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Here’s One Un-Bearish Indicator: Series B Is Holding Up

Illustration of building a Series B

Amid a broad and often punishing bear market for tech, U.S. Series B dealmaking is holding up pretty well.

So far in 2022, investors have poured a bit over $24 billion into Series B deals, per Crunchbase data. That’s higher than the full-year total for three of the past five calendar years, as laid out in the chart below:

Even compared to last year, things don’t look so far down. With 2022 already nearly half over, we’re currently on pace to come in just slightly below last year’s record-setting annual tally of $56.7 billion.

Overall, it’s a pretty un-bearish indicator. That’s kind of surprising considering we’re in a business news environment dominated by headlines about record inflation, plummeting stocks and public investors’ recent distaste for unprofitable tech companies. It’s also particularly significant if, like us, you see Series B as a barometer for confidence levels across the startup ecosystem.

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What Series B says about the startup funding climate

The Series-B-as-barometer theory stems from the fact that it is the midway stage for startup funding. Companies raising at this point usually have proven technology or product and are on the cusp of more pronounced scaling. However, an exit is still likely years away, making factors like a shuttered IPO market or sluggish M&A environment less of a concern.

For now, it looks like venture investors are still comfortable backing big B-stage deals. At least 55 U.S. rounds of $100 million and up closed so far this year. We list the 12 biggest below:

The largest B round this year went to Anthropic, a San Francisco-based artificial intelligence research company that pulled in $580 million in April. The startup will use the funds, which elevated the company to unicorn status, in part for building infrastructure to “explore and improve the safety properties of computationally intensive AI models.”

Eikon Therapeutics, a Hayward, California-based company which develops technology to analyze single molecule protein behavior in living cells, is the second-biggest Series B recipient, securing $518 million in a January round. In third place is Velocity Global, a Denver-based provider of tools for hiring, managing and paying global workforces, which raised $400 million in a May financing.

Top sectors in Series B

No particular sector dominated among recipients of larger-sized Series B rounds. Focus areas range from AI to foodtech to precision medicine.

Biotech was one of the bigger areas for funding, with 71 companies collectively landing over $4.6 billion. Security was also popular, with 31 companies pulling in over $1.65 billion in Series B capital.

We also took a closer look at cryptocurrency and NFTs—two high-buzz areas that are encountering bearish sentiment recently—to see to what extent those spaces are dominating fundraising. A total of 13 companies tagged as having ties to the crypto sector raised B rounds this year, pulling in an aggregate $694 million.

Meanwhile, just three companies that described themselves as NFT-focused raised B rounds. However, all were $100 million-plus rounds, adding up to just over $400 million.

Where do we go from here?

At this point in the cycle, most of us are willing to consider 2021 an anomaly. A year everyone spent too much and set valuations higher than they should have. For 2022, the question is whether a pullback from peak levels represents a return to normalcy or a deeper downturn.

Looking at public tech valuations, crypto prices and other indicators, it sure looks like we’re in deep correction mode. Series B, however, seems to be telling us that long-term investors remain relatively confident.


Illustration: Dom Guzman


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