Tracxn, a leading global SaaS-based market intelligence platform, has released its Geo Quarterly Report: US Tech - Q1 2023. The report, based on Tracxn’s extensive database, provides insights into the US Tech space.

The US Tech landscape witnessed its lowest funding in the past three years in Q4 2022, while Q4 2021 was the highest funded quarter in the past decade. A slight boost in funding was observed in Q1 2023, providing a positive start to the year.

Startups in the US Tech space raised a total of $38.4 billion in Q1 2023, a sharp drop of 44% from $68.2 billion in Q1 2022. However, this is a 26% growth from investments worth $30.5 billion raised in Q4 2022.

This uptick is largely due to a 64% jump in late-stage investments from $15.4 billion in Q4 2022 to $25.3 billion in Q1 2023. Early-stage funding worth $11.5 billion was recorded in the first quarter of 2023, a fall of 12% and 51% when compared with Q4 2022 and Q1 2022 respectively. Seed-stage funding has been on a downward trend, consistently falling by more than 10% for the past four quarters. Seed-stage funding also decreased by 43% when compared with Q1 2022, and fell from $2 billion in Q4 2022 to $1.6 billion in Q1 2023.

Enterprise Applications, FinTech and Life Sciences were the top funded segments in Q1 2023. Companies in the Enterprise Applications space raised $20.4 billion in Q1 of 2023, 63% higher than the Q4 2022. In the first three months of 2023, FinTech companies recorded investments worth $10 billion in Q1 2023, 59% higher than Q4 2022 but a drop of 34% from Q1 2022.

Average ticket size has risen by 41% in Q1 2023 compared to Q4 2022 but it is 11% lower than the average ticket size in the same quarter last year. In Q1 2023, the number of $100 million+ rounds recorded was 59, of which seven companies raised over $500 million.

The US Tech ecosystem witnessed 413 acquisitions in the first quarter of 2023, a decline of 14% from 471 acquisitions in Q4 2022. This space also observed eight unicorns and nine IPOs in the first three months of 2023.

Among US cities, San Francisco takes the lead in terms of funding, with $19.8 billion raised in Q1 2023. This is followed by companies based in New York City ($2.9 billion) and Boston ($864 million).

Y Combinator, New Enterprise Associates and Techstars are the overall most active investors in the US Tech ecosystem. Y Combinator, Techstars and Andreessen Horowitz were the top seed-stage investors in Q1 2023. Sequoia Capital, Google Ventures and General Catalyst Partners are the top early-stage investors during the quarter, while Geodesic Capital, Glynn Capital and Harmony Partners were the top seed stage investors in Q1 2023.

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