Large, costly seed deals are exceptions to 2023’s sluggish VC market

Hope it can be done It will become easier for new startups to raise capital by 2023, but it still hasn’t happened by the end of the year.

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New data from business database PitchBook paints a bleak picture for venture capital activity in the fourth quarter of 2023. According to preliminary statistics from PitchBook, U.S. startups raised 2,879 rounds of financing in the fourth quarter, worth about $37.5 billion, which was the lowest quarterly deal volume since the fourth quarter of 2019 and the number of deals in 2017. The lowest since the fourth quarter of this year.

Venture capital investment activity in the U.S. is softening across all stages, and this extends beyond the headline numbers – for example, we saw less total capital invested in U.S. new ventures last year than in 2020.

However, there is an interesting phenomenon in the data: we see a decline in the number of seed deals, in line with trends in the rest of the market, but the youngest startups appear to be generally performing better than others. observe:

• The median funding amount for all Series A startups declined between 2022 and 2023, but the median seed-stage deal amount in 2023 was on par with the record $3 million set in 2022. Average The value of US seed deals rose to $1.3 million last year, a situation we last saw in 2006. )