Using Crunchbase data, we set out to track the funding trajectories of these seed- and pre-seed companies, starting with the very AI-centric winter 2024 batch, which wrapped up its demo day in early April. We grouped companies by industry and recorded who has announced funding.  We also looked at which investors are most active in backing these startups.

Although not all of the latest YC companies that raised seed funding have publicly announced it yet, a few have. Those with disclosed investments include a number bringing AI-enabled tools to sectors like legal tech, recruiting, code development and medical recordkeeping. They’ve attracted funding from active seed investors like Pioneer Fund and SV Angel 1, as well as prominent venture capital firms like Benchmark, Khosla Ventures and General Catalyst.

An AI-centric batch

Half of this recently launched batch is building with AI, said Garry Tan, CEO of Y Combinator, in a post announcing its second post-COVID cohort that gathered in person in the Dogpatch neighborhood of San Francisco.

Tan took the helm over a year ago and moved YC up to the city. (He left his firm Initialized Capital, an early-stage firm he co-founded in 2012 with Reddit co-founder Alexis Ohanian.)

Being in-person and in the city has apparently created a stronger community.

“Hundreds of founders are meeting daily for office hours and events, bumping into legendary people, and surrounding themselves with people who will go deep on subjects and celebrate hard work,” said Lindsay Amos, director of communication, via email. “There is no other place in the world with the same density of great startup founders per square mile as the area around the YC office — and this is fostering innovation and growth.”

San Francisco is experiencing a resurgence due to AI, which is borne out by Crunchbase data.

According to  Jared Friedman, YC group partner, these companies skew younger — 30% of the last batch are college students or grads. Two years ago they were around 10%. “Because of AI, it’s the best time in a decade for college students to start startups,” he said.

Enterprise companies still dominate, with more than two-thirds of the companies in enterprise SaaS. Around 11% are consumer oriented — with AI as the driver for many of the consumer offerings.

After the peak of 2021, the size of YC batches have come down. But YC still launches the largest number of companies in a single cohort — 260 companies in the winter batch.

Seed funding

Interacting in person benefits founders and their rate of progress, said Jason Gray, founder of seed investor Pioneer Fund, an active investor in YC companies, via email.

Pioneer has a network of portfolio companies and venture partners that add up to 1,500 YC alumni with relationships to founders either as a friend, former colleague or customer, according to Gray.  This allows for front loading due diligence.

On the common misconception that YC companies raise funding in advance of demo day, Gray said “while it does happen, it’s not the norm.” He added that “many founders focus on traction until demo day and are selective about which investors they allocate to before then.”

YC hosts an investor evening as well as sharing pitches online. “The in-person element does drive some urgency, which we believe is a benefit to both founders and investors,” said Gray. “Minimizing the distraction of fundraising for founders is in everyone’s best interest.”

The median raise, according to YC, is around $1.3 million post-demo day.

Based on an analysis of Crunchbase data, over all time Andreessen Horowitz, Khosla Ventures and Sequoia Capital are the most active multistage investors in YC companies by deal count. On the seed fund side, Liquid 2 Ventures, SV Angel, Pioneer Fund, FundersClub, Soma Capital and Garry Tan’s previous fund Initialized Capital are most active.

Of the winter 2024 cohort, meanwhile, funded companies include:

• Stockholm-based Leya, an AI assistant for lawyers using proprietary data alongside cited legal sources. The company raised a $10.5 million seed led by Benchmark with partner Chetan Puttagunta joining the board. Belgium-based Hummingbird Ventures and SV Angel participated. Leya is working with 70+ European legal firms and has plans to expand to the U.S.
• San Francisco-based Greptile, built an API that uses large language models to answer questions about a company’s code base. It raised a seed funding of $4.1 million led by Initialized Capital.
• San Francisco-based YonedaLabs, built by a team from Cambridge University, is creating a foundation model for chemists which can predict outcomes without having to run costly trials. The company raised a $4 million seed round led by Khosla Ventures with participation from 500 Emerging Europe, 468 Capital and Fellows Fund among others.
• San Francisco-based Pythagora, built by a team from Croatia, raised $4 million to help build apps with  natural-language interactions. The tool is open-sourced and said to be used by 30,000 developers. Investors include Inovo, 500 Emerging Europe, Moonfire Ventures, Rebel Fund and UpHonest Capital.
• Spacecraft software company Basalt Tech, based in San Francisco, raised a $3.5 million seed funding led by Initialized Capital.
• Paris-based Malibou helps small businesses manage payroll and compliance. It raised a $3.1 million seed led by European venture firm Breega.
• San Francisco-based Hona AI, an AI data platform for healthcare records, raised a seed funding of $3 million led by General Catalyst.
• San Francisco-based Apriora, an AI interviewer to screen job candidates, raised $2.8 million led by 1984 Ventures with participation from HOF Capital and Pioneer fund.
• Manifold Freight, a Seattle-based logistics aggregator of spot freight, raised a $2 million seed round from New Stack Ventures and YC. The founders were engineers at digital freight company Convoy which closed last fall.

