Venture capital activity in the Seattle area picked up slightly during the third quarter but remains far off pace from 2022 and red-hot 2021.
According to new data from Seattle-based PitchBook Data and the National Venture Capital Association (NVCA), Seattle-area startups secured $1 billion across 79 deals during the third quarter. Through the first nine months of the year, local startups have landed $2.7 billion across just under 280 deals.
Those numbers, from the PitchBook-NVCA third quarter Venture Monitor report, put the region far off pace from last year, when Seattle-area startups landed $7.8 billion across 479 deals. In 2021, local startups secured $9.2 billion across 494 deals.
"Overall, the market remains under considerable stress. More companies are taking bridge, continuation or down rounds," the report read. "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. Finally, sectors like AI and life sciences lean into key competencies of the US industrial and research bases."
Despite the smaller overall numbers, multiple local startups have raised impressive funding rounds during the third quarter. In September, Seattle-based biopharmaceutical company Avalyn Pharma raised $175 million for its inhaled drugs aimed at pulmonary fibrosis. Kirkland-based traffic management company Inrix raised $70 million from Morgan Stanley in August, while Seattle-based data analytics startup MotherDuck raised $52.5 million in September.
Across the U.S., the report said companies have landed $125.9 billion in venture capital across an estimated 11,935 deals through the end of September. According to the report, that deal value is on pace to be the lowest since 2019. U.S. companies landed $244.5 billion in venture capital last year and $347.3 billion in 2021.
The report noted more than 51,000 venture-backed companies are still private, which puts pressure on startups to attract investors. Massive venture capital rounds, meanwhile, "have become increasingly uncommon, in part due to the pullback from nontraditional investors and to the ability of strong companies that are well positioned from a cash standpoint to stay out of the market while it is in their best interest."
