After a 2023 slowdown, the median round size in the US is rising again

After a 2023 slowdown, the median round size in the US is rising again

For a decade, the size of early-stage and seed funding rounds in the U.S. consistently increased until early 2023, when typical round sizes began to say no and the enterprise capital market saw a three-quarter funding slowdown.

The first half of this 12 months reversed that trend, with the median funding round size from seed to Series C increasing again, in line with an evaluation of Crunchbase data.

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This median increase was most pronounced for seed and Series A, rising above 2021 and 2022 amounts. For H1 2024, median round sizes could decline as more funds are added later — particularly for seed — but median amounts are more likely to be higher than 2023 amounts.

Although Series B and C amounts were lower than the 2021 median, they were higher in comparison with 2023.

Larger, concentrated facilities

Early funding has seen a significant increase in 2024. Most of this growth was driven by larger funding, in line with an evaluation of Crunchbase data.

Funding grew 12 months over 12 months from 2016 to the record 12 months of 2021. The median round size also grew during those years. And when funding fell, the median round size didn’t initially decline. When it trended down in 2023, it was still higher than the median value in 2020.

In line with the growth in funding in 2021, the largest jump in median round size occurred in the same 12 months in rounds from Seed to Series B. Series C saw the largest increase in 2020 after being phased out in 2019.

Let’s take a closer look at each stage, in addition to the bottom and top quartiles, to see how the U.S. financing environment modified during the growth years and the subsequent slowdown.

Seed

Compared to subsequent financing types, the seed stage shows the best variability in growth inside each quartile, indicating that the seed stage sometimes represents different stages of financing over a longer time period.

The upper quartile median was $3 million and above as of 2021.

“The competition is as fierce as ever,” he said. Maria Palmageneral partner in a San Francisco-based firm The Capital of Freestyle via email. “Pre-seed/seed valuations are still high, especially in AI, and many founders are looking to raise enough money to ride out the potential ups and downs of the market as they look to hit their next milestones.”

Median Series A

The median Series A was $12 million or more, and the top quartile was $20 million or more as of 2021.

“We’ve seen the time between seed and Series A rounds getting longer, which is leading to more mature and better assets seeking Series A funding,” he said. Renata Quintinico-founder of the San Francisco-based company Renegade Partners via email. “With higher post-money valuations in the seed round combined with better, more mature assets entering Series A rounds, we could see a trend of higher Series A prices over the next 6-18 months.”

Median B and C series off peak

Median rounds in Series B and C have declined from their peak, with the decline being less dramatic for Series B.

The median Series B amount as of 2021 is $27 million or more, and the upper quartile is $50 million or more as of 2021.

“We definitely saw an increase in the number of companies raising funds and the number of deals done in Series A and B rounds in the first half of this year,” he said. Ariel Tseitlin General Partner in the Bay Area Venture Partners Scale via email.

The C-series median in H1 2024 was below the peak but still above the 2020 median.

2024 is moving to artificial intelligence

Median funding rounds grew by 11%-30% for seed to Series C funding in the first half of 2024, with AI being one of the drivers of growth.

“Valuations are slowly starting to rise across the board. Some sectors, like AI and security, are seeing disproportionate valuation growth,” Tseitlin said. “Other sectors are seeing a flight to quality—high-growth, high-yield companies are being valued at levels that aren’t quite where we saw them in 2020 and 2021.”

For many investors, the increase in valuation and round size in H1 2024 was attributed to the impact of AI. Based on an evaluation of Crunchbase data, AI corporations’ funding doubled in Q2 2024.

“The biggest driver of any trend in VC funding is the impact of capital raised by AI companies,” Quintini said. “AI companies are at 1.6x valuations and the average round size is 1.4x compared to non-AI companies.”

Methodology

The data in this report comes directly from Crunchbase and is based on reported data. Reported data is from August 2024.

The variety of deals included in this evaluation of U.S. financing from 2015 to the first half of 2024 is:

  • Pre-seed and seed phase: over 74,500 grants
  • Series A: over 16,500 funding rounds
  • Series B: over 8,000 transactions
  • For Series C: the variety of transactions exceeded 3,500

It is necessary to do not forget that data delays are most noticeable in the earliest stages of a project’s operation.

Please note that every one funding values ​​are reported in US dollars unless otherwise noted. Crunchbase converts foreign exchange to US dollars at the prevailing spot rate from the date that funding rounds, acquisitions, IPOs, and other financing events are reported. Even if these events are added to Crunchbase well after the event is announced, foreign currency transactions are converted at the historical spot price.

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