Related Crunchbase Pro lists and searches

Pro subscribers can export these lists to track progress over time within their Crunchbase Pro accounts.

• Y Combinator Winter 2024 batch tracked here.
• Y Combinator Unicorn Portfolio Companies
• Y Combinator Exited Unicorn Portfolio Companies

Illustration: Dom Guzman

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

SaaS businesses grew in 2023, but they did so at a much slower rate than the years of pandemic hypergrowth. At the same time, revenue growth was down and churn rates were at an all-time high, reflecting a period of “normalization” post-pandemic due to rising interest rates and enterprises cutting down on their software expenditures.

After a year characterized by slowdowns and cutbacks, our analysis of real-time subscriptions data from more than 34,000 software companies in Q1 2024 shows that the SaaS market has started the year on a more positive note, with growth coming back, churn slowing down, and businesses adapting to the new realities of a recalibrated software market.

Those findings are from the most recent SaaS metrics report by my company, Paddle, which is a payments infrastructure provider for software companies. Using an anonymized aggregate of data from the SaaS companies that use our ProfitWell Metrics tool, we’re able to see trends for the industry around key metrics such as growth and churn.

Signs of improved health

Drawing on our data from Q1 2024, we’ve noticed signs of improved health in SaaS.

There’s been a resurgence in B2C software growth in particular, with CAGR at 6.3% in Q1 — double that in Q4 2023 and the best quarter since Q1 2022.

A consistent uptick in new sales activity in the B2C market since the end of 2023 has contributed to this, as well as a 17.5% spike in subscription upgrades in February alone.

This bodes well for the B2B sector, as growth in consumer revenue is often a leading indicator of future growth in enterprise revenue.

New sales for B2B SaaS companies have also dramatically improved, up 20% from December’s two-year low point.

Taking a quarterly view of new sales, the averages for B2B are still down on the last few high-growth years (2021 and 2022) but are up 40% on pre-pandemic performance (2019) — further evidence of market reconciliation as it settles on a lower level.

(For this graphic, a 1.00 reading represents sales on an “average” day in 2019, while a 1.10 reading would be 10% higher sales.)

B2B software leaders adapt to the ‘new normal’

Notably, amid these early signs of improved sales and revenue growth, B2B customer churn has fallen to an 18-month low, improving 14% since December and down 12% from where it was a year ago.

This has come amid an uptick in upgrades and downgrades from companies moving customers to different tiers or subscription plans to keep them from churning.

This suggests B2B SaaS companies are, wisely, actively looking to combat churn and drive more revenue from their existing customers.

Reining in these high levels of churn and focusing on retention and expansion underscores a concerted effort within the sector to fortify relationships with, and continue to deliver value to, their existing customers, something that is much more valuable in a low-growth environment.

Strategies to thrive as the SaaS market resets

As the market goes through this recalibration, there are a number of strategies that SaaS companies should employ to ensure they continue scaling sustainably.

Balance product-led and sales-led growth

In a more difficult selling environment, merging product-led growth and sales-led growth is an obvious option for SaaS founders. Very few companies will be able to scale by relying solely on one or the other.

For those businesses with a strong PLG offering, layering on a sales-led approach means product teams can provide sales with product usage data to bring on target accounts at an enterprise level and win long-term customers.

For those who have a largely SLG motion, opening a product up with PLG widens your total addressable market. Crucially, it also forces you to create a product experience that sells itself. More people using the product drives greater adoption and more opportunities to bring in the sales team at the right time.

Successfully merging these two motions leads to a more efficient overall sales function where expansion and retention are built in.

Experiment with new growth channels

To continue growing, companies need to find ways to increase efficiency while decreasing costs. A growing trend in the mobile app space, for instance, has been to unlock growth by driving customers to complete purchases outside of the traditional app stores.

There are benefits to selling through an app store but it comes at a cost. Most levy a hefty 30% commission on sales and force businesses to follow specific frameworks when engaging with customers that restrain flexibility and revenue generation capacity.

