The Top 10 Austin Tech and Startup Funding Rounds of Q1

The first quarter of 2020 may be the last one that seems relatively normal for the startup and venture capital ecosystems for a while. That's because the quarter's funding deals were largely complete by the time the coronavirus pandemic started causing major disruptions in the U.S.

For Austin, the last quarter of mostly normal activity represented a slight slowdown when compared to last year.

In Q1, Austin area startups raised a total of $466 million across 54 deals, according to the Venture Monitor Report by the National Venture Capital Association and PitchBook. That compares the record-setting $767 million in Q4 last year and the $624 million in Q1 2019.

But, while the total was down a bit, it represented a solid quarter overall -- bigger than Q3 2019 and more than in any other Q1 since the Venture Monitor report started tracking it in 2014.

It seems likely Q2 will be significantly different.

“The likely prospect of a serious recession looming (if it has not already begun) has critically affected the health of the startup ecosystem,” the report said. “The IPO market has rapidly fizzled out, and it’s possible that the M&A market could see hits as well, as large potential acquirers are also cutting costs.”

Meanwhile, early-stage funding has been at record levels in the past couple years, and the report’s authors say they expect deal terms to shift back in favor of investors and cut into startup valuations.

“We expect knock-on effects in deal activity to come in the next several quarters as early-stage startups focus on managing burn rates and extending cash runways,” they wrote.

But the NVCA and PitchBook said VCs still have money to deploy, and they said that traditionally a down economy has proven to be a good time for startup investing since startups become more capital efficient and are driven more to succeed.

Here are the top 10 Austin metro area funding deals from Q1:

It's worth noting that two of those companies -- RigUp and The Guild -- reported layoffs in the weeks and months following their new funding.

“With the economy at a standstill, maintaining operations, sales, and headcount at companies is the priority, but it is understandably proving challenging with most of the population sheltered in place,” Bobby Franklin, president and CEO of NVCA, wrote. “Startups will see some options for federal relief from the CARES Act, while others will look to alternative means for cutting costs and capital infusion. The reality is that it will be a tough road ahead in 2020, but as we’ve seen in past downturns, resilience is in the fabric of this industry."