We all left wild overvaluations in 2021 where they belong...right?
Maybe not.
There's a strange dichotomy happening right now in startups, exemplified by the Series A data we pulled below. On the one hand, fundraising difficulty has shot upwards in recent quarters, limiting the total number of rounds raised.
On the other hand, we are inundated with headlines of (mostly AI) companies raising at truly boom-times valuations.
I think the graphic does a great job of illustrating our current confusing moment.
In H1 2019, the 50th percentile for pre-money valuations was $26M (Series A SaaS companies only, primary rounds). The 95th pct at that time was $96M.
Now that's a pretty large gap. We're talking a 3.7x jump from the middle to the top end.
But today things are even more skewed.
𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 𝗦𝗮𝗮𝘀 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀 𝗶𝗻 𝗛𝟭 𝟮𝟬𝟮𝟰
50th pct: $44M
95th pct: $203M
Gap: ~4.6x
That 4.6x gap is the largest of the past 5 years and likely the past 10, though I don't have full data to prove it.
Now perhaps the 95th percentile Series A company today is vastly different from their counterpart in 2021 or 2022. Maybe they have a much firmer financial foundation. Perhaps they're even peeking around a corner at profitability. Certainly they're likely to have AI in their name or domain.
But I can't help but feel like we might have exchanged one bubble for another.
Here's hoping the Series A outliers of today fare better!
#cartadata #SeriesA #valuations #fundraising #startups #founders
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