To mitigate this, many companies are now pushing in-app customers to transact via their websites instead to recoup lost revenue and accelerate growth. Done well, the benefits of this can be vast, including access to a bigger customer base, greater flexibility and customer insights, and more control over the sales and marketing experience.

Build strong foundations for international sales

One growth strategy that no SaaS company should overlook is the opportunity to sell globally. Growth has slowed in traditional major markets like the U.S., Canada and the U.K., but markets in Europe, Australia and New Zealand continue to grow significantly.

To successfully scale in international markets, SaaS companies need to ensure they’ve done their due diligence and have the capabilities to clear potential hurdles like international payments acceptance, tax compliance, supporting different currencies and languages, and minimizing FX fees.

Reasons for optimism in 2024

After several challenging years, there are early signs of encouragement for SaaS in 2024.

While both B2B and B2C trends might change in the months ahead, the increased focus among SaaS businesses on combating churn and delivering value to existing customers suggests founders are adapting well to the “new normal” in SaaS.

Combining these good habits of pursuing efficient and more sustainable growth with the strategies outlined above will give SaaS businesses a great chance of having a successful year ahead.

Jimmy Fitzgerald is CEO of Paddle, a payments infrastructure provider for SaaS businesses, powering hyper-scale growth across acquisition, renewals and expansion. A SaaS veteran, Fitzgerald has spent more than two decades growing ambitious technology companies.

Illustration: Dom Guzman

Steak might have been on the menu 10 years ago when a sales lead took a CIO to dinner to close on a software deal. At the time, CIOs controlled every piece of software their company purchased. They were the gatekeepers to adoption, and the sales cycle was designed to capture their influence over the budget for software procurement.

Today’s CIOs have democratized their purchasing power to the rest of the C-suite, executive leaders and the individual users of software. They might not even be aware of all of the software applications that employees are using — a huge shift in visibility into the adoption of tech and information-sharing with third parties.

With this shift, end-users now hold the power when it comes to influencing software purchases and renewals, and the SaaS startup landscape is adjusting accordingly.

SaaS sales cycles vs. instant gratification

Gen Z and millennials make up nearly half of today’s workforce. Their expectations for productivity-driven business software are informed by their reality which has been shaped by delightful user interfaces and instant gratification. They want predictive, user-friendly solutions that are best in class for their role, delivering instantaneous ROI without material implementation effort.

Considering this demographic shift along with the transformation of the CIO role, SaaS startups are compelled to understand how they can reach individuals to drive product-enabled growth and virality. Slack is an example of a company that pioneered this model, selling to individual users first and then making its way into the enterprise.

Today, 58% of B2B companies have a product-enabled strategy in place. As this pattern continues, SaaS startups are forced to meet Gen Z and millennials’ desire for seamless software adoption.

SaaS startups need to nail the data

With instant gratification in mind, SaaS startups need to put the right data in front of end-buyers. Data on every software vendor is available to users through a Google search, making it easy to compare vendors in every software category.

Given the information at their fingertips, users can identify the functionalities that fit their needs without engaging with a salesperson during the discovery phase. While the role of a salesperson is still critical to catalyze a sale, transparency among product, pricing and packaging is changing how software is purchased.

Incorporating data and ROI calculators to underscore the value of the solution early in the sales cycle is imperative to attract and retain the attention of the modern user.

More startups will tackle security

Although CIOs are no longer front and center in sourcing the software stack, they are still involved in cybersecurity management to prevent enterprise vulnerabilities. According to a 2023 report, security management was the most common responsibility CIOs were tasked with.

The rise of generative AI is giving way to a Pandora’s Box of cybersecurity concerns. Attack vectors and security vulnerabilities have dramatically changed within the past five years, and we have more data to protect than ever.

This ties back to the SaaS landscape and transformed CIO role. When each employee is requisitioning software, it becomes more difficult to guarantee your company’s data is protected. This reality and the emergence of generative AI safety concerns will give way to more startups tackling security, compliance and identity management.

Oftentimes, software sales cycles at the enterprise level entail complex procurement, information sharing and security questionnaires that slow down the sales cycle. Navigating company vulnerabilities is becoming more complex, yet employees are seeking more transparency than ever. This year, we’ll see a new category of software companies emerge to reconcile the two conflicting priorities.

