While consumers in the U.S. latched on to early plant-based meat alternatives, enthralled with Impossible Foods’ vegan burger that released the same blood-like substance as meat, vegan seafood didn’t see the same rise in popularity. 

This was despite having relatively similar funding patterns. From 2014 to 2019, there was only a 20% difference in venture funding between the two categories, according to Crunchbase data. By 2020, investors began abandoning the plant-based seafood category. In 2021, while nearly every industry saw some growth, imitation seafood declined. 

But the tides are turning for sales of plant-based seafood. Between 2019 and 2022, the number of grocery offerings jumped from 19 to 33, and the category experienced a 53% growth in unit sales, according to the Good Food Institute. And after recent — and jarring — setbacks faced by the plant-based meat industry, seafood startups and the venture firms that fund them are charting a new course — one that means more funding is going to fewer startups.

“I think there’s a lot more enthusiasm for seafood because there haven’t been as many products on the market that have failed,” said Lisa Feria, CEO of food-focused venture firm Stray Dog Capital. “I think part of that, to be completely honest, is because there haven’t been any products on the market, period.” 

In 2022, only 12 startups in the plant-based seafood space saw total funding to the tune of $54 million. Current Foods, which makes plant-based tuna and salmon bites, raised $18 million in June. Finless Foods raised $34 million in March to make plant-based and cell-grown cuts of fish. 

Fighting an upstream battle

Plant-based meat’s reputation, meanwhile, seemingly has only gotten worse. After the initial novelty and sustainability conversation around Impossible Foods and Beyond Meat wore off, there were three facts left to deal with: Their products were 2x to 4x more expensive than meat, they arguably aren’t particularly nutritious or healthy, and they didn’t quite taste like the real deal.

That quickly turned previously interested flexitarians — consumers who eat meat and imitation meat — into a dwindling crowd. Sales of all plant-based meat products dropped 14% in 2022,and Beyond Meat, a first mover in this space, saw its stock price drop a staggering 77% as the company conducted two mass layoffs that affected around 20% of its workforce.

Early entrants into plant-based seafood had it worse — it’s not enough for these products to be inherently better for the environment or vegan, they actually have to taste good, be nutritious and relatively cheap. More flexitarians wanted to find replacements for red meat, while fish is already considered a fairly healthy food by many. That immediately put the onus on new products to be better than existing ones. 

At one time, investors were interested in finding a first-to-market plant-based seafood product that could quickly become a household name like Beyond. Now, they expect food to be cheaper, taste as good and be healthier than current seafood offerings.

As it turns out, it’s a lot easier to make plant-based seafood healthy. Aqua Cultured Foods, which received $5.5 million in seed funding in April, recently unveiled its products for a taste test at the Future Food-Tech conference in San Francisco. The startup served spicy tuna rolls, salmon crudo and shrimp dumplings. 

The visually convincing, fat streaked cuts of sashimi are made with fungi that undergoes a fermentation process and, arguably, is actually better for you than current seafood offerings. They can be eaten by people with shellfish, gluten or soy allergies, have fewer calories than real fish, and have added omega-3 benefits. And, the company says, it tastes like raw fish.

“Because of the fact that we are targeting flexitarians, we know we’re held to a stricter standard because these consumers are already eating traditional meat, traditional seafood so they know what it tastes like,” CEO Anne Palermo said. 

The restaurant endorsement

To win over new customers, many of the companies are turning to restaurants and colleges before reaching for the grocery shelves. 

“Investors are being much more selective. The due diligence process is more thorough and it’s taking significantly longer,” Palermo said. “Consistent cash flows and revenue streams coming from a B2B play is now much more interesting. Whereas before, keeping a branded product was more interesting.”

The Ish Food Company, known for its plant-based salmon burgers and deveined shrimp, began selling its products at restaurants and on college campuses before planning its retail launch.

“Most seafood is consumed away from home, primarily because American consumers struggle with preparing and cooking seafood,” said Christie Flemming, COO of Ish. “It can be a high-cost item.”

Indeed, around 65% of seafood consumption in the U.S. happens in restaurants, not the home. That gives plant-based seafood an advantage over plant-based meat — a foreign product prepared by skilled workers at a restaurant can make a product far more familiar to the  average consumer. 

“If you really nail a good food-service customer, you’re also building, in an ideal world, your brand,” Stray Dog’s Feria said. “And then when [customers] go to the store, they already have that brand [in mind]. You don’t have to wait for people to find you on the shelf.”

Illustration: Dom Guzman

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After Impossible Foods stunned the world with its Impossible Burger, the vegan burger that “bleeds,” in 2016, plant-based meat seemed like the natural next step in sustainable dietary consumerism — one that meat-eaters would happily flock to. Funding to plant-based meat startups between 2016 and 2019 saw a whopping ​​1,110% increase, and that percentage shot up during the pandemic.

