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What the numbers say: Average funding rounds sizes have contracted since the latter half of 2022, especially for Series C and beyond startups, per Crunchbase. In Q1 2023, Series C rounds averaged $59M, down from the peak of $82M in 2021. The decline has been gradual in seed through Series B rounds, which have kept their averages above 2020 levels, while Series C rounds have fallen below. Relevance: Seed stage rounds witnessed the lowest dip in average values, contracting by just $0.1M from the peak value of $3.7M in 2022 to $3.7M in Q1 2023. Average Series A deal values dropped slightly from the peak of $19.1M in 2022 to $18.7M in Q1 2023. Average and median round sizes in Q1 2023 for Series B rounds were $28M and $40M, respectively.
What happened: In 2021, seed to Series B stage startups saw an increase between 25% and 59% YoY. Due to the changing macroeconomic landscape and the resulting venture funding retrenchment that started in the latter half of 2022, round sizes started contracting as investors exercised caution with their capital deployment. As a result, valuations of startups — which were inflated in 2021 — started dropping in 2022. Pitchbook's data shows that average pre-money valuations of late-stage startups halved to $159.1M in Q1 2023 from its peak of $351.1M in 2021. |
