Every so often at Crunchbase News, we take it upon ourselves to read through every sizable recent seed funding round. It’s an exercise that leads to both information overload and a vague sense of where the startup future is headed.
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The latest data-dive focused on seed and pre-seed rounds of $2 million or more announced in 2021 — of which there are a little over a thousand reported. The analysis found a few investment themes that stand out as especially popular.
The ones we picked to highlight in our survey include labor-saving robotics, mental health, alternative protein and real estate software. These aren’t brand-new investment sectors, but their continued strong showing indicates VCs see plenty more growth ahead in these spaces.
As to the futuristic vision that these seed funding trends collectively represent, it’s largely a continuation of technology-driven shifts already underway. In other words: Seed startup activities point us toward a future in which we spend more time on our devices, while software and machines do more of our actual work, and we pick through an even broader array of discretionary purchases and digital activities.
Below, we break out four themes in more detail, along with curated lists of funded companies.
Seed Investment Theme #1: Robotics
The world is full of dull and routine work, and there aren’t enough people able or willing to do it at prevailing wages. This state of affairs — combined with increasing sophistication and falling costs of robotics technology — seems to be fueling a rise in seed-focused startups looking to automate a host of unloved tasks.
We put together a curated list of robotics startups that raised seed funding so far this year, featuring companies taking on industries from shipping to farming to food service. It includes: Bear Flag Robotics, a developer of autonomous tractors; Pickle Robot, maker of bots for package handling and logistics; and Chef Robotics, which is bringing robotics to restaurant kitchens.
As these are seed-stage companies, it’s too soon to tell if their offerings will gain broad industry uptake. For now, it’s clear at least that investors are impressed by the labor-saving potential.
Seed Investment Theme #2: Mental Health
Anyone who follows the intersections of mindfulness, mental health and venture funding is probably aware that there’s plenty of later-stage activity in the space. Two of the pioneering mindfulness apps, Calm and Headspace, are already securely in unicorn territory. Funding for U.S. mental health startups, meanwhile, hit an all-time high last year, with over $900 million invested.
But apparently, investors don’t perceive this as a space where early entrants will squeeze out up-and-coming founders. Rather, there’s quite a lot of deal volume and some pretty large seed rounds going to mental health and mindfulness startups, including 11 in our curated list that have raised funding this year.
Where’s the money going? Intriguing companies starting up include Mantra Health, a digital mental health platform for university students, Cutback Coach, an app for reducing alcohol consumption, and Spill, which offers mental health support to employees, and is accessible through Slack.
Seed Investment Theme #3: Animal-Free Protein
It’s been many years since alternative protein startups first started populating our seed funding tallies. Since then, several former upstarts have grown into mature, highly valued companies, including plant-based burger rivals Beyond Meat, which is publicly traded, and Impossible Foods, which is reportedly eyeing an IPO at a potential $10 billion valuation.
Investors seem to think there’s potential for plenty more big exits as well, as the meatless meat space is still seeing significant seed-stage funding. Several have raised funding this year, as featured in this curated list.
The latest startup crop is looking a step beyond veggie burgers. Our list includes Jellatech, which is developing gelatin and collagen derived from cells instead of animals, Next Gen Foods, which makes a plant-based chicken substitute, and Longève, a maker of pea protein crumbles and other plant products.
Seed Investment Theme #4: Property And Rentals Management
Established software platforms for managing and renting properties abound, as a Google search on the subject will demonstrate. Yet we don’t see one or two household name companies commandeering major market share in the space, akin to a Zillow in real estate or Intuit for taxes.
For now, it appears seed-stage investors see room for new entrants with potential to scale. So far this year, over a dozen seed-stage companies offering platforms and tools to manage rentals and investment properties have raised rounds of $2 million or more. (See curated list.)
Funded startups include RentRedi, a provider of software for collecting rents and managing rental properties, Landis, a startup for people who want to transition from renting to owning a home, and Houm, a marketplace for landlords in Latin America to find tenants, collect rent and manage properties.
So, the future doesn’t care what we think about it. If another mini seed-funding trend favoring AI-enabled writing bots (see list) proves fruitful, in the future there will actually be a bot that does most of this job. It may even learn sarcasm.
That said, my takeaway here is that most of the startup-driven futuristic trends highlighted above seem like favorable directions. Automating hazardous or boring routine tasks through robotics should theoretically provide more time for us to pursue more productive or pleasant activities. Plant-based proteins don’t harm animals and allow us to have tasty satiating meals with a smaller carbon footprint. And real estate management could use some techie upgrades.
The trend I’m less gung-ho about is app-based mental health. In particular, I wonder about the efficacy of turning to an app to heal oneself of the sense of isolation and existential angst stemming from a life lived increasingly via screens and apps. It would be kind of like having a stiff drink to get sober. Or eating a cheesecake to lose weight.
Now, don’t get me wrong. I would love to lose weight by eating a cheesecake and would certainly write a check for a startup that offers that. It’s just when something seems too good to be true, it often is.
Seed funding sample investment lists
Illustration: Dom Guzman
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