Startups Venture Web3

New Low: Monthly Funding Dips Below $20B As Funds Continue Record Raises

Jan Calendar page being torn off to make way for Feb. [Dom Guman]

Global monthly funding fell to $18 billion in February 2023. Not since February 2020 has global funding dipped below $20 billion in a single month.

Funding for the past month was down 63% from $48.8 billion a year earlier. And month-over-month funding was down 43%. January funding was up in large part due to a $10 billion round raised by OpenAI.

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Late-stage funding fell the most, by 73%, while early-stage funding was down 52% year over year, based on an analysis of Crunchbase data.

This drop in late-stage funding takes place in a climate in which venture funds are closing on billion-dollar funds. This past month, San Francisco-based Bain Capital closed on $1.9 billion in funds, its largest to date. And data-driven investor SignalFire, also based in San Francisco, raised $900 million across its seed, breakout and opportunity funds, larger than prior funds.

A reckoning

More than a year after tech stocks plunged, have we hit the market bottom yet?

In a recent interview with TechCrunch, Social Capital founder and “SPAC king” Chamath Palihapitiya said his firm has cut back on late-stage funding due to lack of opportunity. He assesses it will take three years to price late-stage fundings accurately as investors resist downgrades in portfolio valuations.

Money deployed at Series B, Series C and Series D in the past two years will struggle to raise follow-on funding. In this funding environment, we have reported on an increase in round extensions as companies struggle to raise the next funding at an increased valuation.

Pay to play will become more common. Sequoia Capital stepped away from backing Citizen in a new round of funding that would dilute existing investors by a ratio of 10 to 1, reported the Financial Times. Sequoia was a large backer of Citizen and led its Series A. Sequoia partner Mike Vernal resigned from Citizen’s board earlier this month.

Elad Gil, an investor and co-founder of Color, said in a recent post analyzing the downturn, “many companies are likely about to meet a hard reckoning.”

He went on to say that he believed this reckoning would likely start toward the end of 2023 and accelerate through the end of 2024 or so.

However, in our most recent unicorn report, a few late-stage companies did raise at increased valuations from their 2021 funding.


Funding rounds included in this report are seed, angel, venture, corporate-venture and private-equity rounds in venture-backed companies. This reflects data in Crunchbase as of  March 6, 2023.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

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