TheChek News Flow

A stealth startup led by ex-Blue Origin leaders, focused on harvesting resources from the moon, has quietly closed a sizable new tranche of funding, according to regulatory documents.

Interlune, a startup that’s been around for at least three years but has made almost zero public announcements about its tech, has raised $15.5 million in new funding and aims to close another $2 million. A representative for Interlune declined to comment on this story.

This is the first public indication that the company has closed any funding since a $1.85 million seed round in 2022.

Much of what’s known about the startup was reported by GeekWire last October, when Interlune CTO Gary Lai briefly described the startup during a speech at Seattle’s Museum of Flight: “We aim to be the first company that harvests natural resources from the moon to use here on Earth,” he reportedly said. “We’re building a completely novel approach to extract those resources, efficiently, cost-effectively and also responsibly. The goal is really to create a sustainable in-space economy.”

Lai is an aerospace engineer whose resume includes a 20-year stint at Blue Origin, where he eventually became chief architect for space transportation systems, including launchers and lunar landers. Interlune is being led by Rob Meyerson, an aerospace executive who was president at Blue Origin for 15 years. Meyerson is also a prolific angel investor, with investments in well-known hardware startups including Axiom Space, Starfish Space, Hermeus and Hadrian Automation.

The filing with the U.S. Securities and Exchange Commission also lists attorney H. Indra Hornsby as a company executive. Hornsby previously held the position of general counsel at BlackSky and Spaceflight Industries, and also worked as an executive VP at Rocket Lab.

What little else is known of Interlune’s tech comes from an abstract of a small SBIR the startup was awarded last year from the National Science Foundation. Under that award, the company said it will aim to “develop a core enabling technology for lunar in situ resource utilization: the ability to sort ‘moon dirt’ (lunar regolith) by particle size.”

“By enabling raw lunar regolith to be sorted into multiple streams by particle size, the technology will provide appropriate feedstocks for lunar oxygen extraction systems, lunar 3-dimensional printers, and other applications,” the abstract says.

A growing number of space startups are focusing on what’s known as in-situ resource utilization (ISRU), or collecting and transforming space resources into valuable commodities. Much of this is driven by NASA’s stated priority to build a long-term human outpost on the moon via its Artemis program: The agency acknowledges that longer-term stays in space will require the ability to generate materials locally — whether that’s to build roads, produce breathable air or even make rocket propellants.

But it isn’t just startups that are trying to commercialize ISRU tech; last year, Blue Origin announced that it had made solar cells and transmission wires out of a material that’s chemically identical to lunar regolith.

In its February 2023 announcement on the tech, Blue Origin said, “Learning to live off the land – on the Moon and on Mars – will require extensive collaboration across the ISRU community.” The phrase is echoed in Interlune’s abstract: “The use of the Moon’s resources is a disruptive capability that will enable missions there to ‘live off the land,’ making the development of this technology important for government agencies and industry alike.”

Lots of big rounds this week, with none bigger than the whopping $1.5 billion raised by sustainability and infrastructure investment firm Generate Capital. On top of that, there were another five rounds of $100 million or more. Who said large growth rounds were dead?

1. Generate Capital, $1.5B, renewable energy: If the name looks familiar, that’s likely because this company has made the list before. Early in 2023, the San Francisco-based green infrastructure investor and operator raised $1.1 billion, per SEC filings and reports. That raise came just about 18 months after it raised $1 billion in 2021. Now Generate is back with a $1.5 billion round raised from a variety of investors, including California State Teachers’ Retirement System. Generate invests in an array of infrastructure projects, from community solar systems to municipal wastewater treatment to electrifying fleets. Founded in 2014, the company has raised $4.2 billion, per Crunchbase.

2. Kore.ai, $150M, artificial intelligence: Another week and another big round for a generative AI startup. AI enterprise conversational platform Kore.ai raised a $150 million round led by FTV Capital. The round also included participation from Nvidia, which of course has been one of the sector’s most active investors. The startup is not new to the AI scene — it’s a decade old — and offers an array of artificial intelligence-related tech from virtual assistants to no-code tools to build AI apps. Founded in 2013, the company has now raised nearly $224 million, per Crunchbase.

3. Zum, $140M, transportation: AI and school buses may not seem like a natural match, but startup Zum would disagree. The Redwood City, California-based transportation company raised a $140 million Series E led by GIC at a $1.3 billion valuation. The new round is a significant jump in value for a company that last raised money in October 2021 — a $130 million Series D — at what was a reported $930 million valuation. The 40% valuation jump is even more impressive considering 2021 was a very different time in the private markets, with venture capital funding hitting all-time highs. Since then, many companies have seen their valuations significantly cut. Zum tries to help school districts increase efficiencies and reduce the costs of managing bus fleets through its proprietary platform — that, of course, uses AI. The platform gives districts visibility so they can optimize routes and even deliver real-time updates to parents. In addition, the startup also has its own fleet of EV buses for districts to use. Founded in 2015, Zum has raised $350 million, per the company.

4. Cour Pharmaceuticals, $105M, biotech: Chicago-based Cour Pharmaceuticals is the top biotech startup on the list this week. The clinical-stage company raised a $105 million Series A co-led by Lumira Ventures and Alpha Wave Ventures. The firm focuses on the development of disease-modifying therapies to treat patients with autoimmune and inflammatory diseases. Founded in 2015, the company has raised nearly $136 million, per Crunchbase.

