In 2023 so far, pounding out new features is the name of the game. Instagram, Microsoft, Apple Music, Amazon… all hustling for our unceasing love. AI and robots are infiltrating the software development industry and law enforcement (yep), layoffs refuse to just stop already and Twitter remains the symphony of chaos we’ve begrudgingly embraced as the new norm.
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.
2022 Recap
Before we dive into the funding results of this past month, let’s begin with a recap of the last year — in numbers.
2022 outperformed the previous year ($341.25 in 2021) despite the slowdown in the second half. The USA was the undisputed funding world champion and fintech held its ground at the top of the food chain, despite intensifying competition breathing down its neck.
We now return you to our regular programming.
General Overview
This December, the total number of companies that raised funding was 1,142, compared to 1,172 in December of the previous year. This is a 3% YoY decrease. The total funding raised was $20.08 billion, with a 41% YoY decrease; in 2021, December clocked in at $37.2 billion. The median deal size was $4.95 million, on par with the previous year.
Leading Countries
*based on the number of companies that raised funding (not total funding)
1. USA — with 522 companies (9% YoY decrease), $10.69B in cumulative investment (55% YoY decrease) and a median deal size of $6M (29% YoY decrease)
2. UK — with 90 companies (14% YoY increase), $2.11B in cumulative investment (73% YoY increase) and a median deal size of $3.29M (29% YoY decrease)
3. Canada — with 69 companies (50% YoY increase), $1.25B in cumulative investment (52% YoY decrease) and a median deal size of $3.12M (53% YoY decrease)
4. India — with 54 companies (24% YoY decrease), $305M in cumulative investment (79% YoY decrease) and a median deal size of $2.91M (71% YoY decrease)
5. Germany — with 44 companies (12% YoY decrease), $499M in cumulative investment (75% YoY decrease) and a median deal size of $6.37M (105% YoY increase)
Conclusion: Total funding decreased by almost 2x compared to 2021 with virtually the same number of companies. India suffered the most while the UK showed incredible resilience in tough times.
Leading Industries
1. Biotech (up two spots)
122 companies (39% YoY increase), $3.36B in cumulative investment (31% YoY decrease) and a median deal size of $10.72M (8% YoY decrease).
The top 3 biggest funding rounds are attributed to Madrigal Pharmaceuticals (develops therapeutics to help patients with metabolic and fatty liver diseases) - $259M (total funding: $397.4M), Replimune Group (develops the next generation of oncolytic immunotherapies for cancer treatment) - $225M (total funding: $512M) and Avidity Biosciences (biotech company developing oligonucleotide-based therapies) - $207M (total funding: $347.1M).
2. Fintech (down one spot)
116 companies (26% YoY decrease), $2.32B in cumulative investment (63% YoY decrease) and a median deal size of $5M (2% YoY increase).
The top 3 biggest funding rounds are attributed to Novicap (focused on providing end-to-end working capital solutions to businesses) - $211.1M (total funding: $214.1M), Allica Bank (delivers digital banking services for small and medium-sized businesses) - $121.9M (total funding: $404.4M) and Nesto (digital mortgage platform helping lenders improve and streamline operations) - $80M (total funding: $151.4M).
3. AI (down one spot)
99 companies (9% YoY increase), $1.16B in cumulative investment (43% YoY decrease) and a median deal size of $5.1M (15% YoY decrease).
The top 3 biggest funding rounds are attributed to Zappi (helps global brands make faster and better decisions to drive business growth) - $170M (total funding: $192.7M), CoreWeave (cloud provider that offers flexible compute resources) - $100M (total funding: $155.5M) and NotCo (The Not Company) (food tech company producing plant-based meat and dairy substitutes) - $70M (total funding: $433M).
4. Healthcare (up one spot)
72 companies (11% YoY increase), $922M in cumulative investment (12% YoY decrease) and a median deal size of $3.29M (38% YoY decrease).
The top 3 biggest funding rounds are attributed to Karyopharm Therapeutics (clinical-stage pharmaceutical company developing drugs for the treatment of cancer and other major diseases) - $165M (total funding: $546.7M), UpStream Care (primary care services and tech company providing physicians with support and systems) - $140M (total funding: $185M) and HistoSonics (developing non-invasive medical devices, interventional radiology and surgical robotics) - $85M (total funding: $226.8M).
5. Energy (new)
65 companies (110% YoY increase), $5.88B in cumulative investment (40% YoY increase) and a median deal size of $9.43M (10% YoY increase).
The top 3 biggest funding rounds are attributed to Danske Commodities (independent energy trading house) - $3.7B (total funding: $3.7B), Svante (carbon capture tech for capturing CO2 directly at its sources) - $318M (total funding: $474M) and Saudi Tabreed (offers cooling services through a wide range of energy-saving tech) - $250M (total funding: $264.6M).
Conclusion: With fintech dethroned, biotech is now on top — in line with our foreshadowing in previous reports. Energy made its first appearance on our list with an astonishing number of accumulated investments, representing almost 30% of December’s funding.
