SA国际传媒

After many months of tightening their purse strings, North American startup investors loosened them up a bit in the first quarter.

Altogether, venture funding in American and Canadian companies totaled $35.2 billion in Q1 of 2024, per data. That鈥檚 a gain of 14% from Q4, which was the slowest quarter in years.

But while funding was up sequentially, investment is still down year over year. Late-stage funding in particular remains well below year-ago levels, while early stage has held up better.

For perspective, we compared funding totals, color-coded by stage, over the past 13 quarters below.

While spending rose sequentially in Q1, deal volume did not. Per SA国际传媒 data, investors participated in 2,435 known rounds at all stages in the course of the quarter. That鈥檚 a decline of 8% from the prior quarter and 34% from year-ago levels, as charted below.

On the exit front, meanwhile, Q1 brought some renewed excitement to the moribund IPO market with well-received debuts of and . We also saw a few good-sized acquisitions.

Below we take a look at both investment and exit activity in more detail, breaking down totals by stage, looking at significant rounds, and tallying up largest M&A and public market exits.

Table of contents

• Late stage and technology growth
• Early stage
• Seed stage
• Exits
• IPOs
• M&A
• The big picture
• Methodology
• Glossary of funding terms

Late stage and technology growth

We鈥檒l start with late-stage dealmaking, which still attracts more money than any other stage, even at the current, somewhat depressed levels.

Altogether, $19 billion went into late-stage and technology growth rounds in North America in Q1, per SA国际传媒 data. That鈥檚 a bit of an uptick from the prior quarter, but still well below year-ago levels, as shown in the chart below.

Deal counts also picked up a bit sequentially, with 265 late-stage and growth rounds reported for North American companies in Q1.

The totals got a boost from some extra-large financings for a handful of companies, including:

• San Francisco-based , a green infrastructure investor and operator, secured $1.5 billion in a January financing;
• New York-based , a startup that offers takeout and delivery from several restaurants cooked in a single kitchen, picked up $700 million in a ;
• San Francisco-based , a cloud-based GPU company, raised a $320 million Series C in February; and
• South San Francisco-based , a startup developing oral therapies for patients with immune-mediated diseases, landed $259 million in a March .

But while jumbo-sized rounds did close over the course of the quarter, such deals remain far rarer than they were during the 2021 peak. Part of the reason is the highest-spending investors back then 鈥� and 鈥� are much less active now.

Early stage

Activity in Q1 was pretty robust at early stage, boosted by big rounds for companies focused on biotech, artificial intelligence and climate tech.

Total early-stage funding for the just-ended quarter came in at $13.2 billion 鈥� surpassing the prior two quarters. Round counts ticked down a bit, as average investment size rose.

For perspective, we charted funding and round totals for the past five quarters below.

Investors also backed some unusually large rounds at Series A and Series B. Standouts included:

• Sunnyvale, California-based , a developer of AI-enabled humanoid robots, snagged $675 million in funding;
• San Diego-based , a startup focused on precision medicine for chronic inflammation and fibrotic disease, closed on $400 million in Series A funding; and
• Denver-based , a startup developing technology to extract naturally occurring hydrogen from underground deposits, dug up $246 million in Series B funding.

Seed stage

Seed investment saw the sharpest quarterly decline of any stage, according to preliminary SA国际传媒 data.

For Q1, a total of $3 billion went into reported seed, pre-seed and angel rounds. That鈥檚 a decline of 14% from the prior quarter and a drop of 23% from year-ago levels.

Round counts fell too. For the full picture, we chart out total funding and the number of deals for the past five quarters below.

Because some seed rounds are reported weeks or months after they close, we expect the Q1 total to rise a bit over time. However, it鈥檚 unlikely this will change the overall narrative of a down quarter.

Although most seed deals are in the single-digit millions, we did see a few extra-large financings. One of the largest from Q1 was for , an immuno-dermatology startup that launched with $100 million in initial funding. Other big rounds went to , a provider of AI-enabled quality assurance software that picked up $47 million, and , which raised $37.5 million to work on laser fusion technology.

Exits

Of course, venture investors don鈥檛 only put money into startups. They expect to get returns when those companies mature and go public or get acquired.

As exit environments go, Q1 of 2024 wasn鈥檛 especially terrible. The IPO market opened up for a couple of splashy debuts, and acquirers wrote a few big checks, as detailed below.

IPOs

The IPO market, which has been very sluggish for months, picked up in March with the much-anticipated debuts of and .

Santa Clara, California-based Astera, a developer of data center connectivity technology with use cases in generative AI, made its splashy debut first on March 20. Shares soared in initial trading and continued to rise in the following days. Although off its peak, Astera recently had a market cap of more than $11 billion.

San Francisco-based Reddit, known for its lively online discussion forums, began trading two days after Astera. After surging in the early days of trading, shares sank a bit. Nonetheless, Reddit recently managed to maintain a market cap around $7.5 billion.

In addition to the two headlines, we also saw some smaller offerings by venture-backed companies including , and , which went public .

M&A

Acquirers also announced agreements to buy a number of venture-backed companies. Although in most cases prices were not disclosed, a few were made public. Of these, the largest included:

• San Francisco-based , a provider of software for government customers, agreed to to existing shareholder at a $1.8 billion valuation;
• Private equity firm agreed to Portland, Oregon-based , a provider of traceability tools, for $1.2 billion;
• is acquiring , a developer of therapies for patients with respiratory and inflammatory conditions, for $1 billion upfront and up to $400 million in milestone-based payments; and
• agreed to New York-based lottery app in a cash-and-stock deal valued at around $750 million.

The big picture

With Q1 now in the rearview mirror, it鈥檚 timely to consider what broad takeaways we can find in the data.

All in all, we鈥檇 say it wasn鈥檛 the most rollicking quarter. But there were a few indicators to bolster optimists鈥� case for a recovering startup investment climate.

For one, public investors showed there is appetite for large tech IPOs. And while we鈥檝e seen better quarters for M&A, we saw that acquirers are still willing to write big checks.

Seeing early-stage investment continuing to rise over the course of several quarters also looks encouraging. Today鈥檚 hot early-stage companies, the hope is, will become tomorrow鈥檚 sought-after IPOs.

That said, the data wasn鈥檛 strong enough to support the idea that startup investment is back in a big way. Investment is still far, far below the peak. Getting back there, if it happens at all, will require a long, uphill climb.

Methodology

The data contained in this report comes directly from SA国际传媒, and is based on reported data. Data reported is as of April 3, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. SA国际传媒 converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to SA国际传媒 long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. SA国际传媒 also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. SA国际传媒 includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the 鈥淪eries [Letter]鈥� naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a 鈥渧enture鈥� round. (So basically, any round from the previously defined stages.)

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