Much of that success depended not on vegetarians and vegans, who only make up a small slice of the consumer market, but on omnivores and self-described “flexitarians,” who were looking to plant-based alternatives for the sake of their health and the environment.

But it looks like flexitarians’ attitudes are changing. Inflation, supply chain issues and dwindling customer satisfaction has brought startup investment into plant-based meat to a standstill. Funding went from almost $2 billion in 2021 to around $800 million in 2022, according to Crunchbase data. And these challenges are likely to continue in 2023 as startups work to find ways to deliver healthy plant-based meat products at a reasonable price.

While the outlook for plant-based meat is dismal, the far quieter cell-grown meat industry saw some good news in 2022. California-based Upside Foods got word from the Food and Drug Administration in November that its lab-grown chicken is safe to eat. 

For the first time in years, funding for plant-based and cultivated meat has nearly reached dollar parity. But investors aren’t putting all their eggs into a new basket. It’s clear that meat alternatives have not delivered on their promises to consumers.

“A lot of meat consumption is emotional,” said Lisa Feria, CEO of food venture firm Stray Dog Capital. “And a lot of the plant-based consumption and purchase is rational.”

An unforgiving market

In November, plant-based meat giant Beyond Meat shared some sobering news during its quarterly earnings call: The company posted net revenue of $82.5 million and losses of $101.7 million. The company said it would lower the amount of product it manufactured and revisit its marketing strategy to only certain consumers. 

It’s a sharp descent for a company that went public in 2019 to nearly double its share price. 

Other plant-based meat startups face the same reality, and new innovations in the sector will face more frostbite from the venture market than before. 

“In the past two or three years, a lot of plant-based food companies got funded that should not have gotten funded,” Feria said. “So part of what you’re seeing in the market is an adjustment to that. The products are repetitive and not really great.”

According to a 2021 Good Food Institute report, health is the primary driver for plant-based meat purchases. But it turns out these early movers in ultraprocessed plant-based meat weren’t, on the whole, that much healthier than the real thing. 

Nor were they any tastier, or cheaper. The cost of manufacturing these products has gone up 60% to 70%, and distribution costs have spiked as a result. Everything from plant-based cream cheese to plant-based eggs to plant-based meat have seen shelf prices soar. The GFI report found that more than 60% of consumers would eat more plant-based meat if it was cheaper or less processed.

All of this contributed to the sector’s economic decline in 2022. 

“There was a lot of initial purchase and interest in plant-based meat products, but not as much repeat purchase as was expected,” Matthew Walker, managing director of agriculture-focused firm S2G Ventures, said in an email. “You have a consumer that purchased a product at a premium price and may not have felt that the taste, mouthfeel, or nutrition sufficiently justified making that product a staple item on their grocery list.”

Tall order for 2023

Plant-based meat startups will face a difficult task this year: to create products that taste just as good as (if not better than) the incumbent, while also being healthier and cheaper. 

“The strategy we see as top of mind involves those solutions that make plant-based meats perform better for the consumer, have cleaner labels, and introduce nutritional benefits that go beyond the ‘halo effect’ that this recent wave of products enjoyed but seems to have declined,” Walker said.

Cultivated meat, which uses stem cells to grow proteins streaked with fat and tendons in petri dishes, has emerged as a possible alternative for those discerning flexitarians. But we won’t see them on the grocery shelves any time soon. 

The industry is still working out how to scale its products in expensive labs. Singapore became the first country to approve cultured meat for sale in 2020 with Eat Just’s lab-grown chicken. (The startup has raised $225 million since then.) And following the FDA’s “safe to eat” letter for a lab-grown chicken startup, the U.S. is on its way to seeing cultivated meat reach small-scale distribution levels, like how Impossible Foods opened in a few select restaurants. 

But investors are hesitant to promise too much too fast. Studies show that consumers will be far less forgiving of cultivated meat than they were of plant-based meat. 

“[For plant-based meat], I’m going to give some space for that because I want a trade off, which is nutrition and health,” Feria said. “When it comes to [cultivated] meat, because you’re trying to deliver the same product you have to deliver the same experience or better.”

Illustration: Dom Guzman

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Will 2023 be the comeback year for IPOs? What will it take for the public market to thaw? Here are the Crunchbase News staff’s top picks for the companies we think could go public next year. 

And if some of these sound familiar, it’s because they are: In our 2022 edition of this list, we predicted many of these might go public this year. Little did we know that the IPO markets would stall. So here we are again, offering up some thoughts on who might make public debuts, if and when IPOs start happening again.

