Step-Ups & Duration : The Shape of Things to Come to the Series A in 2024
The typical software startup raised their Series A 15 months after raising their seed at 2x their seed valuation.
A year ago, that Series A would have been raised three months earlier at 3.5x the valuation.
Here’s another way of visualizing the data. The red dot is 2023 - the other years are in grey. Across rounds for the 50th & 75th percentile of companies, step-up valuations are the lowest multiples in about ten years.
The time between rounds has also lengthened - something all of Startupland felt throughout 2023.
In almost every category, the time between rounds is also at decade highs.
In 2024, I expect most of these figures to revert to the mean - not the peaks of 2020-2021, but more akin to 2018.
The public valuation environment & pace of venture capital investments mirror those years better than others.
Five years ago, valuations continued to grow, competitive rounds didn’t last in market for more than a week or so, & pre-emptions did occur. But most of the market operated at a steady cadence with predictable figures for traction, valuation, & dilution.
CEO at PRAY.COM
1 年Tomasz Tunguz ????
COO | CFO | Advisor | Investor | Harvard MBA
1 年Thanks, Tomasz Tunguz. Not sure if you have the data, but it’d be interesting to see what Series A valuation these companies were initially seeking. So, was the longer time period to raise at an initially sought 2x seed, or was the company taking more time to raise because the market was resolving initial multiple assumptions down to a lower clearing multiple?
Insightful analysis on the current startup landscape trends. The data suggests a notable shift in valuation dynamics and round timelines, with 2024 poised for potential reversion to a more typical pattern. Intriguing observations that align with the broader venture capital environment. Thanks for sharing these valuable insights! ??
Senior Sales Manager/Business Direct at Etisalat UAE
1 年Impressive speed and adaptability in the startup funding landscape. The shift from 3.5x to 2x in just a year underscores the dynamic nature of the industry.
Head of Insights @ Carta | Data Storyteller
1 年Very solid data viz Tomasz