A few weeks ago, I wrote a post entitled the Barbell Financing market. I shared anecdotal data on the rise of pre-money valuations:
At the seed stage, caps greater than $10M aren’t uncommon. Series As routinely fetch $30M post-money. In the growth stage, it’s a seemingly weekly event for a $1B+ valuation financing.
Wilson Sonini released data yesterday quantifying the increases in median pre-money valuations their firm has observed. Series A valuations have increased by 88% 2 years; Series B valuations have increased by 33%; and growth valuations have increased by a staggering 333%.
As valuations have increased, check sizes have followed. Series A raises have remained flat. Series B raises have nearly doubled and growth rounds more than doubled.
This data buttresses the claim of a barbell financing market: As and Growth rounds have seen disproportionate and likely unsustainable increases in prices over the past 2 years. With many consumer IPOs losing upwards of 50% of their market cap since offering, it can’t be long until we observe a correction in growth rounds that trickles back to Series As and seeds.