February’s 10 Top Rounds: Real Estate And AI Startups Score Big

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This is a monthly feature that runs down the month’s top 10 funding rounds in the U.S. Check out last month’s top rounds here.

February may be the shortest month of the year, but there were still some large rounds in that short time period. Six rounds raised by U.S.-based startups were of a quarter-billion or more, with artificial intelligence helping push some big numbers.

1. Dreamscape, $850M, real estate: Sometimes it can be difficult to figure out what is debt and what is actually growth equity in many of these larger rounds — and this is a good example. New York-based Dreamscape, a real estate development and investment firm, completed an $850 million capital raise this week. However, it’s unclear what was debt and what was equity. We do know Wells Fargo led the debt syndicate and Raymond James led the equity private placement, but that’s about it. We don’t know how much of that $850 million was equity. Regardless, it is a big raise. The firm will use the proceeds to create two new platforms: Dreamscape Entertainment Properties and Dreamscape Entertainment Integrated Resorts, both involving gaming, hospitality and entertainment.

2. SandboxAQ, $500M, AI: Nearly a year after spinning out of tech giant Alphabet, AI and quantum computing startup SandboxAQ finally announced more funding details this month, saying it had raised a $500 million round. SandboxAQ is examining the related effects of both AI and quantum — which is where the company gets “AQ” — to develop commercial products for telecom, financial services, health care, security and other computationally intensive sectors. One aspect of security the startup is looking at is how companies and the government can replace current public-key cryptography algorithms with algorithms that are resistant to quantum computer-based attacks. Quantum computing is a level of compute much faster and at a level superior to classical computers that examines quantum states to perform computation. Investors named included Breyer Capital, former Google CEO Eric Schmidt, Thomas Tull, First Light Capital Group, funds and accounts advised by T. Rowe Price Associates, Guggenheim Investments, Time Ventures, Section 32, Parkway Venture Capital and other funds and investors.

3. (tied) Anthropic, $300M, AI: San Francisco-based startup, and rival to ChatGPT, Anthropic is the latest AI company to raise big from a tech giant. The AI startup locked up a $300 million round from Google in February. Anthropic’s new round could bring the company’s total valuation to $5 billion, The New York Times reported. The Financial Times first reported Google as the investor.  The new year is shaping up to be an all-out AI war. Late last month, Microsoft finally confirmed it has agreed to a “multiyear, multibillion-dollar investment” into OpenAI, the startup behind the artificial intelligence tools ChatGPT and DALL-E, for a reported $10 billion.

3. (tied) Our Next Energy, $300M, energy: While the EV market has taken off, it’s important to remember those vehicles need batteries. Novi, Michigan-based Our Next Energy raised a huge $300 million Series B to develop those batteries. The round values the startup at $1.2 billion and was led by Franklin Templeton Investments and real estate-focused Fifth Wall. The raise comes just as supply chain issues and the rising cost of battery and metal material are bottlenecking U.S.-based electric car manufacturers. The latest raise will help fund the operations of its battery cell factory that completed construction in December and will formally launch in 2024. Our Next Energy has now raised $390 million, according to Crunchbase data.

3. (tied) Wiz, $300M, cybersecurity: Cybersecurity startup Wiz graduated to decacorn just this week, as the company — based in the U.S. and Israel raised $300 million in fresh capital at a valuation of $10 billion. The Series D funding was led by Lightspeed Venture Partners. Founded in 2020, Wiz has now raised a total of $900 million, according to Crunchbase data. The funding for the cloud security startup came with other news, as Wiz announced it won’t move any of that money to Israel due to ongoing unrest about proposed reforms to the country’s judicial system. Some fear the proposed judicial system reforms would undermine Israel’s democratic foundations and grant unchecked power to the government.

6. Pristine Sun, $250M, renewable energy: To kick off this year, renewable energy firm Silicon Ranch announced it had closed $375 million of what could be a $600 million raise. In February, another renewable energy company wrapped up a huge private quarter-billion-dollar round. Richmond, California-based Pristine Sun locked up the huge round from what it called “strategic private equity and family office investors.” The company plans to use the new cash infusion to develop and finance up to 5 gigawatts of its solar projects in Texas, California and Louisiana. The round is the company’s first from outside investors, according to Crunchbase data. Since 1996, Pristine Sun and its affiliates have developed solar and wind projects totaling over 25 GW.

7. Skydio, $230M, drone: Drone startup Skydio locked up a $230 million Series E at a $2.2 billion valuation led by Linse Capital — more than double its valuation from just a couple of years ago. The new round comes almost exactly two years after the company raised a $170 million Series D at a valuation of more than $1 billion. Skydio produces drones for the consumer, enterprise and government sectors. Its drones are used by every branch of the U.S. Department of Defense, by over half of all U.S. State Departments of Transportation and it now has more than 1,200 enterprise customers. Founded in 2014, Skydio has raised $562 million in total, according to the company.

8. Spreetail, $208M, retail: It’s rare a Nebraska-based company is this high on the list, but not unheard of. Last July, Lincoln-based Monolith — which produces clean hydrogen, carbon black and ammonia — closed a $300 million round, and in February it was Lincoln-based e-commerce logistics firm Spreetail’s turn, after a $208 million funding round. The company said the round “was supported by McCarthy Capital, internal management, and other investors.” Founded in 2006, the fresh round is the company’s first outside investment, per Crunchbase data. Spreetail serves more than 500 brands, helping them push e-commerce sales — through analytics, insights and logistics — onto large platforms such as  Amazon, Walmart.com and other sites. Funding to so-called “Amazon aggregator startups” has dropped since the highs of 2020-21, when online retail was hitting new levels due to pandemic lockdowns and consumers relying more on delivered goods.

9. ShiftMed, $200M, health care: The pandemic exposed many issues affecting hospital workers — from burnout to scheduling problems. Virginia-based ShiftMed, a health care workforce marketplace, raised a $200 million round led by health care-focused Panoramic Ventures to tackle some of those issues. Through an automated scheduling platform, the startup connects 35,000 full-time nurses with hospitals and at-home care companies that need last-minute extra support. Founded in 2019, the company has raised $245 million, per Crunchbase.

10. Aera Therapeutics, $193M, biotech: This is also a hard one to know whether or not it should be on the list. Boston-based biotech firm Aera Therapeutics announced its launch with $193 million in financing — but it was in a combined Series A and B led by Arch Venture Partners, GV and Lux Capital. So it was in two rounds, not one. Regardless, Aera makes the list as it looks to develop its proprietary platform for the delivery of genetic medicines.

Big global deals

Only one round outside the U.S. cracked the global top five in February.

• China-based Zeekr, which develops and manufactures electric vehicles, raised a $750 million Series A.

Methodology

We tracked the largest rounds in the Crunchbase database that were raised by U.S.-based companies in February. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late.

Illustration: Dom Guzman

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