Priya Saiprasad is a general partner at Touring Capital. She co-founded the firm after 13 years in venture capital, M&A and enterprise technology. She was most recently a partner at SoftBank Vision Fund, where she led investments into category-defining software companies including Pixis, Vendr, Observe.ai, CommerceIQ, Sendoso and Skedulo. Previously, Saiprasad was at Mayfield Fund1 focused on early-growth investments, and a founding member of M12 (Microsoft’s Venture Fund), where she led investments in Go1, Workboard, PandaDoc, Element AI (acquired by ServiceNow), and Bonsai (acquired by Microsoft). Prior to that, she was a deal lead in Square’s M&A team leading acquisitions at the intersection of software and machine learning.

Illustration: Dom Guzman

This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here.

This week was a story of the haves and have-nots. Of course there were more big AI-related rounds (the haves) but also a couple of big raises from some sectors that had been eschewed by investors not that long ago  — autonomous vehicles and industrial security (the have-nots). 

All in all, it was another strong week for big rounds. The top 10 list also includes three new unicorns.

1. Applied Intuition, $250M, autonomous vehicles: Autonomous vehicle software developer Applied Intuition locked up a $250 million Series E valuing the company at $6 billion — a 67% uptick in value from its previous round. The new round was led by Lux Capital, Elad Gil and strategic investor Porsche Investments Management. The Mountain View, California-based startup develops software for the automotive, trucking, construction, mining and other industries. The company leverages generative AI in developing software to help customers create driver-assistance systems and automated driving solutions. The up round comes despite venture funding in the autonomous vehicle sector continuing to be in decline. Last year, autonomous driving startups raised less than $5 billion — the sector’s lowest funding total since 2017, per Crunchbase data. The drop has come amid numerous setbacks for the industry. Just last month, Apple unceremoniously shuttered its autonomous electric car initiative after a decade of work. Founded in 2017, Applied Intuition has raised more than $600 million, per Crunchbase.

2. Luminary Cloud, $115M, software: Engineers make a lot of cool things nowadays. To do that, they need to simulate how things will react under certain conditions. Luminary Cloud, a computer-aided engineering SaaS platform, came out of stealth this week to help them do just that. The San Mateo, California-based startup also announced a $115 million raise led by Sutter Hill Ventures. The company has customers in the aerospace and defense, automotive, industrial equipment and other industries, looking to solve challenges such as increasing the range of electric vehicles and achieving energy efficiency goals.

3. Zephyr AI, $111M, biotech: Mclean, Virginia-based healthcare startup Zephyr AI closed a $111 million Series A from investors that included Revolution Growth and Eli Lilly & Company. Like many biotech startups raising big money currently, Zephyr is bringing AI to the sector. The company pairs its healthcare dataset with artificial intelligence algorithms to create insights in the areas of oncology and cardiometabolic disease. Founded in 2020, the company has raised nearly $130 million, per Crunchbase data.

4. Together, $106M, artificial intelligence: It was less than four months ago that AI startup Together made this list with a $102.5 million Series A funding round led by Kleiner Perkins. Well, the Menlo Park, California-based startup is back with a $106 million round led by Salesforce Ventures 1. The new round doubles the company’s valuation to $1.25 billion. The Nvidia-backed company has developed a cloud platform to allow developers to build on open and custom AI models — allowing customers to fine-tune open source foundation models. Founded in 2020, the company has raised nearly $230 million, per Crunchbase.

5. Nozomi Networks, $100M, cybersecurity: Things are looking up for industrial cybersecurity startups. A week after Claroty made this list, startup Nozomi Networks locked up a $100 million Series E from investors including Mitsubishi Electric and Schneider Electric. The San Francisco-based company offers industrial security — also called operational technology (OT) security — and IoT security platforms. While the sector is not threatening generative AI’s hold on investors, it does show once again investors — especially strategics — are eyeing the industry as attacks and threats mount. New OT security platforms have long been thought to hold potential, but securing older industrial control systems that were designed decades ago — long before cyberattacks were a reality — has proven difficult to build. Founded in 2013, Nozomi has raised $266 million, per Crunchbase.

6. CarbonCapture, $80M, climate: Los Angeles-based CarbonCapture, a direct air capture company, completed a $80 million Series A led by Prime Movers Lab. Founded in 2019, the company has raised $115 million, per Crunchbase.

7. Liquid Death, $67M, beverage: Trendy beverage startup Liquid Death hit unicorn status after closing a $67 million financing at a $1.4 billion valuation. No lead investor was named, but the round included investment from the likes of SuRo Capital, strategics and several folks in the entertainment and sports world. The Los Angeles-based healthy beverage startup, founded in 2017, has raised nearly $268 million, per Crunchbase.

8. Bear Robotics, $60M, robotics: Redwood City, California-based Bear Robotics, a robot waiter startup, raised a $60 million from LG Electronics. Founded in 2017, the company has raised nearly $176 million, per Crunchbase data.