Enterprise tech and cybersecurity

Arctic Wolf: It wasn’t that long ago when Eden Prairie, Minnesota-based Arctic Wolf seemed IPO bound. The company raised $150 million in a Series F in July 2021, taking its valuation from $1.3 billion to $4.3 billion. At that time, then-CEO Brian NeSmith said an IPO was likely the next logical move. Then the market changed drastically, and in October the managed security provider raised $401 million in convertible notes led by existing investor Owl Rock. Convertible notes work like a short-term loan, but these notes are repaid to the investor at a later point in equity — i.e. after an IPO — typically at a discount. The managed security space can support large players and Arctic Wolf has grown large since being founded in 2012. Perhaps those notes turn to equity in 2023.

Databricks: Everyone has been on Databricks for a while. As recently as February, CEO Ali Ghodsi talked about going public, but offered no timeline. The market has only grown colder for IPOs since then, but this is a company that ended 2021 with more than $800 million in annual recurring revenue. It’s big and growing. It also hit a post-money valuation of $38 billion after raising a $1.6 billion Series H led by Morgan Stanley’s Counterpoint Global in August 2021. And that big Series H came just seven months after the company raised $1 billion at a $28 billion valuation. That valuation may be what is keeping the San Francisco-based company from going public. Nevertheless, Databricks — which creates tools and products to help companies view both structured and unstructured data in a single location — could look to 2023 to finally offer employees and investors the liquidity they’ve waited for.

Flexport: The supply chain is still top of mind, so maybe some company will ride that to the public market. San Francisco-based Flexport, which was on our IPO list last year, locked up a $935 million Series E in February led by Andreessen Horowitz and MSD Partners at an $8 billion valuation. The global freight forwarder and logistics platform moved nearly $19 billion in merchandise across 112 countries in 2021, even as global supply chains suffered from multiple disruptions. In total, the startup has already raised more than $2 billion, according to Crunchbase data. Despite a down VC market this year, logistic and supply chain startups still were able to raise cash from private investors. Maybe they can do the same with public ones?

— Chris Metinko

Fintech and banking

Stripe: The most obvious and one of the most successful fintech startups to add to this list is online payments company Stripe, which is co-headquartered in London and Dublin. It is the fifth most valued startup on the The Crunchbase Unicorn Board, and was most recently valued in a 2021 financing at $95 billion. Founded by brothers Patrick Collison, its CEO, and John Collison, its president, Stripe is now 12 years old and has raised more than $2 billion in funding. The company processed $640 billion in payments in 2021 up 60% from the prior year. It was said to have $12 billion in revenue in 2021 according to Forbes. As a result of the market correction, the company lowered its internal valuation in 2022 to $74 billion. The company filed its intention to go public in July 2021 but has not yet set a date. It cut around 1,100 jobs, or 14% of its workforce, earlier this year.

Revolut: London-based Revolut is the second most valuable European fintech, valued at $33 billion as of July 2021. The company is 7 years old and has raised $1.7 billion in funding. Founded by Nikolay Storonsky and Vlad Yatsenko, Revolut took off as it made transferring money in different currencies easy for those who work or travel in multiple countries. Revolut has not initiated layoffs in 2022 — in fact, it has kept hiring. The company announced revenueof 261 million pounds in 2020 but has not posted revenue for 2021. Revolut has 25 million retail customers and applied for a banking license in the U.K. in 2021. 

Plaid: San Francisco-based Plaid connects user bank accounts to fintech apps. The company was founded nine years ago by Zachary Perret, its CEO, and William Hockey, a board member. It was last valued in Series D funding in August 2021 at $13.4 billion and has raised $734 million over time. Plaid’s revenue in 2020 was said to be around $170 million in an article by Forbes. Visa planned to purchase the company in 2020 for $5 billion, which was halted by regulators the following year. In December 2022, Plaid laid off 20% of its staff, or around 260 employees, as Peret said that slower than expected growth after the pandemic meant that Plaid’s “pace of cost growth outstripped our pace of revenue growth.” On the other hand, Peret also said that the number of customers Plaid serves has grown 50% in the past year. 

— Gené Teare

Consumer platforms and services

Instacart: Instacart is kind of the startup equivalent of the “always a bridesmaid never a bride” cliche. It’s always high on lists of likely public market entrants, but has never actually consummated an IPO. Well, we think 2023 will be the year. (Yes, we said that last year too, but cut us some slack.) An offering started looking even more likely after the company confirmed in May that it filed a confidential draft registration with U.S. securities regulators, with a debut currently expected to come next year. The filing followed a steep write-down, as Instacart cut its valuation in March from $39 billion to $24 billion.

Guild Education: Denver-based Guild was also on our list last year, but all told, it still looks like a strong IPO candidate. The Denver-based company, which offers a platform for extending employer-covered education and upskilling to workers, has raised over $640 million to date, including $265 million in a June Series F round. It’s particularly noteworthy that the company secured a big round in a period in which overall edtech funding has been declining, indicating investors see a lot to like in the business model.

