Today's VC Industry Trends looks into venture funding for US-based manufacturing startups.
All figures are derived from Crunchbase data, and all graphs are my own.
After peaking comparatively early in mid-2014 and then recovering in late-2018, the incidence of rounds in this sector has collapsed to its lowest level since early-2017. Prior to that later crevice, the local nadir was in early-2012, indicating a circa four-year pattern. Whether the crunch would have occurred without the pandemic is not apparent from the numbers alone. The aggregate average round has reached parity last quarter with the previous high point, which occurred in Q1'18 at around $35M.
Mid-stage funding took a substantial hit in the last few months, with series A dollars coming in at about 25% of what their total in 2018. After slimming down in 2019, series B's dollar volume has picked up again and is now hitting numbers similar to early 2018. Though no longer at its 2018 peak, seed funding has been remarkably stable since it grew to its current levels in late-2015. Compared with other segments I have looked at, the presence of pre-seed funding is distinctly muted.
Late-stage funding entered this segment in a big way in 2017, and while it has been dampened somewhat, it is still funneling a large amount of capital to startups. With the exception of the year starting in Q3'18, wherein stages G through J posted strong numbers, the most reliable sources of funding have been series C and series D.
As noted above, the presence of pre-seed rounds is minimal for manufacturing startups. The collapse in the number of funding rounds appears to be distinctly situated in the seed stage. The last such collapse occurred in early 2017.
Seed rounds have not grown in size to compensate for their reduced incidence. Series A rounds have, on the other hand, seen their average round continue its aggregate upwards trajectory. The average dollar amount for a series B round has also continued growing, though to a lesser extent.
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