9. Serenity Kids, $52M, food: Austin, Texas-based Serenity Kids, a maker of shelf-stable pouched baby food, closed a $52 million minority investment and partnership with Stride Consumer Partners. Founded in 2016, the company has raised nearly $64 million, per Crunchbase.

10. Berachain, $69M, blockchain: Minnesota-based blockchain platform Berachain reportedly raised  more than $69 million in a funding round co-led by Brevan Howard Digital and Framework Ventures that values the company at $1.5 billion. Founded in 2021, the company has raised $111 million, per Crunchbase.

Big global deals

Applied was the biggest round of the week globally, but the second largest of the week came from Europe.

• Germany-based Tubulis, a chemotherapeutic medication developer, raised a more than $139 million Series B.

Methodology

We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of March 9 to 15. 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

After all, most founders don’t start out with the vision of selling their startup to a leveraged institutional buyer looking to profitably offload it again in a few years. It arguably lacks the narrative appeal of, say, a sale to a tech giant or a smash public debut.

Nonetheless, for software companies in particular, acquisitions by private equity firms are statistically one of the more common kinds of exits. Over the past five years, the most-active PE buyers have collectively spent over $36 billion to buy dozens of private companies in the space, Crunchbase figures show.

As illustrated in the chart below, M&A deals for private companies peaked in 2020 and 2021, and slowed considerably in recent quarters.

A similar trend is apparent when we look at PE purchases of both public and private software companies:

Active buyers

We can point to a few factors over the past couple years that likely contributed to the slowdown in PE deals. For one, global software investment and M&A is down overall. Valuations have also been in flux, with high-flying startups readjusting following public market pullbacks.

Additionally, in hindsight, PE firms, like most acquirers, probably overpaid for many boom-era deals. That should leave them more wary of big-ticket purchases going forward. Higher interest rates and a chilly IPO climate serve as further hindrances.

Still, we shouldn’t let a few sluggish quarters distract us from the bigger picture. This is that, consistently, a handful of private equity firms account for a large share of the biggest software exits.

In particular, the eight firms listed below stand out.

Biggest startup deals

Many of the pricier deals involve venture-backed companies. Over the past four years, the largest include:

• CRM software provider Pipedrive sold a majority stake to Vista Equity Partners in 2020 in a deal that reportedly valued the company at $1.5 billion. Previously, New York-headquartered Pipedrive had raised more than $90 million in known venture funding.
• Software and tech-focused private equity firm Thoma Bravo reportedly paid $2.85 billion in 2020 to purchase a majority interest in Flexera, an Illinois-based provider of IT management software. The firm previously owned a majority stake in Flexera before selling several years earlier.
• PE investor Hellman & Friedman acquired a majority stake in Atlanta-based application security provider Checkmarx in 2020 at a $1.15 billion valuation.
• Vista Equity Partners acquired a majority stake in customer experience software provider Gainsight in 2020 in a deal that valued the company at $1.1 billion. Previously, San Francisco-based Gainsight had raised over $150 million in venture funding.

Notably, most of the larger deals happened at least a couple years ago. That’s not surprising, as PE deal volumes and prices tend to rise when exit opportunities are bountiful and financing terms are comparatively cheap. Lately, of course, those conditions have not applied.

Related Crunchbase Pro lists:

• Software Startup Acquisitions By The Most-Active Private Equity Buyers

Illustration: Dom Guzman

In 2023, the crossover investor giant took part in only 29 completed and announced venture deals — per Crunchbase data — a steep decline from the 168 deals it took part in in 2021 and a 57% drop from the 70 deals in 2022.

As deal-number dropped, so did the total value of all deals Coatue was participating in. The 168 deals Coatue took part in came to nearly $43 billion. (That was the total dollar amount of all the deals, not what Coatue invested. Individual investments in rounds are not typically revealed.)

Last year, the total dollar amount for the 29 deals the firm participated in came to only $4.1 billion, per Crunchbase.

In the headlines

Coatue, whose more noteworthy investments include Lyft, Reddit and Box among others, has made recent headlines for closing its London office earlier this month — the firm still plans to invest in European startups — as well as news that Michael Gilroy, a general partner at the firm who co-led its growth team and focused on fintech companies, is leaving.

However, it also has been reported the firm has raised about $3 billion for a structured equity fund — which allows private companies to raise money through structured financings and avoid down rounds.

