Venture investors continued to scale back in April 2023.
Global funding reached $21 billion, down 56% from $47.8 billion in a year-over-year comparison. This is the second-lowest amount recorded in a single month since July 2022 when venture capital started to scale below $30 billion.
The slowdown has impacted all funding stages. Seed was down more than 50% year over year, while early-stage funding dropped 48%. Late-stage funding was down the most at 62%.
Month-over-month funding amounts were also down, in large part due to an increase in late-stage funding in March 2023 with Stripe‘s $6.5 billion funding.
Health care leads
Health care was the sector that raised the largest amounts with close to $5.7 billion invested. Companies that raised large rounds at the early stages include RNA-based medicine provider Orbital Therapeutics, medical robotics company Noah Medical and drugs from plants developer Enveda Biosciences.
Companies active in AI raised around $2.8 billion, close to 13% of funding this past month. They include OpenAI, which raised a further $300 million. CoreWeave raised $221 million, Pinecone and AlphaSense each raised $100 million, and Replit raised $97 million.
Financial services companies raised just over $2.7 billion, down from $7.7 billion raised in the same month a year ago. Companies that raised large rounds at Series A and B include capital markets infrastructure provider Clear Street, mobile payments TerraPay and LatAm B2B expense tracking Clara.
Funding to unicorns tails off
Meanwhile, new unicorns total in the single digits, compared to 40 new unicorns in April 2022.
Of the $21 billion raised this past month, $4.4 billion was invested in unicorn companies. This is a smaller percentage than previous months in 2023, when unicorns averaged a third of all funding.
Unicorn fundings include BYJU’S, a leading edtech company in India that raised $700 million at a flat valuation of $22 billion led by sovereign wealth funds and private equity firms. The company laid off 2,500 employees.
And medical supply drone delivery company Zipline raised $330 million at an increased valuation of $4.8 billion, according to Forbes, up from its 2021 funding which valued the company at $2.8 billion.
Since the latter half of 2022, deal sizes have come down from seed through Series C fundings. The interest in AI is driving larger funding rounds, but not enough to lift the funding slowdown.
The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of May 2, 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/year.
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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