So far this year, SaaS and enterprise software companies have raised $4.7 billion in seed- through growth-stage financing, per Crunchbase data. That puts 2024 on track to come in far below last year’s $17.4 billion annual tally — which was itself the lowest total in years.

For perspective, we charted out funding and deal counts from 2019 through 2024.

A tough week for enterprise software stocks

Startup funding declines come amid what is shaping up as a challenging period for publicly traded SaaS and enterprise software companies.

On Thursday, Salesforce 1 shares were down more than 20% after the company lowered guidance for the current quarter, citing cooling demand from customers who were taking more time to complete orders.

At the same time, shares of process automation software provider UiPath dropped by around 30% following a disappointing earnings report and downwardly revised quarterly forecast.

More broadly, it’s been a tough month for enterprise software. The Bessemer Cloud Index, which includes many of the most prominent public SaaS businesses, has sharply underperformed the Nasdaq and S&P 500 and is now in negative territory for 2024. The Bessemer index saw a particularly steep decline beginning in late May.

Some big startup rounds are still closing

Even amid a tougher fundraising environment, we are still seeing some large financings for SaaS and enterprise software this year.

The biggest by far is cloud security provider Wiz’s $1 billion Series E earlier this month, co-led by Andreessen Horowitz, Lightspeed Venture Partners and Thrive Capital. The round set a $12 billion valuation for the 4-year-old company, which was founded in Israel and is headquartered in New York.

Another large financing went to Silicon Valley-based Glean, which markets AI-powered work assistants to enterprise customers. The company raised $200 million in a February Series D.

In the food service market, meanwhile, Irvine, California-based Restaurant365 landed $175 million in an early May financing led by Iconiq Growth. The company sells software to restaurant operators for managing and optimizing finances and staffing.

Not like it used to be

While funding hasn’t evaporated, we’re seeing far fewer megadeals in SaaS and enterprise software than a few years ago.

Over the past 12 months, 21 deals of $100 million or more have closed, per Crunchbase data. By comparison, during the peak year for deal-making — 2021 — there were 147 such financings.

For 2024, year-over-year investment totals are also quite a bit lower due to a single large 2023 round: the $6.5 billion Series I for fintech unicorn Stripe. That’s the largest financing in the space ever, per Crunchbase data, and thus obviously a tough comp to match.

Going forward, we’ll be looking to public markets to see if earnings outlooks improve for SaaS heavyweights and if investors regain their enthusiasm for the space. In private markets, meanwhile, investment remains subdued, albeit with a steady flow of deals still getting done.

Related Crunchbase Pro query:

• US SaaS And Enterprise Software Startup Funding

Related reading:

• The State Of Saas: After A Positive Start To 2024, Founders Can Find Success In A Reset Market
• 3 Strategic Steps Toward SaaS Profitability 

Illustration: Li-Anne Dias

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But Gil Dibner, the general partner and founder of Angular Ventures, is going a different route as he hunts across 40 countries in Europe and Israel for his next deal: instead of focusing on specific geographies, he’s going “industry specific.”

Angular Ventures just closed its debut $41 million fund to invest in deep tech and enterprise companies. Dibner plans to cut seed and early-stage checks between $250,000 and $1.5 million.

The London, Tel Aviv, and New York-based firm is in a unique position that many geographic-focused funds around Europe are not. Instead of partnering with local governments, Angular stayed with commercial investors, allowing it to be “able to invest with no geographic targets or constraints.”

“We don’t exist to create jobs in this geography, we exist to bring great returns by LPs,” he said. Dibner has sourced deal flow from over 40 countries throughout his career.

Deep Tech Unpacked

In terms of an ideal founder, Dibner said it is “a founder [who] has already built…a very advanced technology focused on enterprise.” That assumes a certain level of progress from the startup before it seeks venture capital (which feels, in all honesty, rare these days).

And while he’s looking for deal flow outside the United States, Dibner admitted that the nation remains the single largest market for enterprise technology in the world. Plus, it has the most early adopters.

“The founders are typically thinking of moving to the U.S., selling into the U.S. remotely, and hiring into the U.S.,” he said.

To help his international founders make that transition, he put his head of platform in New York City for partnerships and has cultivated a close relationship with an immigration lawyer to help with the technicalities of the visa process.

Dibner said his professional experience (he has backed 40 companies to date throughout his career) mixed with his personal experience gives companies high value. He is the sole general partner of the fund.

“If being a founder is the loneliest thing a person can do, being a founder who is required to move thousands of miles across the ocean to a new country in order to succeed at the scale they know they can succeed, that’s an order of magnitude loneliner,” he said. “As an expat myself, I think it helps us be in a position to help our founders make that very difficult journey.”

Current investments include field service optimization company Aquant.io, HR workplace misconduct platform Vault, and nano-tech security technology provider DUST Identity.

Illustration: Li-Anne Dias