The venture capital slowdown that many of us have been riffing about over the past nine months or so is coming to light. A new Q3 report from PitchBook and the National Venture Capital Association shows Austin startups raised a few bucks shy of $590 million across 78 deals in the three months that ended Sept. 30.
You have to go all the way back to Q2 2019 to find a worse quarter in Austin.
That said, Austin and the rest of the country are coming off a couple of the hottest years ever for startup funding. Since 2019, deal flow in the Austin area has often been above $1 billion per quarter, including the massive $2.7 billion quarter we had in Q1 2022. And this year has been pretty strong, too. Q1 and Q2 both generated around $1.1B in funding for local companies and more than 100 deals per quarter, according to PitchBook data.
Meanwhile, if you go back to 2015, when I started covering startups at Austin Inno, it was common to have quarters in the $250 million-$500 million range.
Looking at the rest of the globe, PitchBook's report shows Q3 represented the lowest overall venture deal value in six years and the lowest deal count in about three.
"However, the ecosystem remains well capitalized, and additional sources of liquidity from federal programs like the Inflation Reduction Act and the CHIPS and Science Act are becoming available," the report stated. "Finally, sectors like AI and life sciences lean into key competencies of the US industrial and research bases. Further investment in research-heavy sectors like these could unlock significant value. The last 18 months have seen a level of tumult in the economy that would have been unimaginable just a few years earlier, but amid stormy seas, VC remains well positioned to ride the waves."
Now, here's a quick look at the top five deals from Q3 in the Austin area:
1. SpyCloud - $110 million
2. HiddenLayer - $50 million
3. One Model - $41 million
4. Black Ore - $40 million
5. Diligent Robotics - $26.5 million
