Tech startups in Seattle and the Pacific Northwest raised less than $4 billion in funding in the first half of 2022, down 20% from more than $5 billion in the first half of 2021, according to a new analysis from GeekWire’s list of startup financings.
The calculations confirm and quantify the impact of the economic slowdown on startups in the region. Angel investors and venture capitalists have tightened their belts and urged portfolio companies to extend their financial runways. This caution is fueling a wave of layoffs by tech companies.
GeekWire tracks technology financing deals in Washington, Oregon, Idaho and British Columbia as part of its reporting on startups in the Pacific Northwest.
More takeaways from the latest issues:
- The total number of funds fell to 138 in the first half of 2022, from 164 in the first half of 2021.
- By comparison, the total number of deals was 133 in the first half of 2020, at the start of the pandemic.
- Looking at just the second quarter of 2022, the total value of deals was $2.2 billion, up from $1.8 billion in the first quarter. However, that increase was largely due to some major deals (see list below).
- The total number of deals fell to 63 in the second quarter, from 75 in the first quarter.
Anecdotal evidence suggests similar trends nationally, but quarterly earnings from PitchBook/NVCA and CB Insights are typically not released until later in the month. The slowdown in the Pacific Northwest follows record venture capital numbers for the Seattle region and Washington state in 2021.
Top 10 deals in the Pacific NW for the second quarter, tracked by GeekWire:
- Group14 Technologies, battery technology, $400 million.
- Convoy, truck market, $260 million.
- Zap Energy, fusion energy, $160 million.
- Agility Robotics, warehouse robots, $150 million.
- Echodyne, high-tech radar, $135 million.
- SirionLabs, Lifecycle Management Contract, $85 million.
- ProfoundBio, anticancer drugs, $55 million.
- Flexe, on-demand storage, $67.9 million.
- Edge Delta, data analytics, $63 million.
- AccelByte, infrastructure for online games, $60 million.
A notable trend is the number of hardware companies at the top of the list. The region is traditionally better known for software, services and cloud technologies, but hardware development is often more capital intensive.