Faire: If you’ve been around long enough and raised enough money, inevitably investors will be looking for a return. This notion applies quite succinctly to Faire, an online marketplace for independent retailers and brands that has raised $1.7 billion since 2017, per Crunchbase data. The company’s business model could also see some favorable headwinds as consumers return to local stores, which stock from its suppliers, after a pandemic-driven shift to predominantly online shopping.

TripActions: TripActions is another heavily funded company that’s often bandied about as a likely IPO candidate. The 7-year-old, Palo Alto-headquartered company provides corporate cards and expense management tools, with a focus on business travel. Startup investors certainly seem to like the brand. The company pulled in $300 million in an October Series G round at a post-money valuation of $9.2 million. TripActions also is already making progress on the IPO path — it filed confidential paperwork for an offering with the SEC, per a September report.

— Joanna Glasner

Life sciences, agtech and foodtech

Lyra Health: We’re still waiting for Lyra — or maybe Headspace Health or some other teletherapy company — to go public. A first-mover teletherapy startup that took the direct-to-employer route in 2016, Lyra Health has worked with companies including Palantir, Zoom and Amgen to provide teletherapy long before insurance companies at-large embraced the practice. At the beginning of this year the startup raised $235 million in Series G funding, upping its valuation to $5.58 billion. Lyra held back during the 2021 IPO mad rush its competitor Talkspace participated in, but it’s more than ready for the public markets.

Plenty: We consider vertical farming and urban farming a solid bet next year. Thin-margin grocery stores are being hit hard by logistics and supply issues, so the idea of a produce farm located close to consumers seems pretty ideal. Vertical farming startup Plenty rang in 2022 with $400 million in Series E funding, almost half of all the funding the company has raised since it got started in 2014. Plenty began building out a vertical farming “campus” in Virginia, where it would grow strawberries for the large farming conglomerate Driscoll’s. There aren’t that many agriculture startups that went public — AeroFarms almost made the leap via SPAC in 2021 until funding closed up — but Plenty seems ripe to go public.

Tempus: Armed with $1.3 billion in funding over nine funding rounds, precision medicine startup Tempus is easily one of the most intriguing companies to come out of the pandemic. Its technology platform is different from most biotech upstarts that focus on developing molecules. Tempus scooped up two clinical trial-related startups and has its hand in multiple parts of the drug-making lifespan — something we don’t see outside of giant pharma companies such as Amgen or Merck. Tempus raised $275 million in debt financing in October for its ability to leverage AI in drug discovery and genomic sequencing. 

— Keerthi Vedantam

Outside the box

Canva: Design-software maker Canva has reeled in more than $572 million in funding and a $40 billion valuation from venture investors. The Australia-based company is known for its design software for nondesigners, but new tools rolled out this year show its ambitions are even bigger. It recently launched an AI writing tool that promises to help automate marketing copywriting, around the same time that OpenAI’s ChatGPT tool set the tech world abuzz. Investors seem to be increasingly drawn to technology that automates even the most creative of fields, and Canva is at the head of the pack in that group. At least one of Canva’s biggest investors is feeling more bullish on the company again: Franklin Templeton increased the value of its stake in Canva last month, after the design softwaremaker was previously hit by a series of writedowns.

ICON: We thought it’d be fun to include a name that doesn’t generally grace the likely IPO lists, and that’s where ICON comes in. The Austin-based construction technology company, known for its iconic 3D-printed homes, has raised more than $450 million in venture funding in the past five years. It’s the kind of branded, consumer-facing technology company that might benefit from the higher public profile that comes with a listing on a major exchange.

 — Marlize van Romburgh and Joanna Glasner

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Every month we take a look at a handful of rounds that maybe weren’t the biggest or spotlighted the most, but caught our attention for being a little different or unique.

We’ve covered everything from Katy Perry’s boozeless cocktails to bread robots.

Now that the end of the year is fast approaching, let’s cull the list down even a little further and look at the five most interesting rounds of the year — at least in our eyes.

Pleistocene Park

Colossal Biosciences: The Dallas-based company closed a $60 million Series A led by Thomas Tull and At One Ventures in March. What caught our eye is that this isn’t just a normal bioscience firm battling disease — it’s trying to solve de-extinction. Yes, like resurrection biology. (Which Hollywood has shown always turns out poorly, i.e., the whole Jurassic Park franchise.)

The company, which launched in 2021, is using genome engineering technologies to find a practical working model of de-extinction that will focus on the goal of the “restoration and rewilding of functional woolly mammoths to the tundra.” Colossal said bringing back mammoths would allow for a better understanding of evolutionary change in other species, and that genetic engineering applications also will help enhance food production and reduce environmental impact.

The other thing that piqued our interest about this were the investors: Thomas Tull of Legendary Entertainment (speaking of movies) and investment firm Tulco fame; gaming company Animoca Brands; Paris Hilton; and several other names from a variety of areas. A pretty eclectic bunch — but then again, maybe that fits in with the mission.

