$100M Megarounds for US Startups Drop Two-Thirds from Peak

The record wave of venture capital that flowed to startups in the U.S. in the middle of the pandemic is looking more like an anomaly, with big-ticket megarounds of $100M dropping to their lowest level last year since 2020.

Series A through Series D rounds that raised $100M or more in 2023 for U.S.-based companies dropped to about 200 last year, from 2021′s total of nearly 600, according to Crunchbase data.

Artificial intelligence and sustainability initiatives dominated last year’s big-ticket rounds. Four of the top five rounds in 2023 involved AI players, including OpenAI’s $10B haul, two rounds that landed a total of $6B for Anthropic and a round for Inflection AI which raised $1.3B. Fintech firm Stripe also had a top-five round, raising $6.5B.

Lessen, a Scottsdale, AZ-based tech provider that helps U.S. landlords hire building contractors, was the lone proptech firm in the top 20 on the last year’s megarounds list. Lessen raised $500M, which it used to finance its acquisition of competitor SMS Assist.

The overall venture capital flow to the proptech sector dropped by 42% in 2023, to about $11B from the 2022 total of nearly $20B, according data from the Center for Real Estate Technology and Innovation (CRETI).

Compared to the 2021 peak for VC funding of proptech, which topped $32B, the drop in 2023 was 64%. According to CRETI, the pullback in VC funding represented a “recalibration” and “a return to pre-pandemic investment levels.”

In the first two months of this year, there have been more than 30 megarounds that raised $100M or more in VC funding, according to Crunchbase.

The latest is Magic AI, a San Francisco-based startup using artificial intelligence to automate software development. The company raised $117M in its latest round.

Magic AI, which has backing from Sequoia Capital, among others, is pursuing the development of artificial general intelligence. The coding assistant it is developing aims to compete with GitHub, a co-pilot Microsoft developed with OpenAI that says it now has 100M developers using its platform, and San Francisco-based Replit, which raised $95M in a Series B round last year.

Last month, San Francisco-based Flexport, a digital-oriented freight forwarder, announced that it raised $260M from Shopify as it aims to build an end-to-end logistics tech platform.

In addition to AI, sustainability and renewable energy startups, several biotech and gaming initiatives have drawn megarounds of more than $100M so far this year.