Ecommerce is back in the top industries while Fintech once again takes the lead. Companies are joining forces to make some noise (Mastercard and Polygon, Discord and Gas). And Bing is about to be resurrected thanks to AI — with Google promptly retaliating with its own ChatGPT rival, Bard. Let the search engine battle begin.
Below are the month’s most notable news and numbers, including year-on-year (YoY) and month-to-month comparisons as well as leading industries and companies worthy of attention.
General Overview
This January, the total number of companies that raised funding was 870, compared to 1,013 in January of the previous year. This is a 14% YoY decrease. The total funding raised was $11.65 billion, with a 69% YoY decrease; in 2022, January clocked in at $37.21 billion. The median deal size was $6 million, a 6% YoY decrease compared to the $6.8 million in January of last year.
Leading Countries
*based on the number of companies that raised funding (not total funding)
1. USA — with 462 companies (16% YoY decrease), $7.55B in cumulative investment (69% YoY decrease) and a median deal size of $7M (26% YoY decrease)
2. UK — with 59 companies (10% YoY decrease), $894M in cumulative investment (45% YoY decrease) and a median deal size of $5M (22% YoY decrease)
3. India — (up one spot) with 49 companies (22% YoY decrease), $250M in cumulative investment (72% YoY decrease) and a median deal size of $3M (40% YoY decrease)
4. Canada — (down one spot) with 45 companies (21% YoY increase), $473M in cumulative investment (71% YoY decrease) and a median deal size of $3M (26% YoY decrease)
5. France — (new to list) with 24 companies (35% YoY decrease), $309M in cumulative investment (88% YoY decrease) and a median deal size of $5M (53% YoY decrease)
Conclusion: With the tech sector shakeup and top-performing countries suffering, it’s no wonder the total funding has gotten smaller by more than 3x compared to last year. As things evolve, France has kicked Germany from the top five chart. Let’s see for how long.
Leading Industries
1. Fintech (up one spot)
98 companies (26% YoY decrease), $1.59B in cumulative investment (62% YoY decrease) and a median deal size of $5M (40% YoY decrease).
The top 3 biggest funding rounds are attributed to PayEm (manages, automates and connects company spending processes in one place for full visibility and control) - $200M (total funding: $247M), Kiavi (tech platform that offers investment property loans for residential real estate investors) - $158M (total funding: $158M) and Xpansiv (ingests data sourced from the commodity lifecycle and converts it into intelligent commodities and digital assets) - $125M (total funding: $678.5M).
2. Biotech (down one spot)
89 companies (13% YoY increase), $2.3B in cumulative investment (45% YoY decrease) and a median deal size of $8M (60% YoY decrease).
The top 3 biggest funding rounds are attributed to Pliant Therapeutics (European fintech focused on providing end-to-end working capital solutions to businesses) - $250M (total funding: $657.4M), Geron (specializes in developing blood cancer treatments for hematologic malignancies) - $227.8M (total funding: $589.5M) and Asimov (employs AI to develop tools for the design and manufacture of next-gen therapeutics) - $175M (total funding: $205M).
3. AI
76 companies (31% YoY decrease), $916M in cumulative investment (43% YoY decrease) and a median deal size of $5.2M (59% YoY decrease).
The top 3 biggest funding rounds are attributed to Oxbotica (creating software for the next generation of autonomous vehicles) - $140M (total funding: $229.5M), DeepL (a leading deep learning company for language translation) - $100M (total funding: $100M) and Metagenomi (uses metagenomics and ML to discover novel genome editing systems for therapeutics development) - $100M (total funding: $457M).
4. Healthcare (up one spot)
68 companies (13% YoY increase), $922M in cumulative investment (44% YoY decrease) and a median deal size of $3.2M (54% YoY decrease).
The top 3 biggest funding rounds are attributed to Paradigm (achieves leading clinical and financial results for catastrophic and complex claims) - $203M (total funding: $203M), Perspectum (provides imaging solutions to help doctors in clinical decision-making and support patient engagement) - $37.4M (total funding: $101.6M) and Medix Infusion (a tech-enabled healthcare platform focused on improving patient care) - $35M (total funding: $35M).
5. Ecommerce (new)
52 companies (15% YoY decrease), $515M in cumulative investment (83% YoY decrease) and a median deal size of $5.3M (65% YoY decrease).