Mining space

AstroForge: Asteroids are known to hold valuable minerals like platinum and gold. The only problem is they’re in space — obviously — so mining them can be an issue.

This is where Huntington Beach, California-based AstroForge comes in. The company locked up a $13 million seed round led by Initialized Capital in May to make such mining a reality.

The company has not shared much of its technology publicly, other than to say it enables in-space material refinement and that it has procured a rideshare launch on a SpaceX Falcon 9 vehicle. AstroForge also said it’s already looking at potential mining targets as it prepares for a demonstration flight as early as January 2023.

While asteroid mining has been attempted before, the space economy as a whole really seems to be taking off, and space mining will get you on the list any day.

Fair’s fair

FairPlay: Doing what is fair sounds simple, but society has proven through history it’s difficult for many. Now just like most things, we can have it “as-a-service.”

Los Angeles-based FairPlay is a “fairness-as-a-service” provider solution for algorithmic decision making. The startup landed a $10 million Series A led by Nyca Partners in July.

The company uses AI to help reduce algorithmic bias for people of color, women and other historically disadvantaged groups. The company already has launched two APIs that analyze loan applications and lending.

FairPlay will use the new proceeds to move its services into the insurance coverage, advertising and fraud industries.

Chicken is the new pizza

ZeroCarb LYFE: We’ve had cheese in crust, pepperoni in crust, cauliflower crust, cornmeal crust and any combination of all of those and more.

What is seemingly a little new is chicken as crust. But that’s what ZeroCarb LYFE does and what attracted a $1.5 million seed round from investors in June.

The Evansville, Indiana-based company produces what it calls “guilt-free innovation for pizza lovers looking for a delicious grain-free, high-protein option.” It creates a pizza crust made of only olive oil, spices, salt and, of course, chicken breast meat.

The crust reportedly has 37 grams of protein and zero carbohydrates — hence the company’s name.

ZeroCarb LYFE clearly sees a large and growing market, as it announced as part of closing the seed round it will soon begin a seed-plus round of funding to keep up with the pace of its expansion. The company’s crusts are already available for purchase in more than 150 restaurants and select supermarkets.

Accent bias

Sanas: Startups are always looking for ways to improve conversation and communication, be it through data, artificial intelligence or machine learning.

Speech AI firm Sanas is one of the latest, but it’s taking a unique twist. The Palo Alto, California-based startup has developed real-time accent “translation” software, where the user chooses the accent they want to use.

While Sanas says users have said there are a variety of reasons they may want to manipulate their accent — including it allowing them better fluency in a foreign language — the unfortunate issue of accent bias is also one of the driving forces.

The company announced a $32 million Series A in June, which it said was the largest Series A for any speech technology company. The round was led by Insight Partners with participation from other investors such as GV and General Catalyst.

Sanas says their software “allows for deeper personal choice” when it comes to people’s voices and addresses communication challenges between global teams and customers. In announcing the round, the company also said Alorica — a large business process outsourcing firm — has signed a strategic partnership with Sanas to use its tech with its 100,000 employees.

Illustration: Dom Guzman

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Winc was founded in 2012 as Club W. The company, which sends customers customized wine shipments based on their tastes, raised a total of $54.2 million from venture investors including Bessemer Venture Partners, Shining Capital and Crosscut Ventures, according to Crunchbase data. 

It raised another $22 million in its November 2021 IPO amid a spike on online alcohol sales during the pandemic. Its market capitalization has hovered around $3.6 million lately — a fraction of its most recent private valuation of $112.3 million in late 2019.

Winc filed for Chapter 11 bankruptcy protection — which allows a company to keep operating as it reorganizes — listing $50.3 million in assets and $36.8 million in liabilities. The company generated $72.1 million in revenue last year, but never turned a profit.

Its largest unsecured creditor listed in bankruptcy filings, Bloomberg reported, is Facebook parent Meta, which is owed $724,000, presumably for online advertising.

Shares of consumer brands have been particularly hard hit this year amid stock market turmoil. Among them:

• Shares of ​​The Honest Co., Jessica Alba’s consumer goods brand, have fallen about 84% since its May 2021 IPO.
• Oat-milk maker Oatly went public in May 2021. Its shares are trading down about 93% since then.
• Poshmark, a second-hand clothing marketplace, went public in early 2021. Its shares are down about 79% since then.
• ThredUp, another used-clothing marketplace, has seen its shares decline 94% since its March 2021 IPO.
• FIGS, which makes medical scrubs, went public in May 2021. Its shares are down about 76% since then.
• Shares of clothing rental service Rent the Runway are down roughly 92% since the company’s October 2021 public market debut.

Related reading:

• These Are The Tech Companies That Went Public In 2021, A Record Year For IPOs

Illustration: Dom Guzman

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Last week it seemed like big rounds were making a comeback. That’s not the case this week, as even the largest rounds were on the small side and there weren’t a lot of them. Investors continued to go big on biotech and another agtech company made the list, along with a mini golf startup—a first.

