Venture capital funding to Seattle-area startups cools in first quarter amid larger U.S. slowdown

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After a stunning 2021 for venture capital investing, things are calming down a bit in the first quarter of 2022.

The latest Venture Monitor report from PitchBook and the National Venture Capital Association highlighted a “healthy recalibration period” for deals in the first quarter. Venture capital-backed U.S. companies raised nearly $71 billion in the quarter, down from $95.4 billion in the fourth quarter of last year, while exit value fell sharply to 33, $6 billion.

Even with the slowdown, the value of Q1 2022 deals still exceeded pre-2021 quarterly totals.

Rising interest rates, inflation and geopolitical uncertainty are contributing to the slowdown, the report notes. There is also the tendency for new companies backed by venture capital to see their market capitalization fall in recent months, which can affect 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 would have huge implications for startups.

But there are some differences between the current environment and the last technology-induced downturn in 2000 and 2001 in the United States,” said Ginger Chambless, managing director of JPMorgan Chase Commercial Banking, in the report. “Both should cushion any recoil.”

Seattle-area startups raised $1.5 billion in 112 deals in the first quarter. That’s down from $2.7 billion raised from 131 deals in the fourth quarter of 2021, but up from $1.2 billion from 94 deals the year before.

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. New unicorns were also born, including SeekOut and Temporal, which hit the billion-dollar milestone, joining a growing unicorn club in the Seattle area.

Here’s a look at the top 10 first quarter deals for businesses in the Seattle area. Check out all the recent deals on GeekWire’s funding tracker.

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