Early-stage Automotive start-up funding shrunk by 10% in 2022 to $11 Billion and just $3.7 Billion in 2023
Funding in early-stage Automotive start-ups, which includes Pre-Seed, Seed, A and B Series, slowed down from $12.2 Billion in 2021 to $10.9 Billion in 2022 and just $3.7B in 2023, according to data from Crunchbase.
In 2023, the first quarter saw $1.3 Billion funding, followed by $975 Million in Q2, $1 Billion in Q3, and just $0.4 Billion in Q4.
The selection of the two-year period reflects the activity since the start-up of the COVID-19 pandemic and the development of the New Normal in the automotive industry in terms of an accelerated shift to energy independence, sustainability and software-driven business models.
Chinese start-ups continue to attract the lion’s share in terms of funding in premium electric vehicles backed by domestic car brands GAC, Geely and Dongfeng and autonomous driving start-ups, DeepRoute.ai and Didi.
US start-ups secured $5.7 Billion in the 2-year period, from $2.4 Billion in 2021, to $3.1B in 2022 and $0.17 in Q1 2023.
European start-ups raised $3.2B, of which $1.0B went to Electric Vehicles and $0.7B for Autonomous Vehicles.
Between Q1 2021 to Q1 2023 cumulative automotive start-up funding amounted to $24 Billion, of which half went to electrification
Funding in start-ups working on Electrfication amounted to $12 Billion for the 2-year period. This includes electric vehicles, energy storage like batteries, battery business models and EV charging.
Funding in early-stage start-ups working on next-generation Electric Vehicles more than doubled in 2022 to $7.2 Billion, from $3.6 in 2021; while funding in Autonomous and Shared Mobility business models shrunk,
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The Top funding rounds in Electric Cars and EV charging infrastructure between Q1 2021 and Q1 2023 went mostly to Chinese premium EV brands of major Chinese manufacturers.
- Chinese EV Manufacturer GAC Aion New Energy Automobile raised $2.5 Billion in Series A in October 2022, which made it China’s most-valuable EV start-up with RMB 103.3 billion at that time;
- U.S-based TeraWatt Infrastructure raised $1 Billion in Series A to scale EV Charging across America, said the company in a press release in September 2022.
- Geely’s Zeekr premium Electric vehicle manufacturer raised $750 Million Series A round in February 2023, which led to a $13 Billion valuation. Zeekr will use the funds raised in Series-A to accelerate global development of its propriety technologies whilst also aiming to expand its global market footprint by entering the European market in 2023, according to Geely.
- Dongfeng Motor’s high-end EV brand Voyah raised $702 Million in Series A Round in Novermber 2022, setting its post-financing market valuation at nearly 30 billion yuan at that time.
Autonomous Driving start-up funding is in decline, but big deals in Level 4 Software development are still happening
Early-stage start-ups working on autonomous vehicles secured $6 Billion funding in the 2-year period between Q1 2021 and Q1 2023, from $3.5 Billion in 2021 to $2 Billion in 2022 and just $90 Million in Q1 2023.
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The Top-3 automotive start-up funding rounds in Autonomous Driving / Autonomous Vehicles came from Chinese start-ups working on Level 4 autonomy which provides un-supervised driving.
- Chinese autonomous driving start-up Deeproute.ai raised $300 Million in Series B in September 2021 to expand its Level-4 Autonomous Driving for Robotaxis and Trucks to urban logistics and fleet operation;
- Didi Woya secured $300 Million for L4 Autonomous Driving Robotaxis in a Series B round in July 2021. In April 2023, Didi Global announced its intention to develop its own robotaxis by 2025.
- WeRide raised $300 Million in Series C funding for its L4 Autonomous Driving Robotaxis in June 2021.
European Autonomous Driving start-ups secured $0.71 Billion funding since 2021, across 87 rounds.
- Wayve, a UK start-up working on Level 4 Autonomous Driving Software), raised $200 million in Series B from investors including Microsoft.
