Are US startup valuations too "frothy" right now?
Perhaps.
Data below looks at median valuations for software companies in the US using Carta. Tracked nearly 10,000 rounds since Q4 2021.
We filtered it to software companies only but this definitely includes many AI businesses which push up the medians.
𝗗𝗮𝘁𝗮 𝗮𝗻𝗱 𝗧𝗵𝗼𝘂𝗴𝗵𝘁𝘀
Median seed-stage valuations are 32% higher than the peak of Q4 2021. That's pretty wild!
However, fewer rounds are actually happening. So more "competition" for the best companies it seems.
This data does NOT adjust for inflation, which would take a little of the heat off of the top-line figures.
Outside of seed stage, valuations are below peak. Just by a little for Series A, still by quite a lot for later stages.
Tale of two cities, perhaps: some AI companies are raising in what feels like a cash-flowing environment (thought not all AI companies) and many others are struggling to get good conversations.
So when you read a VC remarking that deal valuations make little sense right now, they may have just gotten off a call with your next favorite AI app.
But I'm sure that frothy feeling doesn't extend to all founders and funders at the moment.
#startups #valuations #Seed #SeriesA #VC
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