Another Record-Breaking Quarter for Seed Deals in New York City
With overall market pressures intensifying, we keep waiting for the shoe to drop on seed deals. It sure didn’t happen in Q2.
Despite global VC funding dropping 26% quarter over quarter in Q2, in New York City, total funding increased by 15.9%, to $866 million across 201 deals. Once again a record breaker in terms of both total value and number of deals.
The NYC seed environment is heating up with a 7.49% increase in number of seed deals since Q1 and a 58.27% increase year over year. In terms of total value, this quarter’s $866 million represents a 144% increase year over year. (Though as a reminder, we increased the size of deals we analyzed at the beginning of 2022 to reflect what seem to be lasting new norms for seed deal sizes.)
HCIT and Consumer startups raked in the most deals this quarter, with fintech and web3 showing a strong presence.
As the digital healthcare ecosystem grows, so does the patient data it creates, and the challenges of effectively managing and utilizing that data become even more pronounced. In response, Q2 saw companies looking to bridge data gaps in healthcare and/or apply AI to simplify the data comprehension process, to improve care delivery, drive innovation, and expedite product development cycles. Briya, a blockchain-based data platform intended to provide data exchange solutions for medical innovation, raised $5.5 million from Amiti Ventures and Insight Partners. Capable Health, a developer platform to build digital health experiences more efficiently, raised $6 million from Able Partners, AlleyCorp, and M13. And last but not least, Isabl, which uses rapid whole-genome sequencing that simulates which cancer treatments will be effective, raised $3 million from Box 1, Evolution VC Partners, Milad Alucozai, Sand Hill Angels, Two Sigma Ventures, and Y Combinator.
Staying true to its community-focused roots, Web3 continues to produce startups relentlessly focused on engaging community as a lever for improved user experiences and retention. Web3 provides an opportunity for creators to engage their fandoms with rich digital experiences creating a new level of connectedness. Fans want access; Web3 provides just that. Medallion, a blockchain-based platform, is helping artists engage and monetize their fandom through digital worlds, goods, and communities. In a round led by The Chernin Group, Medallion raised $9 million to allow artists to fully own the fan experience through its white-labeled product. Looking to eliminate ticket scalpers and improve concert goers experience, Yellowheart has raised a $7M round led by Adam Alpert and Live Nation Entertainment to transform tickets into interactive NFTs. Kaleidoco, a mixed reality platform, raised $7M round led by to build community-based experiences merging Web3, AR, and in-real-life experiences with backers including Adit Ventures, Animoca brands, GameFi Ventures, Gemini and others.
Q2 continued to demonstrate that healthcare founders and VCs have taken the "healthcare is personal" motto to heart. We continued to see investments in delivering customized, personalized care across a variety of different areas of healthcare—fitness coaching, women's health, senior health, and more. Whether through wearables, health surveys, or lab results, companies are translating personalized inputs into customized care plans, 1:1 coaching, recommended products, and delivering these services via in-person or virtual modalities based on the consumer’s preferences. The focus on "community health" or "population health" businesses seems to have waned a bit, as the pandemic accelerated consumers’ interest in personalized care delivered in the modalities they want. Exemplifying this trend, Conceive, a fertility platform focused on helping women conceive, uses 1:1 coaching, peer support groups, and a personalized care plan and raised $3.7 million from Founder Collective, Great Oaks Venture Capital, Kindred Ventures, and Myelin VC. Sage, a digital health advisor focused on personalized care coordination, refines suggestions based on wearables, messaging data, raised $8.9 million from Commonwealth Fund, The Gordon & Betty Moore Foundation and Gravity Tank. Adding one more to the trend, Kins, developing hybrid personalized physical therapy services, raised $4 million from Redesign Health and W Ventures.
The dev tools space has been hot for years, as developers have been empowered to experiment with new technologies and stitch together new data stacks from scratch. Now, developer superpowers are being democratized, enabling business and data analysts to perform tasks previously reserved for software engineers. PreQL raised a $7 million seed round from Bessemer and Felicis, among others, to build a KPI management solution for business users without the need for SQL. Additionally, Workstream raised a $7 million seed round from Lerer Hippeau to build a data analytics platform to help empower all users in an organization to make better decisions. Other notable software infrastructure investments from this quarter included Mintlify, which is building backend for documentation, and Trinsic, which builds infrastructure for developing identity products. Mintlify raised a $2.8 million seed round led by Bain Capital Ventures, while Trinsic raised an $8.5 million seed round from Georgian, Osage Venture Partners, Forward Venture Capital, and others.
Coming off a recordly attended NFT NYC, the city continues to play a dominant role in the development of Web3 with many startups developing tools to build out the infrastructure for players in the space.
Transpose, a startup building out a suite of APIs that provides enterprise-grade access to high-level, human readable data across the web3 stack, raised a $3 million seed round led by MaC Venture Capital. ComputeCoin, a geo-distributed computing platform that facilitates all-purpose Web3 and Metaverse services, raised $6.2 million from Aves Lair. Novel, a low code platform for NFT commerce with a Shopify App raised $6 million led by Lerer Hippeau and VaynerFund. Dialect, a smart messaging protocol that powers seamless, on-chain messaging experiences, raised a $4.1 million seed round co-led by Multicoin Capital and Jump Crypto. NYC startups are at the fordrunt of building tools necessary to accelerate mainstream web3 adoption.