Such financings would not be new to Coatue. Back in 2022, it was reported Komodo Health raised a “structured equity infusion” of $200 million led by the firm. Coatue also conducted a $150 million debt financing for Navan — then called TripActions — that same year.

Just last August, Coatue also took part in a $2.3 billion debt financing for AI cloud infrastructure startup CoreWeave. That round actually represented the largest round involving VC-backed companies Coatue took part in last year.

However, the firm also participated in two $300 million funding rounds — for both Ramp and Our Next Energy — as well as a $290 million funding for Sierra Space. Coatue did not lead any of those rounds.

Different time

Of course, Coatue is not alone in its pullback in investing. Other large crossover investors that made a huge splash in the venture market like Tiger Global and Dragoneer also have severely reduced their investment cadence.

As venture started to explode in 2020, many large firms with deep pockets looked at the startup sector as a viable investment that could produce home-run returns. As money turned more expensive after the end of 2021 and startup valuations started to fall, many firms were left with significant markdowns.

So far 2024 does not seem like it will be a big rebound year. For example, Coatue has been part of only one announced round this calendar year — a venture round for Montreal-based software startup Valsoft.

However, things can change fast in venture — just look at how quickly the market turned after 2021.

Related Crunchbase Pro query:

• Coatue Investments

Related reading:

• Khosla Ventures Nears $3B For Funds Even As Venture Slows
• Most Active US Investors: Gaingels And Khosla Ventures Pick Up The Pace
• Andreessen Horowitz May Be Optimistic About Tech, But It’s Still Slowing Its Deal Pace

This is a weekly feature that runs down the week’s top 10 announced funding rounds in the U.S. Check out last week’s biggest funding rounds here.

The second full week of the new year got a big jolt near the end of it with Flexport’s huge raise. That round, combined with an even bigger raise by a quantum computing startup — and along with a handful of $75 million rounds — made it a pretty solid week.

1. Quantinuum, $300M, quantum: Quantinuum locked up a fresh $300 million equity fundraise at a pre-money valuation of $5 billion, as investors are clearly excited about the possibilities of quantum computing. The new funding was led by JPMorgan Chase. The Broomfield, Colorado-based company was spun out of Honeywell in 2021 and merged with Cambridge Quantum Computing. Quantinuum says it has now raised approximately $625 million. Last year, funding to quantum computing startups hit nearly $1.2 billion, per Crunchbase data. That number dwarfed the less than $800 million raised in 2022 — making quantum one of the few sectors to see an increase in venture funding in 2023. While it’s too early to say venture funding will again increase in the sector this year, it is evident investors see the potential in both quantum technology and its ability to produce big financial returns.

2. Flexport, $260M, logistics: The news broke late Friday — logistics giant Flexport is raising $260 million from partner and e-commerce titan Shopify after burning through hundreds of millions of dollars last year, per a report in The Information. The huge fundraising event is just the latest headline for the San Francisco-based startup that hit a peak valuation of $8 billion almost exactly two years ago after raising a massive $935 million round. Flexport and Shopify are no strangers to making deals with each other. Last May, Flexport announced the acquisition of the assets of Shopify’s logistics business for a 13% equity interest in the private company. Shopify also gave Flexport a $40 million cash infusion as part of the deal, per The Information report. Of course, that was far from the only reason Flexport was in the news last year. In September, the big news hit that Flexport’s then-CEO Dave Clark was abruptly leaving the company after just a year and founder Ryan Petersen was coming back to take the reins as the company struggled with shipping volume declines after the pandemic boom. Flexport also made headlines in November after acquiring the assets of shuttered Jeff Bezos-backed digital freight startup network Convoy. Flexport had raised nearly $2.4 billion in equity and debt before the new Shopify round. Some of its noteworthy investors include Andreessen Horowitz, MSD Partners and the SoftBank Vision Fund.

3. (tied) Cleveland Diagnostics, $75M, biotech: There have not been a lot of big raises so far this year, but the few we have seen are usually related to biotech. Cleveland Diagnostics is the latest example, locking up a $75 million round led by Novo Holdings. The Cleveland-based biotech is developing diagnostic tests for the early detection of cancers and will use some of the new proceeds to grow the use of its novel IsoPSA prostate cancer test. Founded in 2013, the company has raised $111 million, per Crunchbase.

3. (tied) Comanche Biopharma, $75, biotech: Like we said, there’s been several big rounds in biotech. Concord, Massachusetts-based Comanche Biopharma locked up a $75 million Series B led by New Enterprise Associates. The startup is looking at therapies for preeclampsia, a serious pregnancy complication that affects approximately 10 million women globally each year, according to the company. The issue can lead to complications for both the mother and the baby, including multiorgan damage and seizures. Founded in 2020, the company has raised $111 million, per Crunchbase.

