The start of 2020 has been anything but typical, and we are all in a state of adjusting to this new normal. Even though nothing about this time feels standard, we are keeping with our tradition of looking back at the prior quarter and reporting on New York seed-stage investing trends.
The number of seed deals dropped 30% from Q3 to Q4 2019, but that trend did not continue this quarter, with seed deals increasing slightly. This is not taking into account the likelihood of some companies staying under the radar with fundraising news as we navigate this difficult period.
After total funding and the number of deals decreased in Q4 2019, Q1 saw total funding and the average round size (modestly) decline. With a decent amount of speculation about big dips, the impact perhaps wasn’t as drastic as anticipated. As we move forward in this environment, we will continue to monitor and report back.
Industries to Watch
In light of the economic impact that COVID-19 has had on the employment market, it’s great to see a slew of companies get funded to the tune of $6M+ that are looking to positively impact the future of people’s careers. These companies include Free Agency, as well as two other stealth cos from former WeWork, Loftsmart, and Twitter execs.
The media capital of the world is continuing to double down on podcasting and audio as a medium. Sounder.fm, a platform that makes it easier to create audio content, raised $1.8M while Podsights, a podcasting analytics company raised $1.5M. On the content side, Meet Cute, a romantic comedy podcast, raised $3M and hopes to follow in the steps of podcasting powerhouses, The Ringer and Barstool Sports, both of which were acquired in Q1.
Vending gets an upgrade
From 24-hour meat vending machine in upstate NY to that VC vest vending machine at SFO, vending is having its revitalization and these machines are not just serving up junk food. NY based Fresh Bowl raised $2.1M from VCs in Q1 to create a Pret A Manger-esque fresh food vending network that uses SMS marketing and eco-friendly glass bowls you return to the machine to drive impressive loyalty and low spoilage.
As SaaS continues to penetrate every industry with spending up nearly 50% compared to 2018, companies are finding it more difficult to manage their stack across teams. Enter companies like Glean Analytics, which helps analyze and reduce spend, and Tropic, which focuses on making it easier to buy the best piece of software on the market.
Adding to the Lore?
The Marc Lore Quidsi/Jet.com Mafia includes the founders of companies like Chief (private network for female executives), Primary (DTC kids clothing) and Eloquii (plus-sized fashion, acquired by Walmart). Fatma Collins and Julie Rogers, both formerly of Jet.com, are growing the Marc Lore founder tree after coming together to raise $2.63M for Ten Little, their modern, data-driven take on healthy shoes for children.
Solving big problems
What do drug discovery and bees have in common? Each acts as the foundation of a company focused on solving some of the world’s largest problems. OneThree Biotech, a Primary portfolio company, is redesigning drug discovery with biology driven AI. And Carverr is creating programmable molecules that will help agriculture and products (like honey) be tracked and authenticated across the world.
Primary NYC Seed Deal Report: Q1 2020
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