After a mind-boggling 2021 for venture capital investing, things are settling down a bit through the first quarter of 2022.
The latest Venture Monitor report from PitchBook and the National Venture Capital Association highlighted a “healthy recalibration period” for dealmaking in Q1. U.S. venture-backed companies raised nearly $71 billion during the quarter, down from a whopping $95.4 billion in Q4 of last year, while exit value dropped considerably to $33.6 billion.
Even with the slowdown, Q1 2022 deal value still exceeded pre-2021 quarterly totals.
Rising interest rates, inflation, and geopolitical uncertainty are contributing to the slowdown, the report noted. There’s also the trend of newly minted VC-backed companies seeing their market capitalizations drop in recent months, which can trickle down to venture capital.
In a guest post for GeekWire published in January, Seattle tech vet and angel investor Charles Fitzgerald warned founders that a reset in capital flows and valuations will have huge implications for startups.
But there are a few differences between the current environment and the last tech-led downturn in 2000 and 2001. “Generally sounder business models with greater traction, and significantly more dry powder to support portfolio companies —roughly $230 billion of traditional VC on the sidelines in the U.S.,” Ginger Chambless, managing director at JPMorgan Chase Commercial Banking, said in the report. “Both should cushion any pullback.”
Seattle-area startups raised $1.5 billion across 112 deals in the first quarter. That’s down from $2.7 billion raised over 131 deals in Q4 of 2021, but up from $1.2 billion over 94 deals in the year-ago period.
There were a handful of megarounds for fast-growing companies, including a $248 million round for sales software startup Highspot, and a $140 million round for e-commerce software startup Fabric. There were also new unicorns birthed, including SeekOut and Temporal, which reached the $1 billion valuation milestone, joining a growing unicorn club in the Seattle region.
Here’s a look at the top 10 deals in Q1 for Seattle-area companies. See all recent deals at GeekWire’s fundings tracker.