Reviewing old seed funding data is a lot like going into the past to see what people thought the future would look like.
In this case, we’re not going back to the distant past. Instead, we’re looking roughly 10 years ago, amid the waning days of the Obama presidency. In the startup world, it was a time when Uber turned heads with a then-staggering $40 billion valuation, and Alibaba was the smash hit of the IPO market.
Turns out investors and founders alike are heavily influenced by the success stories around them. Both today and 10 years ago, we see their impact in the seed-funding arena.
Marketplaces and consumer platforms
So what did we see then? Marketplaces were a big seed funding trend in 2015. More than 400 companies with the word “marketplace” in their Crunchbase profile raised seed capital that year. Scalable, consumer-facing platforms were de rigeur.
The funding pipeline 10 years ago also reflected confidence in the ability of startups to disrupt entire industries as well as restructure our approach to day-to-day tasks. We see this in areas from insurance to school transport to cannabis delivery, and even planning dinner.
Autonomous driving was another big theme. The period gave rise to a good-sized class of companies that have mostly struggled or flopped, although a broader push for driverless vehicles remains very much alive.
To help illustrate the mindset of seed investors a decade ago, we put together a curated list of some of the period’s largest seed-funding recipients. Most have long since flopped but a few are still recognizable names.
OpenAI is the big success story
Looking back, it’s obvious that the runaway success story among companies launched 10 years ago is OpenAI.
With its addictive ChatGPT app, a post-money valuation of $300 billion, and the recent announcement of the largest funding round in venture history, it’s clear, in hindsight, that OpenAI was the company every seed investor should have backed.
But at the time, of course, it was far from a no-brainer. Certainly there was attention. OpenAI publicly launched in late 2015 with a star roster of AI experts, along with Sam Altman and Elon Musk as co-chairmen.
However, the startup was also a nonprofit, so presumably few envisioned the path it would later take. In fact, OpenAI openly discouraged such thinking, asserting in its launch announcement that: “Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”
Times change.
Then and now
Looking at seed investment trends of the past year, by contrast, AI is of course the dominant funding theme. Since generative AI pioneers are later-stage now, top recent seed recipients tend to be applying AI to more specialized niches in areas such as biotech, robotics and enterprise software.
Per Crunchbase data, roughly 40% of U.S. seed funding over the past year has gone to companies in AI-related industry categories. That pencils out to nearly $5 billion across more than 1,300 deals.
It’s a big number, and also underscores how the size of seed funding rounds has trended upward over time. Back in 2015, there were just four seed rounds of $25 million. This past year, there were more than 10x that number. That includes nine-figure seed rounds for hot startups including Lila Sciences and The Bot Co.
Maybe in another 10 years, we’ll take a look back and see how these big seed-stage bets have performed. Looking at how the startup pipeline is shaping up, however, if things go the way investors would like, there’s a strong chance it’ll be an AI bot putting together this analysis.
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Illustration: Dom Guzman
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