Even as U.S. venture funding falls from peak levels, things are still far from slow. Investors have poured more than $16 billion into Series A rounds alone so far this year.
Moreover, the lineup of funded companies is mesmerizingly diverse, touching on spaces from virtual reality to mimic hallucinogenic mind trips to portable nuclear microreactors. To say that a single sector or handful of sectors dominate would be misleading indeed.
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That said, even amid all this abundant variety, a number of themes stood out. We looked at sectors including biotech, financial services, and real estate and picked out a few investment themes around which a lot of Series A deals seem to cluster. Here are five:
1. Immunotherapy and immune system response
Biotech is typically the sector where we see many of the biggest Series A rounds. In large part, this represents an acknowledgement by investors that developing groundbreaking therapies isn’t something one can do cheaply.
Among the largest 2022 Series A rounds, we saw a high number of companies working on treatments to stimulate the body’s immune response. We put together a list of 17, which have collectively raised over $530 million in Series A funding this year:
The largest funding recipient on our list is Seismic Therapeutic, a developer of machine-learning technology for immunology drug development, which raised $101 million in a February round. Other big Series A rounds went to Pheast Therapeutics, and Rondo Therapeutics, two immuno-oncology startups.
So far, 2022 has been a bad year for cryptocurrency valuations, but a pretty good one for crypto-related venture funding.
Among Series A rounds, crypto was a commonly recurring theme. For this year, we curated a list of 17 crypto-related companies that closed rounds collectively valued at over $900 million:
By far the largest round went to crypto trading platform FTX, which pulled in $400 million in a January financing. Next up was iTrustCapital, which raised $125 million for a platform with offerings including crypto trading through retirement accounts. CoinTracker, a crypto tax and compliance tool that closed on $100 million, follows.
Notably, all three of the biggest crypto deals on our list happened in January, when cryptocurrency valuations were much higher and bearishness wasn’t the prevailing market sentiment for the space.
3. Property rental-focused startups
More than 100 million Americans live in rental housing, representing over one-third of U.S. households. That adds up to an undeniably enormous market for tools and services, many of which are scaling up with venture funding.
Services and platforms for renters, rental property investors and owners, and property managers pulled in at least $245 million in U.S. Series A funding so far this year, per Crunchbase data. We curated a list of a dozen companies:
Rental property investment platforms and tools were particularly popular with Series A backers, the largest round on our list. Two companies offering platforms for buying shares in rental properties—Flock Homes and Arrived Homes—pulled in rounds of $26 million and $25 million, respectively. Other sizable funding recipients include RentRedi, a provider of software for landlords, and Nomad, a provider of flexible leasing services.
4. Carbon tracking and emissions-reducing technologies
For those who track apocalyptic climate news, there’s been no shortage of harrowing items of late: An unseasonably early scourge of wildfires in the U.S. Southwest, worsening Middle Eastern dust storms, and sweltering heat waves in India and Pakistan. And the list goes on.
For investors and startup founders, the climate crisis is feeding a sense of urgency to fund and scale technologies that could play a role in tracking and reducing carbon emissions. At the Series A stage, we put together a list of 11 startups in this vein that collectively raised over $280 million this year:
Leading the pack was Flowcarbon, a blockchain startup focused on carbon offsets, which pulled in $70 million in May. Meanwhile, Brimstone Energy, a developer of carbon-negative cement, and Antora Energy, a provider of zero-carbon thermal energy storage, landed $55 million and $50 million, respectively.
5. Legal services
Most people and businesses that have had to hire a lawyer report the same experience: It’s expensive. Venture capitalists, a cohort known to employ plenty of lawyers themselves, know this as well as anyone.
Thus, we shouldn’t be entirely surprised to see that tools to make legal work faster and more effective, and to help locate the best attorneys, have pulled in a fair amount of Series A funding this year. Crunchbase tallied up at least six, which have collectively raised over $46 million in 2022:
Zero, an AI-powered tool that automates time-consuming administrative tasks for lawyers, snagged the largest Series A, with $12 million, followed by Legal.io, a marketplace for legal talent and tools, which raised $11.6 million.
Series A in a time of tighter financing
The size and variety of Series A funding activity, overall, is one of the more optimistic indicators in a bearishly trending investment environment. Across the startup sphere, investors are warning portfolio companies to budget wisely. Famed accelerator Y Combinator is urging startups to “plan for the worst.”
The nice thing about Series A, when it comes to market cycles, is that investors can be pretty sure that by the time today’s portfolio companies are mature enough to contemplate pre-IPO rounds and exits, we’ll be in a different place. Hopefully, it will be a more bullishly trending one.
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Illustration: Dom Guzman
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