Venture capital funding for Seattle-area startups dropped off during the fourth quarter.
According to new data from Seattle-based PitchBook Data and the National Venture Capital Association, local startups landed $760 million across 81 deals during the fourth quarter, down from $1.1 billion across 88 deals during the third quarter.
Seattle-area startups in all of 2023 landed $3.6 billion in venture capital funding across 369 deals, according to the PitchBook-NVCA fourth quarter Venture Monitor report.
That's less than half the funding local startups attracted in 2022, when they landed $7.8 billion across 479 deals; in 2021, they landed $9.2 billion across 494 deals.
"From interest rates to foreign conflict, the world looks very different than it did two years ago, and a new set of problems needs to be solved," the report's executive summary read. "While the United States has been insulated from the worst effects of many of these issues, there has been a broad recognition of the necessity to invest in both the capacity and the capability of the U.S. public and private sectors."
Despite the drop in funding, some local startups still landed impressive funding rounds during the fourth quarter. Seattle-based Parse Biosciences raised a $50 million round in December, while Seattle-based software startup Zuper raised $32 million that same month. Kirkland-based cybersecurity company Chainguard raised $61 million in November.
Local venture capital firms also made headlines during the fourth quarter. Seattle-based Tola Capital closed a $230 million fund, its third, in November. New Seattle-based firm Bison Ventures in November closed its first fund, totaling $135 million.
Nationally, startups landed $170.6 billion across 15,766 deals in 2023, down from $242.2 billion across 17,592 deals in 2022 and $348 billion across 19,025 deals in 2021, which was a record year.
Pre-seed and seed deals nationally dropped to $14.6 billion in 2023 from $24.2 billion in 2022.
"Although not all large investors pivoted away from their seed strategy, the departure or slowed activity of some firms dented 2023 annual deal value that flowed into pre-seed and seed," the report read.
