Reports are piling up that show venture and startup investing is dialing back to pre-pandemic levels.
Last week, Pitchbook Data said, in a peek at its quarterly Venture Monitor report, which it releases Thursday, that the amount invested in U.S. startups fell to $37 billion in the first three months of this year. That's the lowest level in 13 consecutive quarters. It also said the number of deals done fell below 3,000 for the first time in five years.
CB Insights posted a report Wednesday that said the amount invested in startups in the first quarter globally dropped to $58.6 billion, down 13% from Q4 of last year. The 7,024 deals in the first quarter were a drop of 12% from the fourth quarter of 2022. Both are back around global numbers posted in 2020.
Ernst and Young posted similar numbers in a report it published, predicting more layoffs, companies tightening their belts and getting lowered valuations.
"Companies want to avoid fundraising right now if they don’t have to, which means having to look at some unpleasant alternative solutions including down rounds, looking at headcount and considering hybrid work models," Jeff Grabow, EY's U.S. venture leader, said. "Despite challenging market conditions, fundraising will continue, but deals will be more investor-friendly and take longer to close than we have seen in recent history."
Here's a look at some Bay Area venture and startup news from midweek.
Fundings
- Alice Technologies Inc., Menlo Park, $13 million, Series B extension: Hong Kong-based real estate developer Swire Properties provided the funding for an extension of a 2021 round for this construction project management software provider. This brings the total funding raised in the round to $47 million. Alice also secured an undisclosed amount in a term loan with Bridge Bank.
- ImmuneBridge Inc., San Francisco, $12 million, Seed: Insight Partners and M Ventures led the funding of this developer of immunotherapies for blood cancers and solid tumors. Merck KGaA, One Way Ventures and Gaingels also invested.
- Noya Inc., San Francisco, $11 million, Series A: Union Square Ventures and Collaborative Fund led the funding of this company that develops technology that captures carbon produced in industrial processes. Lowercarbon Capital, Fifty Years, MCJ Collective, EQT Foundation, Climate Capital and Nexwell Group also participated.
- Absolute Labs Inc., San Francisco, $8 million, Seed: Investors in this Web3 customer engagement software provider include Aglaé Ventures, Alpha Praetorian Capital, The Luxury Fund, Near Foundation, MoonPay, Plassa Capital, Punja Global Ventures, Samsung Next, Sparkle Ventures and W3i.
- martini.ai Corp., Santa Clara, $6 million, Seed: Neotribe led the funding of this corporate credit market information provider. Rocketship.vc also invested.
M&A
- Watershed Technology Inc. has agreed to buy IERS LLC, which does business as VitalMetrics. The San Francisco carbon emissions analytics startup didn't disclose the terms of its planned acquisition of the Santa Barbara emissions accounting and data firm.
- Technical Safety Services LLC acquired Precision Air Technology. The Berkeley-based equipment testing services provider didn't disclose the terms of its acquisition of the Morrisville, North Carolina-based provider of controlled environment testing and certification services for health care and pharma businesses.
- Vander-Bend Manufacturing LLC acquired Omni Components Corp. San Jose-based Vander-Bend, which is a precision machining portfolio company of Aterian Investment Partners, didn't disclose the terms of its acquisition of the Hudson, New Hampshire-based maker of precision mechanical medical products.
Funders in the news
- Reach Capital raised $215 million for its fourth fund. The San Francisco venture firm focuses on investing in education technology startups.
- Future Ventures raised $200 million for its third fund. The Los Altos venture firm is co-led by Steve Jurvetson and Maryanna Saenko.
- MetaVC Partners raised a $62 million fund. The San Francisco firm focuses on investing in early-stage startup companies that deal with metamaterials.
- Overwater Ventures raised $20 million for its debut fund. The firm is led by Kristina Simmons, who was previously with Andreessen Horowitz and Khosla Ventures.
