A single midsize seed round doesn’t reveal much about what’s trending as the hot emerging area for startup innovation. Looking across hundreds of financings, however, one forms a clearer image about where the hotspots are clustering.
That was the intent of our latest Crunchbase News data dive into seed-stage trends. For this installment, we focused on mid-sized rounds of between $5 million and $10 million, analyzing around 800 global seed financings that closed this year.
Why this range? In a startup investment climate characterized by the ascendance of megarounds, the idea was to focus on rounds more representative of the classic seed deal: a risky bet on unproven founders, technologies or business models.
Using this methodology we identified multiple popular investment themes and zeroed in on five. The first — cybersecurity — we tackled in a separate piece. Here we delve into the other four: proptech, cancer therapeutics, space tech and robotics.
No. 1: Proptech
Real estate is the world’s most valuable asset class, providing startups a huge and varied addressable market. By one McKinsey & Company estimate published a few years ago, real estate accounted for a staggering two-thirds of global net worth.
Given the size of the space, actual venture investment tied to real estate and construction looks comparatively meager. Last year, per Crunchbase analysis, proptech startup investment totaled just over $10 billion, far below peaks hit several years ago.
Seed investors seem to believe there’s a good case for startup driven growth ahead. In particular, they’re funding a lot of rounds in the $5 million to $10 million range for companies looking to add efficiencies to the planning and building process, streamline rental operations, reduce building power consumption, and more.
To illustrate, below we put together a sample set of 15 companies that closed seed rounds in our target range this year:
A few standouts include Hint, an AI-powered home management system, Optiml, a developer of software to support real estate decarbonization, and Krane, an AI-enabled construction supply chain platform.
No. 2: Cancer treatments
Startup founders don’t need persuasive superpowers to convince investors that cancer is a sufficiently serious area to address. Today, it’s estimated that 39% of Americans will be diagnosed with cancer at some point in their lives. Cancer also ranks as the second leading cause of death, behind heart disease.
Seed-stage companies aren’t expected to bring down numbers in the near term, but as they progress, it’s increasingly plausible. That’s the apparent mindset for investors at this stage, who’ve backed a good-sized number of rounds in the $5 million to $10 million range this year for developers of cancer therapeutics and diagnostics, charted below:
Three California startups secured $10 million, the largest financing in our sample set. They include: Rybodyn, which is working on AI-driven discovery of undetected cancer targets, Vivere Oncotherapies, a developer of targeted therapies for solid tumors, and Valius Sciences, which is focused on cancer diagnostics.
No. 3: Space and satellite tech
This year’s most attention-getting event in space tech finance was obviously the IPO of sector pioneer SpaceX. But while that debut may have dominated headlines, quite a few smaller, earlier, lower-profile deals were also getting done.
Per Crunchbase data, space tech was a popular area for seed financings in the $5 million to $10 million range. To illustrate, below we put together a sample set of nine such companies that raised rounds this year:
The largest fundraiser in our target range was Lux Aeterna, which is focused on developing reusable satellites. Next was InSpacePropulsion Technologies, focused, as its name implies, on in-space propulsion systems, followed by Constellation Space, developer of an ML-native operations platform for satellite fleets.
No. 4: Robotics
Robotics is a perennial favorite in our seed-funding data dives, including the last one, focused on AI. This time, the sector made the ranking again, thanks to a bevy of intriguing seed-stage companies that met our parameters.
Turns out, you can jumpstart some highly ambitious ventures on a $5 million to $10 million seed round. To illustrate, below we aggregated a sample of 18 funded this year:
Robotics was also the most geographically dispersed sector in our lineup, with startups hailing from Asia, North America, Europe and Australia. A few that stood out include Somnia Lab, a developer of what it calls “intimacy robots,” Bubble Robotics, a maker of autonomous underwater robots, and Eternal.ag, focused on robots for greenhouse harvesting.
Big picture: Midsized seed rounds for outsized ambitions
Overall, seed funding trends reviewed above may tell us more about the kinds of companies investors are willing to bet on than about the sectors attracting interest, which are already well-established.
Clearly, startup investors still believe that small, modestly funded teams with grand missions remain a worthwhile and viable wager. That’s particularly encouraging these days, when the venture and seed financings we most commonly hear about tend to be the largest ones.
That’s not to diss large rounds. Startups that are led by prominent serial entrepreneurs or have established traction hold obvious appeal, even at pricier terms. But for those of us who enjoy rooting for the underdog, it’s encouraging to see lower-profile companies with outsized ambitions are still in the game.
Related Crunchbase lists:
Related reading:
Illustration: Dom Guzman
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