Seed-stage startups are historically expensive right now.
In hardware, in fintech, in biotech, in healthtech, in SaaS — the median valuation of seed stage companies was higher in H1 2025 than H1 2022 (the prior peak).
One sector did buck the trend, sorry consumer founders.
So...what's happening?
1. Valuations did see some real declines in 2023 and early 2024 as the venture market swooned when interest rates rose (although the hits were lighter in seed than anywhere else).
2. The rise of pre-seed capital means many companies are more mature when hitting the seed market.
3. The rise of AI has pushed metrics (at least traction for say B2B software) up considerably. Think 2-3x vs the expected numbers in 2021.
4. Mega funds now play consistently at seed, taking large stakes in the most legible companies. Why take 50% of a seed round as a massive venture fund when you can have sharp elbows and take 85%+?
5. Seed rounds themselves have gotten larger - look no further than the Thinking Machines $𝟮 𝗯𝗶𝗹𝗹𝗶𝗼𝗻 𝘀𝗲𝗲𝗱 𝗿𝗼𝘂𝗻𝗱 closed in recent months.
Is this a "good" dynamic if you're a founder? Sure, if you're in the consensus "best-bets" category.
But by and large, no I don't think it is. These economics mean fewer seed rounds are actually getting closed, meaning many companies are left on the sidelines.
Of course with AI maybe zero funding is the right amount and you can stick it to those investors who overlooked you as you build with revenue only. When it works, it really works.
Does this picture look different outside the Bay Area? Yes, but the trend remains the same.
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#startups #valuations #seed #seedstage
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