1. Odyssey Therapeutics, $168M, biotech: Developing drugs is big business, for both biotech firms and investors. This week, Boston-based Odyssey Therapeutics closed a $168 million Series B led by General Catalyst. Odyssey is developing precision immunomodulators and oncology medicines to treat serious human diseases. The company’s drug discovery engine uses artificial intelligence and machine learning for molecular design, a functional genomics platform for target discovery and other proprietary tech. Founded last year, Odyssey has raised nearly $386 million, according to the company.

2. Uniswap Labs, $165M, crypto: Crypto and blockchain have been relatively quiet recently, but there does usually seem to be at least one round that makes this list every week. This week it was New York-based Uniswap Labs—the company behind the Uniswap Protocol exchange— that landed a $165 million Series B led by Polychain Capital. The raise values the company at $1.66 billion, TechCrunch reported. Founded in 2018, Uniswap is a decentralized exchange platform operating on the Ethereum blockchain. The exchange allows users to deposit tokens into larger liquidity pools and buy and sell at predetermined pricing. In a blog post announcing the round, the company said it has now supported $1.2 trillion in trading volume to date. The company has now raised $176 million, according to Crunchbase data.

3. TripActions, $154M, travel: TripActions has been in the news a lot lately. Just two weeks after it was reported the company had confidentially filed to go public next year, the Palo Alto, California-based business travel startup raised $304 million at a $9.2 billion valuation. The round is comprised of $154 million in equity from new and existing financial investors and a $150 million structured capital transaction led by Coatue. The business travel startup raised $275 million in a Series F round led by Greenoaks Capital last October at a $7.25 billion valuation. In May, Bloomberg reported the company was in negotiations to raise funding at a $9 billion valuation. Late last month, Business Insider first reported the company had filed confidentially to go public and is aiming for a $12 billion valuation in Q2 of next year. The report also said Goldman Sachs has been hired to handle the listing.

4. Puttshack, $150M, sports: Who didn’t at one point love miniature golf? Apparently many people still do. Chicago-based Puttshack locked up a $150 million from funds managed by BlackRock and continued support from Promethean Investments. The company blends a night out—food and beverages—with miniature golf and uses its patented Trackaball technology to help automate scoring and create interactive games at each hole. Puttshack plans to use the new cash to expand into many more locations across the U.S. Founded in 2017, the company has now raised $244 million, according to Crunchbase.

5. Soli Organic, $125M: Agtech continues to be big with investors. Virginia-based indoor farming startup Soli Organic raised $125 million Series D led by CDPQ. Soli sells greens and herbs. However, unlike most indoor farming companies that use hydroponics and vertical farming tech, Soli utilizes soil and its own special fertilizer to grow their crops indoors. The company has been around for a while. It started off as Shenandoah Growers in 1989—making it an OG of the agtech sector. The company has raised $487.5 million since being founded, according to Crunchbase data. 

6. Neumora Therapeutics, $112M, biotech: Watertown, Massachusetts-based Neumora Therapeutics, a clinical-stage biotech firm developing medicines for brain diseases, closed a $112 million Series B from investors that included Abu Dhabi Growth Fund (ADG), Amgen, ARCH Venture Partners and others. Founded in 2019, Neumora has raised $650 million in capital, per the company.

7. SprintRay, $100M, 3D printing: Los Angeles-based dental 3D printer maker SprintRay raised more than $100 million in a Series D led by the SoftBank Vision Fund 2, according to a Deal Street Asia report. This is the first disclosed round, per Crunchbase data.

8. Matchpoint Therapeutics, $70M, biotech: Cambridge, Massachusetts-based Matchpoint Therapeutics, a developer of precision covalent medicines to treat immune diseases, closed on a Series A funding of $70 million led by Sanofi Ventures. The company has raised a total of $100 million including its seed round led by Atlas Venture and Access Biotechnology.

9. NorthOne, $67M, fintech: New York-based financial management platform NorthOne raised a $67 million Series B from new and existing investors. Founded in 2016, the company has now raised more than $90 million from investors such as Redpoint and Battery Ventures, per Crunchbase.

10. Ascidian Therapeutics, $50M, biotech: Boston-based Ascidian Therapeutics came out of stealth and announced it had raised a $50 million Series A from ATP, who also developed the company. Ascidian is trying to treat human diseases by replacing mutated exons at the RNA level.

Big global deals

With so few large rounds this week in the U.S., the biggest round globally went to a China-based firm.

• Horizon Robotics, which creates computing platforms for smart vehicles, received a $1 billion investment from Volkswagen for a joint venture. 

Methodology

We tracked the largest rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of Oct. 8 to 14. Although most announced rounds are represented in the database, there could be a small time lag as some rounds are reported late in the week.

