Startup fundraising activity in the U.S. remained stagnant in the first quarter of 2024 due to the ongoing venture capital slowdown. Quarterly deal value reached its lowest point since 2018, with venture capitalists being cautious about investing in the face of higher interest rates and inflation. The venture capital business cycle has been reset in recent years, and as of early 2024, it is still struggling to find a stable level, according to NVCA CEO Bobby Franklin.
In the Pacific Northwest, funding to tech startups fell by 30% in Q1 compared to the fourth quarter of 2023. However, it increased slightly year-over-year, totaling more than $433 million. The shifting fundraising environment has left many startups in a difficult position, as investor expectations and benchmarks have risen. This has made it challenging for companies to attract capital unless they demonstrate strong growth and profitability characteristics that VCs expect.
Despite the challenges in the fundraising landscape, some companies in the Pacific Northwest have managed to secure sizable funding rounds. Prominent among these is ProfoundBio, a Seattle-based biotech firm that raised $112 million to develop drugs for ovarian and endometrial cancers. EigenLayer, a blockchain startup led by former University of Washington professor Sreeram Kannan, raised $100 million from Andreessen Horowitz. Pandion, Oleria, Interlune, Betadapp, Recurrent, Avante, Symbiosys, and Digs are among the other startups that secured significant funding rounds.
In February, EigenLayer, the restaking company behind the EigenLayer project, raised $100 million from Andreessen Horowitz. Pandion, a Seattle e-commerce startup founded by former Amazon and Walmart executive Scott Ruffin, raised $41.5 million in March to expand its residential parcel delivery system. Oleria emerged from stealth mode last year with cybersecurity software and raised $33 million, led by CEO Jim Alkove. Interlune announced $18 million in funding for its plans to build a robotic harvester for extracting helium-3 from the moon. Betadapp, Recurrent, Avante, Symbiosys, and Digs also secured funding for their respective ventures.
While some startups have managed to secure significant funding, the overall fundraising activity in the U.S. has been slow in the first quarter of 2024. Higher interest rates and inflation have led venture capitalists to be cautious about investing in startups, resulting in the lowest quarterly deal value since 2018. Companies in the Pacific Northwest, such as ProfoundBio, EigenLayer, Pandion, Oleria, Interlune, Betadapp, Recurrent, Avante, Symbiosys, and Digs, have navigated the challenging fundraising environment by attracting sizable investment rounds to support their growth and development.
