Carta: Every fifth investment round in 2023 is a Down Round!

Another report reveals the difficulties startups faced in attracting investment in 2023. This time, the Carta service has revealed the down-rounds figures.

A down round is an investment round in which the company’s valuation decreases compared to the previous one. That is, companies are forced to raise funds on deteriorated terms, but these are the realities of the market: take the money or die.

The chart shows that companies at later stages of development have been disproportionately affected by this trend. As a rule, their valuation has fallen by a larger percentage.

Experts disagree on how to interpret the drop in company valuations. Some see it as a market problem, while others see it as a path to recovery. Carta is inclined to the second opinion.