Q2 2017 Posts Consistent Marks as VCs Continue to Place Larger Bets
Early results are in for Q2 2017, and we’re seeing the first quarterly uptick in NYC-based seed deals in the last six quarters. According to preliminary figures, Q2 saw 37 deals closed, pulling in $67.1MM in total funding. These numbers are up 6% and 16%, respectively, from what we reported at this time last quarter.
Additionally, Q2 data shows a continuation of the recent trend of larger seed deals - up 6% from Q1 - as average deal value has increased steadily over the past four quarters. With median deal value clocking in at $1.8MM, over 25% of this quarter’s deals fall into the $2.5MM-$3.5MM range, while only 11% fell below the $1MM mark. Knowing that venture funds have plenty of cash on hand from last year’s unprecedented run of fundraising ($41.6 billion in 2016) leaves us optimistic about the funding prospects for NYC’s seed-stage startups over the next few quarters.
The Primary NYC Seed Deal Report covers all NYC Seed deals - which we define as $250K-$3.5MM - that have been publicly announced in each quarter. Since we started tracking this data in Q1 2016, we have observed a predictable jump in deals that are reported well after the close of any given quarter. As such, we continue to revise our reports to reflect the latest data available. If you know of any deals that we’ve missed in this report, please contact us at firstname.lastname@example.org!
INDUSTRIES TO WATCH
Innovation persists amidst shaky healthcare politics
The quarter saw continued innovation in the healthcare industry, with deals announced for Blue Mesa Health and Spring Care, in addition to others - including our own investment in HLTH - that fall outside of our criteria for this NYC Seed Report due to the size of their seed round. So while HIT is certainly still alive and kicking at present, overall uncertainty around political maneuverings and policy changes may put a damper on the pace of innovation for startups that had built business plans based on the rules laid out in the Affordable Care Act.
AI for President!
AI continues to be the talk of the tech world, having seen a 5-year high in deals and dollars last year. AI has its hands in virtually all verticals, but this quarter it showed particular strength in B2B SaaS applications. Q2 saw interesting AI plays in Fintech (Agolo), healthcare (Spring Care), IoT (Reality AI) and retail (Claire).
Big data finds its place
All successful AI applications require a critical building block: data. Q2 saw some interesting deals focused specifically on data access. Stae raised money to improve access to city data from the increasing numbers of connected devices on city streets. Blissfully, meanwhile, focuses inward, pulling data from internal SaaS systems to give companies better insights into the technologies they are already using. And Accern monitors over 300 million websites and alerts institutional investors about early news on public companies.
Taking “hands-free” to new heights
Q2 saw one of the first deals in the emerging "voice" space, with Sayspring raising money to develop a platform for designing voice applications for Amazon Echo and Google Home. With tens of millions of these devices now deployed in homes and offices, as well as the recent announcement by Apple of a similar voice-enabled device, it seems clear that we are in the early innings of a new voice-powered ecosystem.
Fantasy sports forever!
While TV continues to be slowly obviated by social media and other video platforms as the new “real-time TV” for consumers, sports lovers continue to find ways of delivering content to the masses. Q2 saw funding to PLAAY Sports, an automated sports video editing company; RotoQL, an analytics platform for fantasy sports; and fantasy sports platform Boom Fantasy.
Expand your network
Q2 saw the emergence of a number of new networking and recruiting platforms, among them Ripple Recruiting and Paragon One. In light of the spate of unfortunate headlines this quarter highlighting persisting gender inequities and inappropriate treatment of women, especially in our own industry, it’s notable that a number of startups that received funding this quarter are focused on women’s advancement and fostering connections between women in the workplace. Women 2.0 connects female founders and investors for the purpose of sharing ideas and recruiting top talent, while Heartbeat pairs millennial women with brands to extend their reach.
Primary NYC Seed Deal Report: Q2 2017