3. (tied) DailyPay, $75M, fintech: Waiting for payday can be a drag. New York-based DailyPay just raised a fresh $175 million so you don’t have to do that. The company partners with employers to allow employees to track, transfer, spend or save their pay as they earn it. The new round was made up of $100 million in an expanded credit facility and more than $75 million in equity financing led by Carrick Capital Partners. The round valued the company at $1.75 billion on a pre-money basis. Founded in 2015, the company has raised $1.2 billion, per Crunchbase.

3. (tied) Tr1X, $75M, biotech: We are not quite done with the big biotech raises yet. San Diego-based Tr1X popped out of stealth this week and announced a $75 million Series A led by The Column Group. The company is developing therapies for autoimmune and inflammatory diseases. Founded in 2018, this is the company’s first round with a disclosed amount, per Crunchbase.

7. Digital Onboarding, $58M, SaaS: Boston-based Digital Onboarding, a customer relations platform for financial services, closed a $58 million investment from Volition Capital. Founded in 2015, the company has raised nearly $63 million, per Crunchbase.

8. Forta, $55M, health care: San Francisco-based Forta, which uses AI to help with access to quality care, raised a $55 million Series A led by Insight Partners. Founded in 2021, this is the company’s first round with a disclosed amount, per Crunchbase.

9. Ratio Therapeutics, $50M, biotech: Boston-based Ratio Therapeutics, a pharmaceutical startup developing radiopharmaceuticals for the treatment and monitoring of cancers, closed a $50 million Series B from various investors including Bristol Myers Squibb. Founded in 2021, Ratio has raised more than $90 million, per the company.

10. SmartLabs, $48M, biotech: Boston-based SmartLabs, which provides laboratory infrastructure and resourcing as-a-service to companies, locked up a  $48 million Series C from several investors including Conversion Venture Capital. Founded in 2015, the company has raised more than $400 million, per Crunchbase.

Big global deals

The biggest deal of the week came from the Red Dragon.

• China-based AaltoSemi, a manufacturer of packaging substrate products for semiconductors, raised approximately $351 million in a venture round.

Methodology

We tracked the largest announced rounds in the Crunchbase database that were raised by U.S.-based companies for the seven-day period of Jan. 13 to 19. 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

Clarification: This story has changed since its original publication to add Flexport’s $260 million raise.

We hurtle down the highway, well above the speed limit, moving easily over the smooth road, trusting our Tesla’s Autopilot to handle the slight bends as they come.

But as we enter the Golden Gate Bridge heading toward San Francisco, the lane narrows, encroached on by construction and temporary barriers on the left, the road becomes unpredictable, uneven and full of cracks — I immediately take control of the wheel.

Anyone who has tried Autopilot in a Tesla is sure to have had a similar experience. It’s good enough to handle the monotonous long highway stretches. But when the driving gets challenging, it’s clearly not up to the task.

But what’s wrong with this picture? Is there some inherent reason why AI should be good at the easy, mindless tasks, but bad at the hard ones? Logically, as processing power increases and models improve, at some threshold Autopilot ought to be better than a human.

A few years from now, when the road narrows and the driving gets challenging, I expect to turn Autopilot on.

Easy-task AI

If we look at the state of AI companies today, we find parallels. With the world agog at the surprising abilities of ChatGPT, new companies pop up every day purportedly serving novel cases across every industry.

For the most part, these use cases are analogous to driving along a smooth, paved highway. They fall primarily into “easy-task AI” scenarios: high volume, low criticality and, relative to other scenarios, high tolerance for error. Most AI-based tools today focus on repetitive tasks, letting humans address the high-value, mission-critical situations.

Some examples: More than $1 billion in venture capital has been raised for AI startups in customer service, including Uniphore, Forethought, Moveworks, Observe.AI and Gorgias, in addition to products from incumbents such as Intercom’s AI bot, Fin.

Enterprises may tolerate errors in support workflows, provided a large volume of inquiries can be addressed cost-effectively; customers will always escalate to a human if the AI doesn’t get the job done.

The state of AI in legal is similar: DoNotPay is a brilliant example of using AI to brute force solve legal issues where it’s OK to sometimes be wrong, such as fighting parking tickets, canceling subscriptions and myriad other fairly low-stakes legal tasks.

Similarly in medicine, companies like Abridge save time by automating clinical notes. In this case, AI is not replacing doctors, just making them more efficient.

