STRV Tech Trends Report March '23

In a bit of good news, the tech sector’s layoffs in February were lower than the previous month and overall funding raised saw a slight increase — although the total amount invested was three times less compared to ‘22.

Biotech takes back the top spot in leading industries. Spotify, TikTok, YouTube and other apps occupying your home screen are pounding out new features. Meta's Q4 revenue surprised with a 20% share surge. And look out, or just look — ‘cause Nokia is back in a fancy new getup.

Below are the month’s most notable news and numbers, including year-on-year (YoY) and month-to-month comparisons as well as leading industries and companies worthy of attention.

General Overview

This February, the total?number of companies that raised funding was 1,089, compared to 1,187 in February of the previous year. This is an 8% YoY decrease. The?total funding raised was $12.84 billion, with a 62% YoY decrease; in 2022, February clocked in at $34.19 billion. The?median deal size was $4.6 million, a 23% YoY decrease compared to the $6.8 million in February of last year.

Leading Countries

*based on the number of companies that raised funding (not total funding)

1. USA?— with?543?companies?(16% YoY decrease),?$7.25B?in cumulative investment (65% YoY decrease) and a median deal size of?$5M?(29% YoY decrease)

2. UK?— with?84?companies?(26% YoY decrease),?$1.14B?in cumulative investment (59% YoY decrease) and a median deal size of?$5M?(26% YoY decrease)

3. Canada?—?(up one spot)?with?65?companies?(on par with last year),?$892M?in cumulative investment (28% YoY decrease) and a median deal size of?$5M?(on par with last year)

4. India?—?(down one spot)?with?60 companies?(on par with last year),?$513M?in cumulative investment (57% YoY decrease) and a median deal size of?$2.8M?(22% YoY increase)

5. Germany?—?(new to list)?with?48 companies?(81% YoY decrease),?$189M?in cumulative investment (81% YoY decrease) and a median deal size of?$3.2M?(37% YoY decrease)

Conclusion:?Funded companies and raised funding increased slightly from last month, but the total invested amount drastically decreased by almost three times compared to last year, affecting all countries. Canada and India have once again swapped spots.

Leading Industries

1. Biotech?(up one spot)

102 companies?(29% YoY increase),?$1.97B?in cumulative investment (22% YoY decrease) and a median deal size of?$10.3M?(23% YoY increase).

The top 3 biggest funding rounds are attributed to?Roivant Sciences ?(biopharmaceutical company focused on developing medicines and healthcare tech for patients) -?$200M?(total funding: $2.3B),?Supernus Pharmaceuticals ?(develops and commercializes products for treating the central nervous system) -?$150M?(total funding: $689.5M)?and?Hemab ?(clinical-stage biotech company developing prophylactic therapeutics for serious, underserved bleeding and thrombotic disorders) -?$135M?(total funding: $190M).

2. Fintech?(down one spot)

100 companies?(38% YoY decrease),?$1.7B?in cumulative investment (74% YoY decrease) and a median deal size of?$7M?(on par with last year).

The top 3 biggest funding rounds are attributed to?Juniper Square ?(operates an investment management platform for commercial real estate, private equity and VC companies) -?$133M?(total funding: $241M),?WisdomTree ?(global financial innovator offering a diverse selection of exchange-traded products [ETPs], models and solutions) -?$126.4M?(total funding: $126.4M)?and?Carmoola ?(fast, eco-friendly car financing with online payment options and in-app management, using open banking and credit data to offer better value and green discounts) -?$115.1M?(total funding: $198M).

3. AI

85 companies?(30% YoY decrease),?$548M?in cumulative investment (82% YoY decrease) and a median deal size of?$4.6M?(52% YoY decrease).

The top 3 biggest funding rounds are attributed to?Ushur ?(cloud-based AI company that automates service workflows in the backend process and conversational interfaces) -?$50M?(total funding: $92M),?Tome ?(productivity tool providing an AI-powered storytelling format for transforming ideas into visually appealing narratives) -?$43M?(total funding: $75.3M)?and?Apkudo ?(helps companies manage connected devices to maximize device value, minimize labor costs and reduce e-waste) -?$37.5M?(total funding: $65.9M).

4. Healthcare

80 companies?(18% YoY increase),?$731M?in cumulative investment (44% YoY decrease) and a median deal size of?$3.1M?(54% YoY decrease).

The top 3 biggest funding rounds are attributed to? Syngene ?(integrated contract research, development and manufacturing firm) -?$145.2M?(total funding: $207.7M),?Vytalize Health ?(provides ACO solutions to help doctors accelerate the transition to value-based care) -?$100M?(total funding: $175.5M)?and?ImmunityBio ?(an offshoot of Soon-Shiong's NantWorks conglomerate, developing molecular-level cell-based treatments for diseases) -?$50M?(total funding: $389.7M).

5. Ecommerce

64 companies?(29% YoY decrease),?$754M in cumulative investment?(68% YoY decrease) and a median deal size of?$4.6M?(43% YoY decrease).

The top 3 biggest funding rounds are attributed to?Floward ?(online flowers and gifts ecommerce solution sourced from local and international brands with same-day delivery schedules) -?$156M?(total funding: $186.3M),?LeafLink ?(wholesale management platform that connects cannabis brands and retailers) -?$100M?(total funding: $479M)?and?Gousto ?(online meal-kit manufacturer and retailer using AI and automation to provide extensive choice and personalization) -?$60.1M?(total funding: $651.6M).