5. Inari, $103M, agtech: Agtech startups don’t often land this high on the list, but Cambridge, Massachusetts-based Inari raised a $103 million equity round at a $1.7 billion valuation. Inari uses AI-powered predictive design and multiplex gene editing to develop corn, soybean and other higher-yielding seeds that require less water. No lead investor was named, but it included investment from the likes of Canada Pension Plan Investment Board and Rivas Capital. Founded in 2016, Inari has raised $575 million, per the company.

6. Watershed, $100M, climate: San Francisco-based Watershed, an enterprise sustainability platform, locked up a $100 million Series C at a $1.8 billion valuation led by Greenoaks. Founded in 2019, the company has raised $239 million, per Crunchbase.

7. Codeium, $65M, artificial intelligence: Mountain View, California-based Codeium, a generative AI-powered coding toolkit developer, raised a $65 million Series B at a $500 million valuation led by Kleiner Perkins. This is the company’s first announced round, per Crunchbase.

8. Accompany Health, $56M, health care: Bethesda, Maryland-based Accompany Health, a primary, behavioral and social care provider for low-income patients, launched with a $56 million Series A. Investors in the round include Venrock and Arch Venture Partners. Founded in 2022, this is the company’s first announced round, per Crunchbase.

9. Basking Biosciences, $55M, biotech: Columbus, Ohio-based Columbus Basking Biosciences, a clinical-stage biopharmaceutical company developing a therapy to treat stroke, closed a $55 million financing led by New investor ARCH Venture Partners led the round. Founded in 2019, the company has raised nearly $90 million, per Crunchbase.

10. Cohere Health, $50M, health care: Boston-based Cohere Health, a SaaS health care platform, closed a $50 million round led by Deerfield Management. Founded in 2019, Cohere has raised $106 million, per the company.

While Generate easily led the way for the biggest round globally, there was another large private equity raise in India.

Investors were wary when Luiz Inácio Lula da Silva returned for a third term as Brazil’s president 13 months ago. They have warmed to him since.

The iShares MSCI Brazil EWZ exchange-traded fund is up nearly 20% since Lula, as the 78-year-old leader is known, reassumed power last January. Local-currency bond yields have tightened by 300 basis points, or 3%. Ratings firms Fitch and S&P upgraded Brazil’s sovereign credit.

“On a zero-to-10 scale, Brazil today is a seven,” says Daniel Gewehr, head of Latin American equity strategy at Itaú BBA.

The good times could keep rolling. Brazil’s central bank, the most hawkish in any major market over the past few years, has slashed interest rates from 13.75% to 11.25% as inflation subsides, and is expected to hit 9% later this year. The boost to consumers and corporate borrowers should drive earnings of listed companies up 14% year-on-year at an index level, Gewehr predicts.

“We see the market as cheap, given the earnings growth,” notes Verena Wachnitz, a portfolio manager for Latin American equities at T. Rowe Price.

Domestic-related stocks look the most attractive in this environment. Gewehr is confident about car-rental leader Localiza and jewelry chain Vivara.

Varun Laijawalla, emerging markets portfolio manager at Ninety One, looks for tumbling rates to catalyze Brazilian real estate. He likes leading mall franchise Multiplan Empreendimentos Imobiliários and home builder Cyrela Brazil Realty.

Localiza is the only one of these picks that is a top-10 Brazilian stock. The index is dominated by commodities exporters Petróleo Brasileiro and Vale, and financials.

Wachnitz is keen on one financial name: B3, parent company of the Bolsa exchange. It should benefit as local investors shift from less-profitable fixed-income back into equities, and companies unfreeze the initial-public-offering pipeline, she predicts.

The effect of falling rates on big banks like Itaú Unibanco Holding and Banco Bradesco is less straightforward. Lower rates spell lower interest margins, but also fewer nonperforming loans and potential loan growth as money gets cheaper for corporates and households. Laijawalla says he is “flirting” with some Brazilian bank names. “The peak of the NPL cycle should read positively for future performance,” he says.

The biggest question mark over Brazil, though, remains Lula himself, whose social spending goals butt up against fiscal discipline. His government won some market benefit-of-the-doubt last year with a pledge to eliminate Brazil’s primary budget deficit (not including interest payments), but then quickly fudged it. Economists predict a gap near 1% of gross domestic product this year, propelling a total deficit around 6% of GDP.

“They’re walking backward in terms of addressing fiscal problems,” says Alberto Ramos, head of Latin America economic research at Goldman Sachs.

Another worry is Lula’s increasing influence over the central bank that quelled postpandemic inflation. Four of nine board members are already his appointees. They will take control by the end of this year, when President Roberto Campos Neto steps down.

That’s a threat to future inflation battles, even though the bank gained legal independence under Lula’s predecessor Jair Bolsonaro, says Arthur Budaghyan, chief emerging markets strategist at BCA Research. “Lula’s four members of the board are all on the dovish side,” he says.

A key political figure to watch, says Wachnitz, is Minister of Finance Fernando Haddad, who has tempered Lula’s populist instincts and become a favorite target of left-wing colleagues in the process.

“He is the only reasonable person in the government,” she says.