The Great Reemergence and a Record-Breaking Quarter for Seed Deals in New York
As New Yorkers are experiencing the thrills of getting back into the city, markets are sharing the exuberance. We’ve never seen anything close to this many seed deals in the New York metropolitan area.
Since we started pulling these quarterly numbers in 2019, the typical number of seed deals in these reports has averaged out to 57. In Q2 of 2021, we saw 127 seed deals. That’s a 98% increase from just last quarter, and it’s a 176% increase since this time last year. Total funding, surprising no one, similarly ballooned 118% and 170%, respectively. The total seed funding in New York City this past quarter topped $350 million.
Checks at the upper end of our range — $2.5 to $6 million — accounted for 59% of this quarter’s deals, up from 50% last quarter but on par with this time last year.
This is, of course, part of much larger trends. Global deals of all sizes hit all-time highs in the first half of 2021, with 28,000 investments totaling over $2.82 trillion, according to Refinitiv. And as Axios reports, those respective 27% and 132% year-over-year increases are the result of cheap debt, corporate cash, private equity, Biden tax pledges, and a bull public equities market.
In this quarter’s Seed Report, pulled from Crunchbase, PitchBook, and our own knowledge of deals, we saw a continuation and amplification of some long-standing trends.
Fintech remains a key sector for the city: Asset-management-for-art infrastructure Lobus raised $6 million, Forte raised $5 million to rethink reskilling (super relevant following pandemic layoffs and The Great Resignation), Waffle raised $5 million to create customizable insurance plans, and Jet Protocol puts lending on the blockchain, now boosted with a $4.8 million seed round.
Health, too, has been and remains big. $6 million went to DUOS’ virtual assistance for older adults. $5 million deals went toward Inspiren’s patient-monitoring system, Aloe’s medical alert system, and Choosing Therapy.
But there are lots of emerging and more specific trends in the data, too. Read on for our team’s takes and additional company shoutouts.
While human beings all over experienced more than a year of minimal IRL social contact, entrepreneurs were heads down building tools to support a basic human need — community. From NY Knicks fan (and recent Miami transplant) Alex Taub’s $2.7 million seed round for Upstream to the green thumb plant care application Greg pulling in $5.4 million from Index and First Round, community-oriented companies have been a hot topic in Partner meetings around the big apple. Add in the powerful, immersive video chat experience that Kumospace introduced to the world in Q2 with $3 million of backing from Boldstart, Eniac, and Lightspeed, and you can see why it doesn’t require much imagination to be bullish on the future of nextgen community platforms.
Coming off an explosive year in healthtech, the tailwinds of an aging population in the United States and more patient-focused care models powered healthcare funding in New York during Q2. DUOS virtual assistance for older adults raised $6 million to help seniors keep it moving in their daily lives. Aloe Care Health and Choosing Therapy each raised $5 million to leverage digital tools to facilitate better engagement and communication with elderly adults. Ruby raised $2.9 million to meet the need and desire for seniors to age at home and Rejoy Health raised $1.2 million to treat and manage back and joint pains.
On the care side, women’s health has been a focal point for venture funding in the last quarter. Kindra raised $4.5 million and Elektra Health raised $3.7 million to help women manage menopause, relieve their symptoms, and “tackle the menopause taboo for women,” while Poppy Seed Health raised $1.6 million to enable mothers and mothers-to-be to receive emotional and bodily consolation throughout and after their pregnancy.
There’s never been a better time for ecommerce owners to better understand or reach their customers than now. We’ve been seeing more tools than ever to help brands and are excited to see the next evolution of ecommerce tech happening in NYC. For example, Paloma raised $4 million to help brands reach customers through Facebook and Instagram messenger, creating more personalized shopping experiences. On the supply chain side, ShelfLife raised $3 million to help food and beverage brands receive a consolidated view of their products, costs, and suppliers. Lastly, on the commerce infrastructure end, Weav raised $4.5 million to help aggregate and standardize sales, inventory, and other account data across platforms and develop insights to power different financial service tools.
COVID made us rethink the value of a traditional education and ask whether we should supplement or replace learning in the classroom with other form factors. Personalization and continuing ed are two big themes in the category, and there are a handful of startups capitalizing on these trends. Bonsai raised $3 million to help connect professionals with industry executives for networking. Realworld raised $3.4 million to educate young people as they transition into adulthood. Moth + Flame raised just over $2.5 million to bring VR into workplace trainings. All these companies recognize that people still need to learn even when they’re not in school. Additionally, ChalkTalk raised $3 million to offer personalized learning paths for students, betting on students’ need to supplement traditional education with something more specific to them.
“Software is eating the world” was penned in 2011 by Marc Andreessen. With each year that goes by, the things we considered impossible a few decades ago are sprouting right in front of our eyes. A large part of the fuel behind these massive changes in industry are developers, and we have recently seen incredible efforts to improve their workflows and tools. AtomicJar raised $4 million to build tools that developers love and change automated testing for the better. Authzed raised $3.9 million to store, compute, and validate application permissions more easily. Acelab raised $3.5 million to improve the quality and performance of building products and Charm raised $3 million to give the command line a facelift. Their thesis is to make writing code attractive.
Were there deals we missed? Are you getting ready to do your own early-stage fundraise? Feel free to get in touch with one of the team members linked above.