Ah, 2023 – the year where startup funding feels like it’s on a rollercoaster. While North American startup investments have had their highs and lows, the trend since Q1 leans towards a dip.
Fresh off the press data reveals that during Q3, a whopping $31.4 billion was invested across varying stages in startups from the U.S. and Canada. Though it might seem like a big number, this represents a marginal 3% dip from Q2. Yes, it’s a drop, but hey, sometimes even giants stumble.
The Not-So-Old Days:
A stroll down memory lane to 2016 reminds us of when retail investors couldn’t join in the high-growth startup party. However, federal law amendments have now paved the way. Fancy becoming a venture capitalist on a budget? For as little as $100, you can snag equity and the best seats in the house to your favorite startups.
Later Stage Investments – Still Going Strong:
Q3 brought sunshine for later-stage investments, particularly with an uptick in the cleantech and AI sectors. The figures? A cool $16.8 billion, showing an 8% QoQ rise, even though it’s down 15% YoY. Some heavyweights making waves were generative AI powerhouse, Anthropic, which scored a $1.3 billion round courtesy of Amazon.com Inc. Meanwhile, EV battery recycling champ, Redwood Materials Inc., locked in a $1 billion Series D round with big players like Capricorn Investment Group and Goldman Sachs cheering them on. Other significant fundings included Databricks Inc. ($500 million) and Axiom Space Inc. ($350 million).
Early Stage Investments – A Slight Wobble:
The early-stage sector experienced a colder Q3, logging a 16% QoQ decrease with $11.5 billion invested. With just 662 reported deals, this was a significant drop both QoQ and YoY. Despite the slowdown, deep-tech still had its moments. Data integration startup, Denodo, bagged $336 million in Series B funding, while Sierra Space Corp. raised a neat $290 million. Keep an eye on this space; early-stage investments can often hint at upcoming IPOs or big buyouts.
Seed Stage Investments – Holding the Fort:
The seed-stage corner saw a steady Q3, with investments around $3.1 billion. But here’s the catch: the number of deals shrank considerably, plunging to just above 1,400, a record low. Still, sectors like biotech had their day in the sun, with the top five seed investments raking in over $260 million.
Crowdfunding – The Unsung Hero:
While traditional funding avenues have experienced turbulence, crowdfunding remains resilient. Platforms like StartEngine empower retail investors to back startups before they skyrocket. With a track record of leading the crowdfunding arena for two consecutive years, StartEngine itself seems poised as a golden goose.
Wrap Up:
In the wise words of Jack Ma, “Opportunities lie in the place where complaints are.” If you’re keen to follow the likes of Bill Gates and Mark Cuban, maybe it’s time to look into early-stage startups. Dive deep, explore, and remember: investing smart is the way to go.