The top 3 biggest funding rounds are attributed to Otovo (marketplace for distributed energy installation) - $111.6M (total funding: $204.6M), Impel (digital engagement platform for vehicle retailers or every type and size) - $104M (total funding: $130M) and Go North (ecommerce aggregator operated by Amazon FBA entrepreneurs) - $53.7M (total funding: $69M).
Conclusion: Fintech returns to the top of the list, knocking down Biotech — which still has a larger funding amount. Ecommerce is back in the Top 5.
Monthly Highlights
Features Here, Features There…
- Spotify’s new time capsule feature will let users judge their previous year’s musical taste.
- Mastercard and Polygon are launching a web3-focused incubator for musicians.
- Discord acquired the Gas app, a teen hit that supports anonymous compliments.
- Apple’s mixed-reality headset should arrive this year — with an optional real-world view and an outward-facing display showing a user’s facial expressions. Only ~$3k!
- Apple’s MacBooks will feature M2 Pro and M2 Max chips, with 30% faster graphics than the M1 Pro chips.
- Twitter now offers an $84 annual subscription, with a 12% discount for Android users and 36% for iOS users — all to remedy a 35% YoY revenue drop in Q4.
- Twitter is applying for US regulatory licenses to introduce payments and get fresh revenues — part of Musk’s “super app” plan.
- Instagram’s new Quiet Mode lets users disable notifications and set up “away” messages.
- Wikipedia got its first design update in 10+ years.
- Netflix may be planning “paid sharing” by late March. Sharing your password with non-family? Get ready to pay.
- CES 2023 — missed it? TechCrunch has a nice recap.
- Meta is stopping advertisers from targeting teens by gender.
ChatGPT Awakens Sleeping Giant
- OpenAI (maker of AI tool ChatGPT) may be selling existing shares in a tender offer that would value the startup at $29 billion — despite generating minimal revenue.
- ChatGPT Plus, a paid version of its AI chatbot, has been released. For $20/month, users get unlimited messaging and faster responses.
- Microsoft may integrate ChatGPT into its Bing search engine and is investing $10 billion in OpenAI — securing 75% of OpenAI’s profits until recouped, then getting a 49% stake.
- Alphabet introduced Bard, its direct rival to ChatGPT (which has already made an error), soon after ChatGPT prompted Google to declare a “code red” for its search product.
- Google AI system MusicLM learned to compose music based on text descriptions.
It’s Raining Tech Pros
~100,000 workers in tech companies have been laid off this year. Last year’s total came to ~160,000 layoffs within public and private tech companies. 2021 saw only 15,000.
Some notable planned or in-progress layoffs include:
- Salesforce: 10% (~7,000 people)
- Amazon: 18,000+ roles (within robotics, grocery, health, AWS)
- Vimeo: 11% (after already cutting 6%)
- Coinbase: 20% (after already cutting 18%)
- Microsoft: 5% (~10,000 people by end of Q3 ’23)
- Alphabet: 6% (~12,000 people)
- Spotify: 6% (~600 people)
- PayPal: 7% (~2,000 people)
- Crypto.com: 20%
Apple has avoided major layoffs partly because its workforce only expanded by ~20% since 2019 — while Amazon doubled in size, Meta increased by 94%, Alphabet by 57% and Microsoft by 53%.
A Sprinkle of Good News
- Roblox stock surged after its daily active user count increased by 18% YoY in December, hitting 61.5 million. Engagement and estimated booking also increased.
- Netflix added 7.66 million subscribers in Q4, far more than the expected 4.57 million.
- Tesla reported record Q4 earnings of ~$3.7 billion, up 59% YoY.
Startups to Watch
($29M in latest funding) Welcome Homes is an online home-building platform that makes buying and designing new homes simple and more affordable. The funding will be used to develop its proprietary land technology, design new home models and enter non-US markets.
($10M in latest funding) Rive is a real-time interactive design tool that enables you to create, animate and instantly incorporate your assets into any platform. The funding will be used to launch the solution that helps creative teams with making animations.
($7.8M in latest funding) Personal AI is an AI-first messaging startup that uses AI to draft personal messages, retain and recall personal info, and unlock the potential of human-to-human chat capabilities. The funding will be used to accelerate growth and expand operations.
($6M in latest funding) StoryCo is an open media platform that enables creators and fans to co-create story franchises. Members need to acquire and activate an NFT called Disco Ball Storypass to participate. The funding will be used to accelerate company growth.
($2.6M in latest funding) Bounce is an event ticketing platform that allows you to discover events near you, purchase tickets and transfer money between friends. The funding reasons have not been disclosed.
