After Slowing In 2023, US Median Round Size Again Growing

For a decade, U.S. seed and early-stage round sizes consistently saw an increase until early 2023 when typical round sizes began to come down and the venture market was three quarters into a funding slowdown.

The first half of this year, however, has reversed that trend as the median round size for funding at seed through Series C has picked up again, an analysis of Crunchbase data shows.

That median increase was most pronounced for seed and Series A — rising above 2021 and 2022 amounts. For H1 2024, median round sizes could come down as more fundings are added late — especially for seed — but median amounts look likely to be above 2023 amounts.

While Series B and C were below peak 2021 median amounts, they were up from 2023.

Larger concentrated bets

Early-stage funding has noticeably picked up so far in 2024. Based on an analysis of Crunchbase data, much of that increase was in larger fundings.

Funding grew year over year from 2016 to the record-setting year of 2021. Over those years median round sizes also grew. And when funding came down, median rounds did not initially come down. When they did trend down in 2023, they were still north of 2020 median values.

Consistent with the increase in funding in 2021, the biggest leap in median rounds was that same year across seed through Series B. Series C saw the largest jump in 2020, after a pullback in 2019.

Let’s look deeper into each stage as well as the lower and top quartile to see how the U.S. funding environment changed in the growth years and in the subsequent slow down.

Seed

Seed, when compared to subsequent funding types, shows the largest growth variance at each quartile, an indication of seed sometimes representing different funding stages through a longer timeframe.

The median upper quartile was $3 million and higher since 2021.

“It’s as competitive as ever,” said Maria Palma, a general partner at San Francisco-based Freestyle Capital via email. “‘Pre-seed/seed’ valuations are still high, especially in AI, and many founders want to raise enough money to weather some potential ups and downs in the market as they look to achieve their next milestones.”

Median Series A

The median Series A was $12 million or more and the upper quartile was $20 million or more since 2021.

“We have seen the time between Seed and Series A rounds extend — leading to more mature and better assets looking for Series A funding,” said Renata Quintini, a co-founder of San Francisco-based Renegade Partners via email. “With higher post-money valuations in the seed round combined with better, more mature assets making it to Series A rounds, we may see a trend of higher prices in Series A within the next 6-18 months.”

Median Series B and C off peak

Series B and C median rounds are down from the peak — with Series B less dramatically so.

The median Series B has been $27 million or more since 2021 and the upper quartile is $50 million or above since 2021.

“We’ve definitely seen an uptick in the number of companies raising and the number of deals done across Series A and B rounds in the first half of this year,” said Ariel Tseitlin a general partner at Bay Area-based Scale Venture Partners via email.

The median Series C in H1 2024 was down from the peak but still above the 2020 median.

2024 shifts to AI

Median rounds are up between 11% and 30% across seed through Series C fundings in H1 2024 with one driving factor being AI.

“Valuations are slowly starting to creep up across the board. Certain sectors, like AI and security, are seeing disproportionately high valuation inflation,” said Tseitlin. “For the rest, there’s a flight to quality — companies with high growth and strong efficiency are getting bid up to a level not quite but approaching what we saw in 2020 and 2021.”

For many investors, the increase in valuation and round size in H1 2024 was attributed to the impact of AI. Based on an analysis of Crunchbase data, funding to AI companies doubled in Q2 2024.

“The biggest reason for every trend in VC funding is the impact of capital raised by AI companies,” said Quintini. “Valuations for AI companies are 1.6x and average round size is 1.4x compared to non-AI companies.”

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of August 2024.

Deal counts for this analysis of U.S. funding from 2015 though the first half of 2024 are:

Pre-seed and seed: over 74,500 fundings
Series A: over 16,500 fundings
Series B: over 8,000 deal counts
For Series C: over 3,500 deal counts

Note that data lags are most pronounced at the earliest stages of venture activity.

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.