Top tech startup news for Monday, March 27, 2023: Binance, Northvolt, OpenView, Oyo, and Twitter
Good evening! Below are some of the top tech startup news stories for Monday, March 27, 2023.
Swedish lithium-ion battery startup Northvolt is in talks to raise over $5 billion in funding to pursue its goal of becoming Europe’s biggest battery manufacturer, the Financial Times (FT) reported on Sunday. Citing people familiar with the ongoing talks, the FT said the startup is currently negotiating with a number of banks to raise the amount and an agreement could be reached later this year.
The news also follows a report from Reuters last week that the startup is close to hiring banks for its initial public offering (IPO) in Europe or New York that could value the company at more than $20 billion.
In recent months, Northvolt has raised several billion dollars through debt issuances to finance its factory investments. This includes the issuance of $1.1 billion in convertible notes last year, which enabled the company to increase its production capacity at its gigafactory located in Skelleftea, Sweden.
Founded in 2016 by Peter Carlsson, a former executive at Tesla, and Paolo Cerruti, a former manager at Airbus, Northvolt is a Swedish battery manufacturing company that specializes in the production of lithium-ion batteries for electric vehicles and energy storage systems.
In just a few years, Northvolt has quickly become a leader in the European battery market and has established partnerships with several major companies, including Volkswagen, BMW, and ABB. The company’s goal is to produce high-quality, sustainable batteries that are designed to meet the growing demand for electric vehicles and renewable energy storage systems.
Unlike other battery makers, what sets Northvolt apart is its focus on sustainability. The startup has committed to using only renewable energy in its production processes and to using recycled materials wherever possible. Northvolt has also developed a closed-loop system that allows for the recycling and reuse of materials from old batteries.
OpenView announced today it has closed $570 million in funding for its seventh fund (Fund VII) to invest in high-growth software startups. The latest fund, which represents OpenView’s largest funding to date and a 25% increase over the firm’s sixth fund, will provide greater support to entrepreneurs during this difficult macroeconomic period.
Since its inception in 2006, OpenView has raised a total of $2.4 billion across its seven funds and has partnered with more than 60 companies including Datadog, Calendly, Axonius, JumpCloud, UserTesting, and Workfront, among others.
Meanwhile, OpenView has already begun investing out of Fund VII and looks forward to supporting the next generation of software entrepreneurs as they scale through the expansion stage and beyond.
“As we have for nearly two decades, we remain focused on identifying and supporting innovative business software companies in high-growth product markets primed for rapid expansion,” said Mackey Craven, partner at OpenView.
OpenView is led by veteran investors including Scott Maxwell, Mackey Craven, and Blake Bartlett, along with a next generation of partners who joined the partnership in its sixth fund.
“During this time of turbulence in the financial markets, OpenView is excited to have a new fund to support software startups,” said Blake Bartlett, partner. “We are grateful for our partnership with world-class limited partners, which makes it possible to support these promising companies as they build the future.”
Amid the ongoing headwinds in the tech space, SoftBank-backed Indian hospitality startup Oyo is cutting its initial public offering (IPO) size as tech valuations fall, Bloomberg News reported on Monday.
Citing two people familiar with the matter, Bloomberg said that the decade-old startup is reducing the IPO shares it aims to sell via a stock-market debut by about two-thirds as part of the effort by the company’s founder to go public and pushing for sale as financial pressure intensifies.
One of the individuals familiar with the matter also told Bloomberg that Oyo intends to sell only a third of its originally planned new shares, which will reduce the amount of fresh capital the company is anticipated to obtain.
This move illustrates how Oyo’s 29-year-old founder, Ritesh Agarwal, is striving to move forward with the IPO even with less favorable terms, in an attempt to alleviate the financial pressure on the hotel and lodging booking company as well as himself. Despite the travel industry’s improvement since the pandemic lows, Oyo, which was once valued at roughly $10 billion as India’s answer to Airbnb, continues to experience increasing losses. Agarwal, on the other hand, took on a significant amount of debt to increase his ownership in the company.
