As journalists, it’s not often that we get to see firsthand what goes on behind the scenes of the industry we cover.
The funding comes during one of the most difficult times for late-stage startups to raise capital in years. As we’ve reported extensively, 2022 venture funding is down markedly—albeit from last year’s record highs—and the slowdown only accelerated in the second quarter.
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Many startups are raising capital at deflated valuations and tech layoffs have sped up as the year wears on. With the IPO markets effectively stalled, late-stage startups have had a particularly tough time: Q2 funding to those companies fell 31% quarter over quarter and 38% year over year.
Crunchbase’s funding underscores a few big themes we’ve seen in our news reporting this year.
Steady as it goes: It’s been almost three years since Crunchbase raised its Series C funding. In that time, the company steadily built a solid prospecting software business that’s on track to double ARR this year, putting it on the path to profitability. The company’s cash burn is also low and we continue to hire at a healthy clip (including a couple of recent hires on my team—see below).
That’s in contrast to the many startups we saw last year that took all the capital investors would throw at them, sometimes raising large, back-to-back rounds in a matter of months. Quite a few of those companies have since issued layoffs or, in some cases, completely imploded despite raising huge sums from venture investors.
Cash is king again: With the sharp turn in the venture market this year, the growth-at-all-costs approach has fallen out of favor with investors, who now want to see startups be mindful of cash spend and maintain several years of runway ahead of them.
What’s a valuation worth, anyway? Notably, Crunchbase isn’t revealing its valuation with this latest round. But it’s worth saying that generally—and especially in the current fundraising environment—valuations really only matter once they’re actually validated in the market. We’ve seen that as pre-IPO companies including Klarna and Instacart face steep valuation cuts. At the end of the day, the only valuation that really means anything to a startup’s investors and employees is the one that’s pegged to an exit.
More news about news …
The Series D announcement isn’t the only exciting news around here. We’ve recently added two new journalists to the Crunchbase News team to expand our coverage further:
- Christine Kilpatrick joined us as Special Projects Editor, a newly created role in which she manages Crunchbase News’ growing editorial calendar of larger projects and initiatives. These include our monthly and quarterly venture funding reports and our suite of landing pages, which houses The Crunchbase Unicorn Board. Christine is a very seasoned editor who previously spent time at the San Francisco Business Times (where I was lucky enough to work with her), The Information and the Engineering News-Record. With Christine at the helm, look for us to roll out more focused coverage this year on a variety of big topics. You can reach her at firstname.lastname@example.org.
- Keerthi Vedantam recently joined our reporting team to lead our coverage of health and biotech startups and venture funding. She will also cover VC-backed companies in the wellness, foodtech and agtech sectors. Keerthi joins us from dot.LA, a publication covering Los Angeles’ tech scene. There, she quickly carved out a beat covering the region’s biotech sector in-depth. Before that, she reported on enterprise tech at Business Insider. Keerthi has already hit the ground running, and I can’t wait to see what she accomplishes here. Reach her at email@example.com with tips and ideas and follow her on Twitter at @KeerthiVedantam.
With our growing team and a steady, well-funded business behind us, expect to see Crunchbase News’ coverage continue to expand this year. As always, feel free to reach out to us with feedback, news tips and story ideas.
Marlize van Romburgh is Crunchbase News’ editor in chief.
Illustration: Dom Guzman
A note on disclosure: Existing Crunchbase investors OMERS Ventures, Mayfield and Emergence Capital joined lead investor Alignment in this latest round of funding, which brings Crunchbase’s total raised to date to $106.5 million. As the list of companies who’ve invested in Crunchbase grows, I’d like to emphasize again: While Crunchbase News is part of Crunchbase, the newsroom maintains complete editorial independence from the rest of the company, and we grant all Crunchbase investors the same level of privilege as any other company we write about: None. You can read more about our team, and our policy on ethics and disclosures, here.↩
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