to 500,000 vehicles per year by the end of 2018.

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Scaling production is not cheap. Hence the need for more capital.

Tesla has a history of delivery targets (the company even created a to appease its stans). On one hand, it鈥檚 good news for Tesla that it has received more orders than its current manufacturing capacity can handle. On the other hand, missing production deadlines again may damage the firm鈥檚 reputation, and correspondingly, relations with its investors and customers.

Tesla鈥檚 Cash Needs

It鈥檚 uncommon for companies to raise money after going public. Most companies that decide to IPO have either reached a certain maturity or have established stable revenue streams. Tesla, however, went public in 2010 with almost no product to market (besides the dying Roadster whose ), and it in 2013 as it neared the brink of bankruptcy.

Given how unusual Tesla鈥檚 fundraising activities are, we decided to take a look at the company鈥檚 post-IPO funding rounds.

In the following chart, the navy blue is Tesla selling new shares, whereas the light blue is the company raising debt that can convert into shares later. Note that the chart is not inclusive of the new $1.5 billion.

Tesla has not stopped raising money since it went public. The company has gyrated between selling shares directly, and raising capital through convertible debt, which can have dilutive impacts down the road.This March alone, Tesla raised almost $2.2 billion from issuing equity and convertible debt. The giant chunk of funding makes sense since the company needs to cover the costs of as well as .

This time around, rathering than making equity offerings and issuing convertible debt, which convert into shares, Tesla . In the world of high-yield corporate bonds, or junk bonds for short, the investors trade risk of default for higher yield, the issuer quickly raises a large sum by paying a higher interest rate.

The $1.5 billion debt offering into the high-yield junk bond market. But the move shouldn鈥檛 come as a surprise. Just as Jason Lemkin, , predicted five months ago on TechCrunch鈥檚 , Tesla continues to push the boundaries of the public market:

鈥淢y general rule with Tesla is that [Elon Musk] raises every dollar possible at the highest valuation and then more. My guess is that [even if] he couldn鈥檛 raise $3 billion today, he will still raise that $3 billion and push it to the limit…Eventually he will get it done, and it may even be 90 days before he is out of money.鈥�

How long until Tesla goes back for more?

From the聽:

Google said to fire memo author

1. Google has fired the author of a controversial and widely-read memo blasting the company鈥檚 diversity policies, Bloomberg聽. The company said the memo violated its code of conduct and advanced harmful gender stereotypes.

Oryx raises $50M for LiDAR

• , an Israel-based developer of LiDAR technology for autonomous vehicles, has raised $50 million in a Series B round led by Third Point Ventures and WRV and joined by new and existing investors.

Carmaker Faraday leases factory

• Electric carmaker聽听丑补蝉听聽on a production facility in Hanford, Calif., after recently abandoning plans to build its own factory in Nevada. Faraday says it plans to have its first vehicle on the road by the end of 2018.

IPOing like it鈥檚 1986

• SA国际传媒 takes a trip back to 1986,聽when Microsoft went public as a profitable, fast-growing company聽that didn鈥檛 need the money. In other words, it was in many ways the complete opposite of what we see in the current tech cycle. (For more stories, follow聽聽on Twitter and check us out on聽.)

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On the heels of Tesla unveiling its new model, we wondered how has fundraising into EV startups changed over time? And what can we learn about the maturity of the companies that have picked up capital over the past decade and more?

Let’s find out.

EV Market In The U.S.

Tesla is not alone in building EVs. In fact, many startups and investors around the world have invested in the EV industry. Since each country has its own policies and regulations regarding conduct in the space, today we are focusing on the U.S. market for clarity and depth鈥檚 sake.

To see how well investment trends predict movements in the EV space, we charted the amount of money invested into U.S. EV startups across private funding rounds since 2004. The total amount of funding raised each year is separated by round types:

As you can see from above, 2009, 2011, and 2014 stood out as years during which U.S. electric car companies picked up record investment.

On the left half of the graph, from 2004 to 2009, the change in round types tells a story of growth in EV funding. First, we see the rise of early-stage rounds, which led to later-stage rounds such as Series D and beyond, as well as private equity rounds.

Starting from 2010, we see a general decline in the amount of money raised (2011 aside). Also, the diversity of rounds raised declined, implying that fewer companies of differing maturity were raising external capital. Two reasons could have contributed to this lack of activity in fundraising:

1. Considering that quite a lot of capital was raised in 2009, EV companies may not have immediately needed additional funding the following period.
2. Perhaps some of the companies that raised initial capital began to generate revenue, reducing their needs for external capital. That could fit into the overall context of EV boom starting in 2010, with GM announcing its and Better Place the first modern battery swapping model.

Also keep in mind that EV startups may source funding through means other than the typical VC rounds.

For example, starting from 2010, the year which it went public, Tesla received from post-IPO debt and equity (approximately ). Typically, Post-IPO rounds are uncommon and a company would not resort to them unless it is in desperate need of capital.

A Closer Look at EV Startups (Besides Tesla)

The U.S. EV market is bigger than Tesla, of course, even though the company does attract a huge share of press attention (and capital) in its market category. To illustrate the point that there are other domestic players than Tesla, however, we picked three startups that made top six based on the total amount of money raised on our :

1. , based out of Menlo Park, California, was as an electric car startup that could rival Tesla. It was an ex-Tesla VP and started out under the name Atieva in 2007. The company has raised to date, notably from investors outside the U.S., such as and . Under financial shortages, Lucid Motors now between taking acquisition offers and raising money to build the factory for Lucid Air, its new model in development.
2. One of the few non-Californian EV companies, is headquartered in Kansas City, Missouri, and manufactures all-electric trucks and vans. The company to go public in 2011, but it quickly 聽the following year after receiving interests from private investors. Despite raising in two rounds, the startup to be near the brink of bankruptcy. Earlier this year, one of its investor that Smith has stopped all operations due to lack of funding.
3. The California-based , originally , raised from 2009 to 2011. It has not raised any new capital since then. Initially, Coda in collaborating with Chinese manufacturers. The company to put out the most economical electric cars with their parts made in China, but designed and assembled in California. After several , the company burned through the rest of its cash and bankruptcy in 2013. Post-bankruptcy, Coda battery energy storage to prepare for a damage-minimized sale.

A Lot of Losers. Not Too Many Winners.

If you have been excited by the number of EV startups in the U.S., it may be disappointing that the reality is less glamorous than the Tesla headlines have portrayed. EV startups, as we have seen, make bold claims about achieving record mile range and speed or becoming the next 鈥渂ig thing鈥� in cleantech. Yet many have struggled to , , and to finance their vision. The firms that are able to escape bankruptcy or shutdown often have opt for internal shake-ups or acquisitions to stay alive.

Tesla is no exception. Tesla鈥檚 successful launch of Model 3 does not rule out the again. It is also聽 as of Q2 2017. Tesla went public in 2010 mainly and probably resorted to loans and external investments post-IPO for the same reason.

Car-making is difficult and costly, especially when it comes to electric vehicles. We probably won鈥檛 get another documentary like Chris Paine鈥檚 Who Killed the Electric Car? anytime soon, but we are still decades away from living in an oil-independent era.

Methodology

Our defines EV as manufacturers of all-electric cars, trucks, and engines. Therefore, we did not include companies that produce hybrid cars, electric bikes, electric motorbikes, charging stations, batteries, and EV-related software. Even though Ford and GM are dabbling with EVs, we did not include them. It’s worth noting that some electric car startups are also developing autonomous driving technology.

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