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San Diego Startup Funding Declines for Third Straight Quarter
Investments in San Diego County startups decreased by 35% in the second quarter compared to the same period last year, marking the third consecutive quarterly drop. Venture capitalists invested approximately $755 million in the three months ending June 30,according to a report by PitchBook and the National Venture Capital Association. This represents a meaningful slowdown compared to previous years, with only 58 venture capital deals inked, the lowest number as 2018.
However, San Diego is not alone in this trend. Major tech and biotech hubs like Chicago, San Jose, New York, and Boston have also seen funding declines of 25% to over 35% in the second quarter. Experts attribute this slowdown to economic uncertainty,tariffs,federal funding cuts,and a more selective investment habitat.
“Companies are staying private longer as the VC landscape continues to navigate a fragile recovery,” said Nizar Tarhuni, executive vice president of research and market intelligence at PitchBook.
experts emphasize the need for capital efficiency. Greg Bisconti, executive managing director for real estate firm JLL, notes that investors are being incredibly selective, signaling portfolio companies to “extend the runway” or treat this round as their last. mike krenn, managing director for Prebys Ventures, echoes this sentiment, stating that capital efficiency will be crucial for regional startups.
Despite the overall downturn, the life science sector remains strong, accounting for six of the top ten local deals. RayThera, a two-year-old San Diego biotech company, secured the largest investment of $110 million.
This article is for informational purposes only and does not constitute financial advice.
