Venture capital activity last year plummeted in many regions throughout the U.S., and Seattle was no exception.
According to a report released Thursday from San Francisco-based venture capital firm Telstra Ventures, the number of venture capital investments in the Seattle area fell 28% from the second half of 2021 to the second half of 2022. The mark tied the region for seventh, with New York City, for largest year-over-year decline in the number of venture capital investments.
"2022 was a tale of two stories in the VC industry," the report read. "The first half of the year saw record funding and the second half of the year saw the industry hit the brakes as public and private valuation tumbled."
Portland experienced the largest year-over-year decline in venture capital investments at 46%, followed by the Bay Area at 40%. Minneapolis (39%), Los Angeles (37%), San Diego (35%) and Washington, D.C. (31%) rounded out the companies with larger declines than the Seattle area.
Four regions experienced year-over-year increases in the number of venture capital investments: Philadelphia (14%), Dallas (8%), Salt Lake City (7%) and Raleigh-Durham (4%).
The Seattle area had the largest year-over-year increase, however, in the number of blockchain investments with a 98% increase. Miami and Boston tied for second with 47%.
Multiple local startups in the blockchain space have raised money in the last year. Seattle-based Sentio, which monitors and troubleshoots decentralized applications for clients, raised $6.4 million in February, while Seattle-based blockchain company Risc Zero raised $12 million in August. Renton-based Peer, a blockchain and social media startup, raised $14 million in July.
As for which sectors were hit the hardest, education technology companies received 46% fewer investments during the second half of 2022 compared compared with the same period the year before. Data and machine learning startups saw a 36% decline, while mobile and consumer startups saw a 33% decline. All sectors Telstra measured saw a decline, with blockchain experiencing the smallest decline at 5%.
Telstra looked at data from 40,000 startups in Crunchbase to make the report. The firm has invested in companies such as Box, DocuSign and Snap.
