Less than 1 in 3 startups manage to raise follow-on funding: Study

Illustration: Binay Sinha

A study by Venture Intelligence shows that less than one in three startups that attract seed funding have managed to raise additional funding in the form of a “Series A” round.

Of the more than 2,500 startups that raised seed funding between 2015 and 2022, only 29 percent (that’s 734 companies) managed to raise the first round of first round (usually the first round of institutional funding for venture capital), the study was titled “Series” is found on a horizontal report.

However, once a startup attracts an initial round of funding, its success rate for raising subsequent rounds of capital improves exponentially.

For example, 50 percent of the companies that raised a Series A during the study period successfully raised a Series B round. Among the startups that have attracted the second round, 62 percent have succeeded in getting through to the C round.

The study found that among Series C-funded companies, 70 percent were able to raise their Series D rounds and beyond.

The number of companies raising first round A rounds grew at a compound annual growth rate of 8 percent in the five-year period from 2017 to 2022. Despite the onset of a slowdown in funding in 2022, the number of Series A investments for the year (289) increased by 7 percent compared to 2021 (which saw 269 investments) and 30 percent higher than the average of 224 deals recorded in the last seven years.

– Jans

san / arm

(Only the title and image for this report may have been reworked by the Business Standard team; the rest of the content is generated automatically from a shared feed.)

First published: 03 Jun 2023 | 11:45 p.m ist