- Einride (Level 4 Autonomous Trucks),
- Vay (Tele-operation),
- EasyMile (Level 4 Autonomous Driving Software) and
- Oxbotica (Level 4 Autonomous Driving Software)
Half of the early-stage funding raised by European start-ups is supporting the development of Level 4 Autonomous Driving Software, while 17% is for Autonomous Trucks
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To learn more about the status and outlook of Autonomous Driving read our report Autonomous Driving roadmaps Level 1-4 of 30 major Carmakers by 2030.
Automotive start-up funding in Shared Mobility and new business models slashed in half in 2022
Automotive start-up funding in Mobility business models, which include mobiility-as-a-service, financing, insurance and maintanance secured $6 Billion and autonomous vehicles ($6B) accounted for most of the funding.
To learn more about the strategies of carmakers in shared mobility and their business models in sharing, EV charging, parking and financing, read our report.
Web 3 funding is on the rise
Early-stage automotive start-up funding in Web3, which supports the decentralization, privacy and transparency, rose from $29 Million in 2021 to $36 Million in 2022.
Early-stage European start-ups in WEB3 raised $5.2 million in fundings between 2021 and Q1 2023. Funding amount tripled in 2022 to $3.7 million, from $1.2 million in 2021.
AI automotive start-up funding shrunk by 31% in 2022
Early-stage funding in AI Automotive start-ups shrunk by 31% in 2022 to $0.96 Billion, from $1.40 Billion in 2021. AI funding amounted to $2.4 Billion between Q1 2021 and Q1 2023, across 189 funding rounds.
In Q1 2023, automotive start-up funding amounted to $57 million, down from $398M in Q1 2021 and $539M in Q1 2022.
AI Automotive start-up funding accounted for 10% of overall early-stage Automotive Start-up funding in the 2 Year-Period, down from 12% in 2021.
Which AI technology use cases attract the biggest funding amount in the Automotive Industry
AI in Autonomous Driving holds the lion’s share in terms of funding with 85% share of the total funding in the 2-year period ($2 Billion).
Robotaxis and Robobus providers led by China’s WeRide and DeepRoute.ai, together with Level 4-Autonomous Driving Software developers, such as UK’s Wayve, were the main AI use cases in terms of funding amount.
Top5 AI start-ups in Autonomous Driving by funding amount between Q1 2021 and Q1 2023
- WeRide with $300M,
- DeepRoute with $300M and
- Metropolis with $208M ranked in the Top3 by funding amount in between Q1 2021 and Q1 2023.
- Sotorea raised $204 Million and
- UK’s Wayve raised $200 Million.
AI for mobility business models follows with $0.25 Billion led by UK insurtech provider Flock.
China retains the lead of top start-up innovation hub by funding
Early-stage Chinese Start-ups secured $6.7 Billion in 2021, $5.3 Billion in 2022 and $0.9B in Q1 2023
China leads Automotive Start-up funding with $12.9 Billion secured across 120 rounds between Q1 2021 and Q1 2023.
- Electrification accounted for 57% of the 2-year total with $7.4 Billion peaking in 2022 ($4.5B). GAC, Zeekr and Voyah led the way.
- Mobility Business Models accounted for 24% peaking in 2021 with $2.9 Billion, with T3 Mobile Travel Services raising $1.2 Billion in 2021.
- Autonomous Driving secured $2.3B in the 2-year period, from $1.6B in 2021 to $0.6B in 2022 and $0.1B in Q1 2023. Inceptio Technology’s Series B led funding with $0.5B, followed by Deeproute and Didi Woya.
Chinese carmakers are very active in the development of New Energy Vehicle offerings and new mobility business models. China is driven by its ambition to transform from a production-based economy to an innovative economy and allocate a vast amount of private-venture capital. New Energy Vehicles are crucial to this plan. NEVs include Battery Electric Cars, Plug-in-Hybrids and Fuel-Cell vehicles.
To learn more insights from our coverage of China’s automotive market and automotive start-up funding read:
- Top-10 Chinese Carmakers in ADAS & Autonomous Driving
- Trends and Investment Hotspots In China’s Mobility Ecosystem
To learn more about funding in innovative start-ups contact us here.