The once-high-flying startup first announced the plan to go public about two years ago when it revealed it was planning to raise about 84.3 billion rupees ($1.16 billion) in an IPO, according to draft papers submitted to India’s market regulator. The paper further shows that Oyo plans to issue new shares worth up to 70 billion rupees while existing shareholders could sell shares worth up to 14.3 billion rupees.
The startup has been hemorrhaging money. Late last year, Oyo announced it is cutting 600 jobs in its corporate and technology departments.
Binance and its founder Changpeng Zhao sued by US regulators for operating an “illegal” exchange and a “sham” compliance program
Binance, the world’s biggest crypto exchange, and its founder and CEO Changpeng Zhao (CZ) were sued by the U.S. Commodity Futures Trading Commission (CFTC) for operating what the regulator alleged were an “illegal” exchange and a “sham” compliance program.
CZ is not alone. The CFTC also charged Binance’s former chief compliance officer Samuel Lim with aiding and abetting Binance’s violations. The CFTC charged Binance, Zhao, and Samuel Lim with “willful evasion” of U.S. law, “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”
The agency said it’s seeking “disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the CEA and CFTC regulations, as charged.”
“Today’s enforcement action demonstrates that there is no location, or claimed lack of location, that will prevent the CFTC from protecting American investors. I have been clear that the CFTC will continue to use all of its authority to find and stop misconduct in the volatile and risky digital asset market,” said CFTC Chairman Rostin Behnam. “For years, Binance knew they were violating CFTC rules, working actively to both keep the money flowing and avoid compliance. This should be a warning to anyone in the digital asset world that the CFTC will not tolerate willful avoidance of U.S. law. I applaud the diligent and dedicated work of the CFTC’s Enforcement team in bringing this action, and for their hard work in addressing illegal operations in the digital asset space,” CFTC said in a statement.
The regulator’s legal action arises amidst a wider and more prominent campaign against cryptocurrency companies. Over the years, American prosecutors and civil investigators have focused on crypto enterprises for unlawful offerings and non-compliance with regulations aimed at curbing illicit practices. However, the frequency of such government interventions has intensified in recent times.
The announcement comes just a few days after Binance halted deposits and withdrawals, which the company said was caused by technical glitches that affected its spot trading marching engine.
In his response to the CFTC lawsuit, CZ said in a blog post: “Today, the CFTC filed an unexpected and disappointing civil complaint, despite our working cooperatively with the CFTC for over two years. Upon an initial review, the complaint appears to contain an incomplete recitation of facts, and we do not agree with the characterization of many of the issues alleged in the complaint. While we will only be able to give full responses in due time, we will address a few key points below.”
Twitter is now the number one most downloaded news app in the world with over 7.2 million ratings, according to the latest app rankings from the Apple App Store. News aggregation platforms Reddit and local news app NextDoor came in second and third place respectively.
CNN and the New York Times are the only two legacy media outlets that make the top ten spot, with CNN in the seventh place and the New York Times in the tenth spot.
The news comes just a day after Twitter set a new milestone reaching over 500 million total active users just 5 months after Elon Musk acquired the social media platform for $44 billion late last year.
“We rely on Twitter to help us express our thoughts and keep up with the news. And with Twitter’s Apple TV app (our 2016 App of the Year), we’ve also got a bigger window into current events and topical discussions. From breaking-news tweets to live video feeds—and even Thursday Night Football—the benefits of that little bird are always getting bigger.”
The success of Twitter as the go-to news source is a further confirmation of Americans’ distrust of the mainstream media. Responding to a post from Twitter user DogeDesigner about the social platform becoming the most downloaded news app, Twitter owner Elon Musk said:
“Twitter is the news.”
Twitter is now the most downloaded news app in the world.
— DogeDesigner (@cb_doge) March 27, 2023