US Funding Recovers, Driven by AI

After a dip in early 2023, U.S. seed and early-stage funding rounds are experiencing a rebound, with median round sizes increasing across all stages from seed to Series C. This resurgence is primarily attributed to the growing impact of ai on the venture capital landscape.

• The median round size for seed and Series A funding has surpassed 2021 and 2022 levels, indicating a strong investor appetite for ai-driven startups.
• While Series B and C median amounts are still below their 2021 peaks, they are significantly higher than in 2023.

AI Fuels Growth in Larger Fundings

Much of the increase in early-stage funding is driven by larger investments, particularly in companies leveraging ai technologies. The influence of ai on valuations is evident across all funding stages.

Seed Funding: A Competitive Landscape

Seed funding continues to be highly competitive, with valuations remaining high, especially in the ai sector. Founders are seeking larger seed rounds to navigate market uncertainties and achieve key milestones.

• The median upper quartile for seed funding has been $3 million or more since 2021, indicating significant investor interest in early-stage ai startups.

Series A: Maturing Assets, Higher Prices

The time between seed and Series A rounds has lengthened, resulting in more mature and robust companies seeking Series A funding. This trend, combined with higher post-money valuations in seed rounds, suggests higher prices for Series A rounds in the near future.

• The median Series A round size has been $12 million or more since 2021, with the upper quartile exceeding $20 million.

Series B and C: Down From Peak, But Still Strong

Median round sizes for Series B and C are below their peak levels, though Series B has experienced less of a decline. Despite the decrease, both stages remain above their 2020 median values.

• The median Series B round size has been $27 million or more since 2021, with the upper quartile reaching $50 million or more.
• Series C median rounds, while down from their peak, are still above the 2020 median.

AI Drives Valuation Growth

The surge in ai investments is a significant driver of valuation growth and increased round sizes. Ai-focused companies are experiencing disproportionately high valuation inflation compared to other sectors.

• Funding to ai companies doubled in Q2 2024, according to Crunchbase data.
• Valuations for ai companies are 1.6x higher, and average round sizes are 1.4x larger compared to non-ai companies.

Methodology

The data in this report is based on Crunchbase data and reported as of August 2024. Crunchbase converts foreign currencies to U.S. dollars using the prevailing spot rate at the time of reporting.

• Over 74,500 fundings for pre-seed and seed.
• Over 16,500 fundings for Series A.
• Over 8,000 fundings for Series B.
• Over 3,500 fundings for Series C.