DC venture capital is still hot. These 5 companies raised the most in Q4 2023

2023 was a tricky year for startup founders looking to raise venture capital, with uncertainty caused by factors ranging from Silicon Valley Bank’s collapse to a heightened cost of doing business across the United States. Amid that uncertainty, though, the DC region saw one of its strongest investment years yet.

According to the latest Venture Monitor report, released quarterly by PitchBook and the National Venture Capital Association (NVCA), companies from DC and the surrounding suburbs raised $2 billion across 58 deals in Q4.

That’s more than two and a half times the deal value total recorded in Q3 or Q1, and a 36% increase from Q2. It also marked a whopping 250% jump from the last quarter of 2022, which saw the lowest total in nearly a decade.

The region raised nearly $5 billion across all four quarters of 2023, compared to about $4.5 billion raised in 2022, $5.9 billion raised in the globally gangbusters 2021, and $3.06 billion raised in 2020.

Of Q4’s numbers, 20 deals came from companies in DC proper, accounting for $1.4 billion. Maryland had 45 deals this quarter, adding up to $595 million, and Virginia claimed $270 million across 43 deals — though those numbers include the areas outside of the DMV region.

(As always, it’s important to note: These figures may vary slightly after publication, as some deals aren’t accounted for until weeks after quarterly VC reports are published, or PitchBook may find errors in its data.)

Significant this quarter? Same as last quarter: Powerhouse deals can have a big impact. If you count e-cigarette maker JUUL as a DC-based company, which PitchBook does (despite a significant presence in San Francisco and Los Angeles), then its $1.27 billion raise in November accounted for nearly two-thirds of the total regional dollars brought in.

DC’s biggest venture capital deals in Q4 2023

The top regional deals went to companies working in industries including information services, energy and consumer products. Here are the five largest, according to PitchBook data:

1. JUUL’s $1.27 billion, later-stage mega deal came just a few months after it laid off 250 people to cut costs.
2. Rockville, Maryland-based nuclear energy company X-energy nabbed another $80 million for a Series C that now totals $235 million. This latest investment came from Ares Management Corp., the firm that planned to take the company public via a SPAC merger with one of its subsidiaries until the previous month. An X-energy rep told Technical.ly the company terminated the SPAC deal plans because of “challenging market conditions.”
3. Roadside assistance app developer Urgently raised an $84.7 million later-stage round in October. The Vienna, Virginia-based company previously raised $75 million in debt financing in late 2021.
4. DC-based Adlumin raised a $70 million Series B in October. The managed security firm was also named DC’s Tech Company of the Year in the 2023 Technical.ly Awards.
5. Bethesda, Maryland’s StayNTouch raised $48 million in later-stage venture funding in December. The software company that makes a hotel management platform also raised $18 million in Q4 2022.

National venture capital trends

DC’s trends bear out nationally, too. The US saw about $170.6 billion invested across 13,608 deals in 2023. This represents a dip from the record highs of 2021 and 2022 — but the year’s nation-wide figures are nearly identical to those of 2020, which continued an ascending trend over the previous decade.

Factors affecting the post-pandemic venture capital market included global warfare (aka uncertain markets), Silicon Valley Bank’s March collapse affecting scores of tech startups, and still-high interest rates, which made borrowing money more expensive (though cuts are reportedly coming). Yet even with fewer deals and lower overall deal value, VC pros are optimistic about 2024, thanks in part to fast-growing, in-demand technical industries like artificial intelligence.

“2023 ended with fewer deals and less capital invested than 2022; that is obvious,” NVCA President and CEO Bobby Franklin wrote in the Venture Monitor report’s intro. “However, the industry is extremely well capitalized, and advances in AI, life sciences, and clean tech are all attracting significant levels of public and private investment. Furthermore, a tremendous need exists for new capacity in fields like manufacturing and materials processing to de-risk existing supply chains and power the green transition.

“The world has changed,” Franklin said, “and it is up to America’s VC community to make sure those changes leave the world better off.”