Alta Views: your fortnightly scoop of Private Capital Markets

Welcome back Alta-natives! In this edition, we look at how AI is rocking the world with some of the largest funding rounds in recent history, how interest around venture debt funds are skyrocketing, as well as potential benefits of Malaysia and Singapore’s push for a sustainable and digital future.?

Generative AI to drive large funding rounds and valuations within Silicon Valley

• Amidst the otherwise challenging market conditions for the technology industry (mounting layoffs and valuation discounts), it seems the AI vertical has shown investors a sign of optimism.

• In the past two weeks,? AI service providers OpenAI, Anthropic, and Character raised US$10B, US$300M, and US$250M. Their valuations stood at US$30B, US$5B, and US$1B respectively, suggesting investors' increasing confidence in the future of generative AI.

• Despite the momentum, AI companies are still in the early stages of adapting the technology to generate revenue making business models. Investors will therefore have to stick to a longer-term mindset before exiting their sizable investments via either M&A or public markets.

India’s budget to boost growth by scaling capital spending to US$122B

• India's government has announced a 33% increase in capital expenditures to accelerate economic growth. India has also made significant allocation of approximately US$224 billion and US$4 billion towards agriculture and energy transition initiatives respectively.?

• In alignment with the country’s sustainable drive, India recently issued its first green bond valued at US$1 billion, earmarked specifically for financing environmentally-focused projects. This marks the beginning of a local green bond market and also supports India's goal of achieving net-zero emissions by 2070.?

Bilateral agreements between Malaysia and Singapore push for a sustainable and digital future

• Newly elected Malaysian Prime Minister Anwar Ibrahim visited Singapore to usher new agreements between the two countries, to enable a green and digital economy, transparent diplomacy and energy sharing
• Both nations aim to reach carbon neutrality and net zero emissions by 2050, and enhance the efficiency of cross-border digital payments as part of their digitization efforts
• Benefits to come out of the agreement include the increase of invested capital (currently at US$56 billion) and the creation of more joint agreements between Singaporean and Malaysian companies

Growing Interest in Venture Debt Funding

• Amidst an IPO winter and equity funding drying up, start-up founders have found themselves raising funds through debt to hit their strategic business goals

• Venture debt has exhibited sustained growth over the years, registering a CAGR of 16.85% over the last 5 years, growing from US$14.6 billion in 2017 to US$31.8 billion in 2022.?

• With late-stage companies taking up 70% of the total amount, it is a testament to the risk-averse strategy employed by investors, seeking to minimize the probability of default

• Key upsides giving momentum to this financing method include its affordability (typically being 25% to 50% of the cost of equity), its ability to preserve ownership control, avoiding a down-round, and prolonging cash runways without diluting equity.?

?? Exclusively on Alta

Melio , SeatGeek, ? Lalamove , Orna Therapeutics , Shiprocket , Dana - discover the hottest names in private markets that are trending with our investor network! Researched by experts, voted by insiders. View our Top Picks here !

?? Notable Fundraises

Ecozen | US$25M | Series C | Agriculture Technology

EcoZen is a climate-smart deeptech company that provides efficient and eco-friendly agriculture solutions for a sustainable future. Its solutions include a portable solar-powered cold room based on thermal energy storage which can maintain low temperatures without any backup power and a smart irrigation pump controller which complements offerings in the solar and agri-solutions space.

Terra Drone | US$14M | Series C | Robotics

Leading industrial drone solution provider Terra Drone offers innovative solutions for aerial photography, surveying, inspection, data analysis, and operation management. Thai also include inspection services, enabling industries to collate, analyze and interpret major infrastructural projects.

Log9 Materials | US$40M | Series B | Clean Technology

Log9 Materials is a clean-tech startup and developer of graphene nanotechnology battery cells designed to increase the transition to a clean and sustainable mobility and energy storage ecosystem.

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About Alta Views

A fortnightly collection of the latest news from Private Capital Markets. Put together by Alta’s team of analysts, we bring you the most critical and timely pieces from private markets, to help you navigate the broad horizon. Stay tuned as we bring you the most notable fundraises, analysis on industries and companies trending within investor networks, the latest headlines, and more!

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