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For $100M-Plus Rounds, It’s Unclear What’s Normal

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Venture funding rounds of $100 million or more were once a rarity. But as startup investment hit record levels a couple years ago, megarounds became an everyday occurrence.

Now, with funding contracting, such deals are again getting rarer.

So far this year, just 97 U.S.-based companies 1 have landed a round of $100 million or more at Series A through Series D, per Crunchbase data. Over the prior two years, meanwhile, more than 800 such rounds closed.

As charted below, 2023 is on track to be the most sluggish in years for both the number of megarounds and the total invested in such financings.

Globally, a similar phenomenon is playing out. Fewer than 200 companies have announced Series A through D rounds of $100 million or more this year. As you can see below, the average size of these rounds has also been shrinking.

Who is getting the big rounds

A majority of the largest U.S. funding recipients are in the sustainability, AI or health care categories (or some combination of those). To illustrate, we put together a list of 12 of the biggest rounds below.

For a broader list that’s not limited to certain stages, check out The Crunchbase Megadeals Board.

Why Series A through D?

We limited our dataset to Series A through D because these are the stages of what I consider the classic venture capital strategy. Companies have a defined business model, some technology breakthrough or market traction, and a realistic path to exit.

No one is putting in money just because they like the team or idea here. Nor are these corporate rounds driven by strategic goals beyond financial returns. To get in at Series A through D, investors typically see a real chance to fund a promising company as it grows revenue and valuation.

Apparently, investors saw a lot more opportunities warranting $100 million-plus rounds in 2021. Now that we’ve seen steep valuation cuts for many onetime unicorns, in retrospect it appears they overdid it.

What should normal look like for megarounds?

Now that investors have pulled back, it looks like the more pertinent question this year may be: Have they cut back too much?

In a perfectly rational world, one might imagine that the number of companies suited for a $100 million-plus round would be reasonably stable from year to year. After all, the startups getting rejected by VCs in 2023 aren’t that different from the cohort that raised vast sums in 2021. Oftentimes they’re the same companies.

But stability isn’t something we’ve come to expect in the startup world.

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Illustration: Dom Guzman

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  1. As of Sept. 6, 2023.

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