The new year did not bring a fresh start for Greater Washington’s venture capital ecosystem as, yet again, the number of venture capital deals dropped to a new low.
There were just 51 deals regionally in the first three months of 2024, the fewest in a single quarter going back to at least 2014, when PitchBook began collecting the data. That’s compared to 95 during the same period last year and 75 in the final three months of 2023, according to the latest Venture Monitor report released Thursday. The report is published quarterly by data analytics firm PitchBook and the National Venture Capital Association.
One bright spot: The VC deals that are getting done continue to be significant. The dollar value of VC deals in Greater Washington grew 11% year-over-year to $813.2 million as the region saw three “mega-rounds,” or funding rounds surpassing $100 million — more than it does in a typical quarter.
Across the U.S., there were 2,882 venture capital deals — the lowest quarterly level since 2017 and down from 4,026 during the same period last year. The value of the first quarter deals nationally was $36.6 billion, or 29% lower than the first quarter of 2023. It reflects a continued trend driven by a combination of global unrest, higher interest rates and general economic uncertainty.
“Investor expectations and benchmarks have increased for deals, leading to fundamentally strong companies attracting investment, while those unable to achieve the growth and profitability characteristics expected by today’s VCs are struggling to find capital,” John Gabbert, founder and CEO of PitchBook, said in a statement.
To that end, the biggest VC deal in the D.C. region during the first quarter went to a startup whose founders have lengthy resumes. Clasp Therapeutics, a cancer treatment biotech, was spun out of Johns Hopkins University and landed $150 million from a handful of investors in March. Its founders include Dr. Bert Vogelstein, who has a track record of successful ventures in the cancer diagnostics space. The firm will establish a new 8,350-square-foot office in Rockville.
McLean health care technology firm Zephyr AI Inc. raised $111 million in a Series A round from Revolution Growth, Eli Lilly & Co., Jeff Skoll, EPIQ Capital Group and others to work on its oncology and cardiometabolic disease technologies.
Arlington’s Lightshift Energy raised $100 million to expand on its work building energy storage systems. And not far behind, Arlington human resources software company PerformYard raised $95 million — its first outside funding since a $3 million seed round in 2013.
Rounding out the biggest VC deals locally was Arlington’s Advantia Health, which raised $82.7 million, according to PitchBook and a Securities and Exchange Commission filing. It’s unclear who contributed to the funding round since Advantia hasn’t issued a press release about the deal.