Conclusion:?Biotech takes the lead this month over fintech, with no other notable changes in rankings as the rest of the industries suffer from decreased investments.

Monthly Highlights

Old Dogs, New Tricks

• Spotify?revealed its major mobile app redesign.
• Instagram?launched "Channels," ?allowing creators to share public, one-to-many messages with followers.
• TikTok?added new features , updated post violations enforcement and launched in-app shopping with brands like Pacsun and KimChi Chic.
• YouTube?introduced multi-language audio track support ?to enable dubbing and reach a wider audience.
• Google?is introducing new features , such as partial custom tabs and auto-filling passwords, to improve the in-app browsing experience on Android.
• Mark Zuckerberg?introduced Meta Verified , a paid subscription service for Facebook and Instagram starting at $11.99.
• Instacart?launched two new features , queued batches and multi-store add-on orders, to give shoppers more flexibility and opportunities to earn.
• ByteDance?(TikTok parent company)?launched new social media platform Lemon8 , which pays creators to post. It also owns Feishu, the Slack-like workplace collab app seeing increasing popularity in China.
• Netflix?launched its password-sharing crackdown in Canada.
• Nokia?redesigned its logo ?to shift from its image as a mobile phone company to its focus on 5G equipment.

Stonks

• Meta's Q4 revenue?beat estimates ?with a 20% share surge while?Apple?saw its first revenue decline ?since 2019.
• Peloton's strong subscription revenue growth?led to a 26% share increase ?and?Roblox's Q4 revenue?of $899.4 million?resulted in a 26% share surge.
• Uber's Q4 revenue?increased by 49% YoY to $8.6 billion , and?Instacart?saw a 50%+ YoY revenue jump ?and an 80%+ gross profit surge.
• Adidas' shares?plummeted 11% , and?SoftBank?reported a $5.8 billion quarterly loss ?on startup investments.
• Airbnb?had its first profitable year , with a 40% revenue growth to $8.4 billion and a 16% listing growth to 6.6 million.
• Zoom?earnings exceeded expectations , resulting in share increases.
• Netflix?lowered its subscription fees ?in over 100 regions, and?Snapchat's?stock?slid despite strong user growth ?due to minimal Q4 revenue growth.
• Alphabet?and?Starbucks?missed major targets .
• Amazon?beat its revenue projection .

You Guys Good?

• Warner Bros. Discovery?saw a $2.1 billion loss in Q4 , despite the popularity of programming like HBO’s "The Last of Us" and games like "Hogwarts Legacy.”
• eBay's active buyers?have declined seven quarters in a row , causing investor concern.
• Adobe's shares?dropped following the antitrust suit ?to block its $20 billion Figma deal.
• CEOs from Apple and Intel?reduced their salaries ?due to economic decline.

NewsGPT

• Spotify?launched "DJ" ?for personalized music and AI-powered spoken commentary.
• Google?lost $100 billion in market value ?after its chatbot, Bard, made an error.
• Alibaba?is developing an AI chatbot ?to rival ChatGPT, while?Elon Musk?criticized ChatGPT's ethical standards.
• Snapchat?launched AI chatbot "My AI" ?and?OpenAI?released a free tool to detect AI-generated text.
• Microsoft?added premium features to Teams , and?Bing?and?Edge?will integrate a more powerful OpenAI model.
• Meta?is forming a team ?to incorporate generative AI tech into its social platforms.
• 98% of US companies?plan to use AI for layoff decisions in 2023.

Lay Off the Layoffs, Will Ya?

Layoffs in February decreased significantly, from ~85k to ~36k employees.

• Twitter?laid off another 10% , going from 7.5k employees (before Elon Musk) to 2k
• Zoom?announced a 15% staff layoff
• Yahoo?is laying off 20% of its staff ?(1.6k employees)
• Twilio?will lay off 11% of its staff
• GitHub?(owned by Microsoft)?is laying off 10% of its staff
• Poshmark?is laying off an undisclosed number ?of its 800+ employees
• Pinterest?laid off another 150 people

Startups to Watch

Tome

($43M?in latest funding) Tome is an?AI-powered storytelling productivity tool?that helps users transform ideas into visually appealing narratives. The funding will be used to build more value for its growing community and hire additional ML, engineering, design and product talent.

Unyoked

($19.1M?in latest funding) Unyoked provides?wilderness cabins?to promote eco-friendly and off-the-grid vacations. The funding will be used for expansion in the U.K., Scandinavia, Germany, Benelux, Austria and Switzerland.

Lavender

($11M?in latest funding) Lavender is an?AI email assistant software?that helps write better sales emails by providing coaching, prospect research, email confirmation and more. The funding will be used to expand its team and introduce new AI-powered features.

AnswersNow

($11M?in latest funding) AnswersNow offers?personalized virtual ABA therapy?to families with individuals with autism and other developmental disabilities. The funding will be used to expand the reach of its ABA therapy services across the U.S., to grow its skilled team of Ph.D. and Master’s-level clinicians and to improve the user experience of its interactive virtual platform.

Capsule

($4.8M?in latest funding) Capsule is a?video editing platform?designed to produce short-form videos that look and feel more polished. The funding will be used to make key hires in engineering, product design and marketing to help commercialize its AI Studio product.