North American startup funding remained robust in the third quarter, driven by a strong interest in artificial intelligence. Investors contributed $63.1 billion to seed through growth-stage rounds for U.S. and Canadian companies, a slight increase from the previous quarter and significantly higher than the same period last year, with over $20 billion more in funding.
The elevated funding level was due to larger rounds, rather than an increase in the number of deals. In Q3, 2,276 rounds were reported, slightly fewer than the previous quarter and significantly below last year’s figures. Deal counts were down across all stages except for later-stage investments.
AI-related companies received a substantial portion of the funding, with 57% of all North American investments directed towards this sector. The largest round was a $13 billion Series F for Anthropic, accounting for over a fifth of the total startup investment in the region.
There was also notable activity in early-stage funding, with an increase in average round sizes. Series A and B companies raised $15.6 billion, the highest in the past five quarters, despite a decrease in the number of deals. Commonwealth Fusion Systems secured the largest early-stage round with $863 million in Series B2 funding.
Seed investment saw a decline, with $4.6 billion raised in Q3, down 25% from the previous quarter. However, some significant seed deals occurred, such as Periodic Labs’ $300 million initial funding.
AI startups attracted $35.7 billion in investments, consistent with the previous quarter and nearly double the amount from the same period last year. Exit activity was also strong, highlighted by Figma’s IPO, which saw shares triple in initial trading before stabilizing.
Overall, while some sectors like biotech and cleantech face challenges, the general trend in investment remains upward, particularly for AI-focused startups.