Monthly Highlights
Hot off the Press
- Instagram announced the anticipated BeReal clone, a “Group Profiles” feature. Its new “hacked” hub lets users report hacked accounts, while another feature will let users choose two friends for identity verification.
- Microsoft Teams launched Communities, a free feature for creating and facilitating groups. The move positions the company in closer competition with Discord.
- Apple Music’s Sing feature syncs lyrics with songs and lets users adjust original vocals.
- Amazon is TikTok-ifying it up with its new “Inspire” tab.
- Google is making an AI-powered tool to translate bad penmanship.
- Netflix began streaming 30 hours worth of Nike Training Club classes.
- Robinhood is moving into the individual retirement account game, offering a 1% match on every dollar contributed — and is calling this “an industry first.”
- Starbucks opened its blockchain-based loyalty program "Starbucks Odyssey" and its NFT community to the first set of beta testers.
On the Agenda
- San Francisco approved a policy that lets police use robots as a “deadly force option.”
- Tesla’s US EV market share is estimated to drop to less than 20% by 2025.
- Elon Musk’s Neuralink is planning to hold human clinical trials of its brain implant.
- Facebook Dating is testing face-scanning age verification, Adobe will sell AI-made stock images and Stack Overflow has temporarily banned ChatGPT-generated content.
- Influencers and brands are reconsidering their “flashing luxury” roles.
- Developers claim that using the AI coding assistant Copilot helped them be more productive. However, research shows that using AI may result in less secure code.
Bon Voyage
- DoorDash laid off 1,250 employees, Blue Apron laid off 10%, Kraken let go 1,100 employees, Plaid laid off 20% and Airtable said goodbye to its Chief Product Officer, Chief People Officer and Chief Revenue Officer.
- CNN slashed 200+ jobs, Paramount Global laid off ~30 employees, NPR cut $10+ million from its budget and froze hiring, and BuzzFeed announced a 12% reduction to its staff.
- Goldman Sachs is reportedly planning to lay off 8% of its staff. Morgan Stanley cut 2%.
- Slack CEO Stewart Butterfield is leaving Salesforce, which bought Slack for $27.7 billion.
- Oculus’ original CTO and co-creator of the DOOM game is leaving Meta to work on his AI company, saying that Meta has “a ridiculous amount of people and resources, but we constantly self-sabotage and squander effort.”
Twit-twit
- Twitter cut half of its Public Policy team. About 75% of employees have either chosen to leave or have been laid off since Elon Musk took over.
- An analyst for Twitter said that ad revenue in Europe is down 15% YoY and weekly bookings are down 49%.
- Apple, Twitter’s largest advertiser, has “fully resumed” advertising on Twitter.
- Twitter Blue will likely cost Apple users $11/mo. (up from $8) to offset App Store fees.
- Musk is reportedly looking for a new Twitter CEO following a poll in which 57.5% said he should step down. He also wants to change polls so only paying subscribers can vote.
News3
- Sales of VR headsets in the US dropped 2% YoY, a trend expected to continue.
- PayPal and MetaMask are uniting to make it easier to buy crypto.
- Meta purchased smart eyewear company Luxexcel to produce prescription AR glasses.
Binge This
- Netflix’s Preview Club is expanding from ~2k subscribers to tens of thousands.
- Netflix stock saw a 6%+ bump after analyst firm CFRA upgraded it from “Sell” to “Buy.”
- Netflix’s ad business is reportedly off to a slow start, in some cases reaching only ~80% of the expected audience viewership it guaranteed advertisers.
- Disney+ now has its ad-supported tier, meant to compete with Netflix.
Oopsy Daisy
- The Federal Trade Commission aims to block Microsoft’s $69 billion acquisition of Activision Blizzard.
- Elon Musk’s net worth of $128 billion means he’s no longer the world's richest person. With $164 billion, LVMH CEO Bernard Arnault has taken Musk’s place.
- Meta and Google are on track to represent less than half of US digital advertising spend (for the first time since ‘14).
- Theranos ex-COO (and founder Elizabeth Holmes’ ex) was sentenced to 13 years for defrauding investors.
Startups to Watch
($50M in latest funding) Runway is a next-generation video editing solution powered by machine learning that reduces the costs of creating visual media across creative industries. The funding will be used for broadening development of its robust suite of tools, incorporating an in-house creative agency and more.
($15M in latest funding) X1 manufactures a smart credit card made with 17 grams of sleek, stainless steel. The funding will be used to accelerate growth and roll out new financial services for its members, starting with a new investing platform allowing cardholders to buy stocks with their reward points.
($8.8M in latest funding) CLMBR offers a vertical climbing machine, featuring a large-format touch display with on-demand classes. The funding will be used for responsible growth goals and market expansion.
($5M in latest funding) Artifact is a platform for recording family stories via audio. Its interviewers conduct professional interviews with studio-quality edits. The funding will be used to accelerate growth and incorporate new features.
($2.4M in latest funding) Runna is a personalized running coach app that provides custom running programs for complete beginners up to those training for a marathon. The funding will be used to grow Runna’s product in the UK and the US.