But is that the future? It seems odd to relegate AI models — trained on more data than an individual could ever internalize — to only relieving humans of tasks that most would consider repetitive, mundane or “easy.”

Instead, it seems far more likely that AI will begin to take on the hard tasks.

Hard-task AI

What does the world look like when the most difficult, mission-critical, high-risk tasks are the ones that AI does best?

We are seeing hints already. Researchers from MIT and Massachusetts General Hospital are developing an AI model that analyzes CT scans, potentially detecting lung cancer years earlier than a human radiologist. Is there a day in the future that a bot with a vast corpus of knowledge of previous cases will be your primary care physician?

The U.S. Air Force has demonstrated the X-62A Vista, an AI-piloted fighter jet with faster response times and greater precision than a human pilot.

Defy.vc portfolio company Aircover.ai is building a virtual sales engineer: Imagine if a sales rep on their first day already knows how to flawlessly answer all the questions that would have required a product expert or SE to be on the call? Would you ever do a high-stakes sales call without your AI assistant?

As AI takes on tasks beyond the capabilities of humans, here are some industries we can expect to be impacted:

Medicine: AI systems that analyze clinical data and predict diagnoses with more precision than human doctors, and provide recommendations for medication and treatment plans. AI-assisted surgery is in its infancy. Drug discovery is already being revolutionized by AI.

Transportation: Autonomous vehicles are only the beginning. Beyond platooning of trucks, imagine if vehicles on the road communicate with one another and form a network, acting effectively as a single organism to adaptively minimize congestion and operate at higher speeds safely, rather than compounding delays as each driver responds.

Enterprise SaaS: Why must every CIO reinvent the wheel in their organizations? Internal systems will be self-integrating; automation will connect systems from disparate vendors to achieve complex tasks. Intelligent analysis of data will be through conversational interfaces.

Security: Advanced models already detect fraud by analyzing patterns across millions of transactions, far beyond the skills of any human. Sophisticated AI systems are already scoring risk across hundreds of thousands of employees. We will live in a future without passwords, where enterprise security systems operate silently behind the scenes adapting to signals from a shared security network across enterprises.

Workforce of the future: The questions are inevitable. What is the role of humans in this new world? What are the interfaces between humans and the new intelligent systems? What governance models are needed? How much autonomy do we accord these systems? What skills should we be teaching our children to prepare for a future where the hard intellectual challenges are handled by intelligent systems?

I’d like to hear what use cases for AI you are envisioning for the future.

Bob Rosin is an investment partner at Defy.vc. As a founder, serial entrepreneur and former leadership team member at Skype, LinkedIn and Stripe, he’s experienced all facets of startup life. Rosin serves on the boards of GajiGesa, Elevate Security and Aircover. He’s also an active angel investor and adviser to companies including, among others, Stripe, Workato, Tenor (acquired by Google), Cursor Data (acquired by DataRobot), MindMeld (acquired by Cisco), Instawork, Tonal Fitness, Accord and Prairie Health.

Illustration: Dom Guzman

Video messaging startup and one-time unicorn Loom was bought for $975 million by collaborative software giant Atlassian. The San Francisco-based startup raised a $130 million Series C at a $1.5 billion valuation in May 2021 — so Atlassian’s price represents about a 35% decline from that value.

But that was a very different time, where venture capital funding was exploding and few things were hotter than tools that allow for better remote work. Since then, venture capital has slowed and remote work has lost some luster as workers have slowly crept back into offices.

Just about a year after announcing its Series C, Loom joined the long list of tech startups slashing their workforces — laying off 14% of its staff.

Still attractive

Nevertheless, Atlassian clearly sees value in Loom’s video solution.

“Async video is the next evolution of team collaboration, and teaming up with Loom helps distributed teams communicate in deeply human ways,” Mike Cannon-Brookes, co-founder and co-CEO of Atlassian, said in a statement announcing the deal.

Loom was backed by some big names in venture, including Andreessen Horowitz, Coatue, Sequoia Capital and Kleiner Perkins. The startup had raised nearly $204 million since being founded in 2016.

The deal is unlikely to wake up a somewhat sleepy M&A market. Through the first nine months of the year, only 629 deals involving U.S.-based, VC-backed startups being acquired were announced, per Crunchbase data. That compares to 919 deals for the first nine months of last year.

The Loom deal is expected to be completed in the first quarter of next year.

Further reading:

• AMD Snaps Up Nod.ai, Looks Poised For Bigger Deals Ahead

Illustration: Dom Guzman

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