Is it time to build in atoms, not bits?
For the first time from us at Carta - benchmarks on US deep tech startup fundraising. Valuations, cash raised, and dilution from pre-seed through Series C.
Deep tech covers many sectors including: renewable energy, hardware, medical devices, pharma, biotech, space, telecom, semiconductors.
Two things stand out to me.
1) Deep tech rounds are more dilutive to founders than rounds raised by software companies. Median seed dilution is 23% for deep tech and 19% for software, for instance.
2) Deep tech companies do NOT always need vastly more capital than their software peers. If you add up the median cash raised between Seed and Series C for each group, you get:
Software: $75.3 million raised Deep tech: $81.9 million raised
So the extra dilution is due to lower valuations. Is that down to technical risk (deep tech companies generally don't produce revenue that quickly)? Is it down to a smaller investor pool? Lots to dig into.
Data Explanations
Rounds completed on SAFEs in the orange color tiers are split by total amount raised, since everyone has a slightly different definition of “pre-seed” and “seed on SAFEs”.
Rounds on priced equity in the blue color tiers split by round names. Just primary rounds, no bridges or extensions or “Series A Jr” stuff going on.
While the total number of rounds for deep tech is considerably lower than for software companies, deep tech has held up well in recent quarters. Seems like investors are slightly more open to deep tech hypotheses than they were previously.
Share with a fundraising (deep tech) founder 🙏
#startups #founders #deeptech #fundraising
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