Illustration: Dom Guzman

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That was the broad finding from our latest tally of Crunchbase data for U.S. and Canadian venture funding. It shows the pullback that commenced earlier this year has intensified in recent months, as tech valuations in public and private markets contract and the IPO window remains largely shuttered.

Overall, investors put $39.7 billion to work in seed- through growth-stage deals in Q3, down 53% year over year and down 37% from Q2. The year-over-year decline was most pronounced at late stage, which was down 63% in the just-ended quarter.

For perspective, we lay out North American funding totals, color-coded by stage, for the past 11 quarters:

The latest numbers appear less alarming when looking across a two-year time horizon, rather than solely comparing to 2021’s record-breaking tallies. By historical standards, funding totals are still pretty high. Early- and seed-stage dealmaking, for instance, is actually above 2020 levels.

Below, we look at the latest quarterly numbers in more detail, focusing on investment by stage as well as major exits.

Late-stage and tech growth contract sharply

We’ll start with late stage, which saw the sharpest slowdown.

Altogether, late-stage venture and technology growth funding totaled $19.4 billion in Q3. That’s a drop of nearly two-thirds from the $53 billion invested in the year-ago quarter. Funding is also down about 45% from Q2. 

Deal counts also fell, albeit not as precipitously. For perspective, we look at round counts and investment totals for the past five quarters below:

Public markets may be driving much of the pullback in late-stage private markets. With tech and biotech shares down sharply on major exchanges, investors are rethinking valuations. Additionally, with few IPOs happening, pre-IPO rounds aren’t getting done either.

Meanwhile, many late-stage startups, still flush with cash from the 2021 funding spree, may be putting off new raises until signs of market recovery emerge.

Even as late stage contracted, we did see some big rounds. The largest late-stage funding recipients for Q3 include digital manufacturing startup VulcanForms ($355 million Series C), small business policy provider Pie Insurance ($315 million Series D), and urban greenhouse company Gotham Greens ($310 million Series E).

Early stage is down, but less so

Investors also tapped the brakes on early-stage dealmaking. For Q3, they put $17 billion into 879 known funding rounds. In dollar terms, that represents a 40% drop from the year-ago total and a 28% drop from Q2.

For context, we look at early-stage investment and round counts for the past five quarters below:

Early stage is showing a less dramatic decline than late stage in part because companies are further from exit. Apparently, there’s more confidence that market conditions will improve as these startups mature.

By far the largest early-stage deal of the quarter was a $1 billion Series A for TeraWatt Infrastructure, which provides charging stations for electric fleets. Next up was a $350 Series A for Areteia Therapeutics, a spinoff working on asthma treatments, followed by a $300 million Series B for Mysten Labs, a developer of Web3 infrastructure.

Seed slows some

The funding slowdown was much less pronounced at seed stage.

Overall, investors put $3.3 billion into seed-stage deals in Q3. That’s down 18% from Q2 and 6% from the year-ago quarter, which is markedly less than what we saw at later stages.

Seed stage’s comparatively strong showing indicates that investors are more confident about the long-term outlook than the short-term one. Also, while odds of failure are higher for newly minted startups, valuations are lower, which helps mitigate the risk.

Some of the Q3 rounds were unusually large by seed standards. For instance VeeFriends, an NFT project around intellectual property, snagged $50 million in a July financing. And Rippl Care, a mental health startup focused on seniors, landed a $32 million seed round in September.

Still, those were the outliers. The median disclosed seed or pre-seed round for Q3 was around $2 million, and only 25 deals were for $15 million or higher.

Exits

As Q3 was winding to a close, it was looking like a pretty sluggish exit environment, with a mostly shuttered IPO window and not a ton of big M&A action.

But then, in mid-September, Adobe shattered that narrative, announcing an agreement to buy digital design collaboration unicorn Figma for $20 billion in stock and cash, in what’s been called the largest acquisition of a private, venture-backed company to date.

So yes, it might still look like lean times for most exit-hungry investors. But clearly, it’s still an environment where big deals can get done. Below, we look at what transpired in Q3 for both public offerings and M&A exits.

M&A

We’ll start with M&A, which, as previously mentioned, was largely dominated by the ginormous Figma acquisition. That deal was several multiples larger than every other disclosed acquisition combined.

Still, while no one else was spending like Adobe, there were some interesting and good-sized M&A deals over the course of the quarter. We list the top seven below:

Public offerings

The third quarter was not a great time for tech and biotech public offerings, given that both sectors have been taking a beating on major exchanges. Unprofitable companies—a category that includes most-recently public venture-backed deals—were particularly out of fashion.

Even in this suboptimal environment, however, several funded companies did make it to market, either through previously announced SPAC transactions or traditional IPOs. We list nine public market debuts below:

The largest debut was Rubicon, a Lexington, Kentucky-based online marketplace for waste and recycling, which wrapped up a SPAC merger in August and debuted at a $1.7 billion valuation. Shares have fallen sharply since the debut.

Next up was D-Wave, a quantum computing company that completed its SPAC merger in August in a deal that valued the company around $1.6 billion. Shares are well below their peak but are holding at better-than-average for a SPAC deal.

Down from a very high peak

So as we bid adieu to Q3, what should one make of these mostly downwardly trending numbers?

One of the key things to keep in mind is that we are scaling down from extremely tall heights, as 2021 surpassed prior funding records by a long shot. So, while an over 50% year-over-year funding decline may make for an alarming headline, we’re still close to where we were a couple years ago. And at the time, that was considered a pretty good period for startup funding.

Of course, late stage is faring worse than early stage and seed. Given the large sums of dry powder still in the coffers of venture investors, however, it’s likely they’ll begin spending more profusely once more consensus emerges around valuations and exit conditions improve.

For now, however, the numbers are indeed down. No up cycle lasts forever.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Oct. 3, 2022.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

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September has come and gone and there’s a chill in the air as the days have gotten shorter.

Despite those shorter days, there were still plenty of interesting rounds that went to innovative startups this month, including faux pet food, more bug food and money for an AI-created virtual person.

A little creepy

There are a lot of real people in the world, but apparently some have moved on to virtual people now.

Montreal-based AI company Lia 27 closed a $5 million seed round led by the gaming company President as well as by “a prominent wealth adviser and by an international business magnate.” The startup has created Lia—a virtual person created by AI which has a 3D presence with integrated movement and voice technology. She even has her own social media handles.

In the last year, the not-real Lia has garnered an audience of more than 300,000 and the company expects to use the new funding to grow that to more than 1 million by early 2023.

According to the company, Lia becomes increasingly smarter with every interaction she has with her fanbase, which can include discussing anything from math and philosophy to everyday chit-chat.

Although Lia27 points out she will “shy away from romantic conversations.”

Justice for all

There are few jobs as thankless as being a public defender (full disclosure, my father was a public defender for 30-plus years).

Most are overworked and underpaid, balancing several cases for those who have no other options and must face a justice system that can be daunting to even those familiar. The American Bar Association recently estimated that Oregon’s public defender workforce is sufficient to represent less than a third of those who require legal counsel.

JusticeText raised $2.2 million this month to ease some of the burden. The company—which the founders started as a school project while attending the University of Chicago—helps store, analyze and share video evidence, like police video. That includes transcribing video and making that text searchable, saving lawyers valuable time. The product is geared toward public defenders.

Irvine, California-based JusticeText, launched last year, now works with more than 50 public defender agencies.

The round included investment from the likes of Bloomberg Beta, True Ventures and even John Legend.

Better pet food

Two growing sectors right now are pet care and faux meat.

When you combine the two, you get Boulder, Colorado-based company Bond Pet Foods closing a $17.5 million Series A which included investment from ADM Ventures, Cavallo Ventures and others.

The startup, which creates meat proteins through fermentation, previously had focused on plant-based pet treats but will use the new funding to push further into all pet food applications trying to reproduce the likes of chicken, fish and beef. 

Which is amazing since so many startups find it difficult to do just one of those right.

The company estimated the pet nutrition sales globally already top $100 billion and are growing at 4.5% a year, so it is not surprising the startup is looking to expand in the space.

The company will use the new cash to expand its meat protein portfolio and scale up production at a new 15,000-square-foot facility in Colorado.

Don’t smoke that

Let’s stay on plant-based meat for a minute.

Israel-based food tech startup BioBetter closed a $10 million Series A led by Jerusalem Venture Partners this month to further push its cell-cultured meat closer to broad-scale production.

While a lot of companies are making faux meat, it is what BioBetter is using that caught our eye. BioBetter uses tobacco plants as “bioreactors” for creating the growth factors needed for the cellular development of cultivated meat. 

The startup said the princess could “significantly reduce the cost” of cultured meat, as well as help with its commercialization, as two of the biggest issues the industry faces are the steep costs and limited availability of growth factors.

With fewer people smoking than ever before, maybe this is good news for tobacco farmers?

More bugs

Last month, we talked about India-based Loopworm, and the upcycling it does with insects, turning food waste into protein-rich animal feed.

This month, Paris-based InnovaFeed—which also raises insects for animal and plant nutrition—raised a $250 million Series D led by Qatar Investment Authority. The company has raised a whopping $450 million to date, per the company.

Who knew there was so much money in insect farming?

Innovafeed also said it has already secured commercial partnerships for “volumes representing more than €1 billion over the next 10 years,” and will use its tech to develop ingredients for not just plants and animal food, but also human food.

The company will use the new funds to push geographical expansion, which includes the construction of a new production plant in Decatur, Illinois.

Illustration: Dom Guzman

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