Editor’s note: Previously, we wrote about sectors where seed funding fell. We also looked at the state of seed-stage investment, including a trend toward larger seed rounds.
When forecasting which startup sectors are likely to attract big follow-on rounds, it’s helpful to find areas that are already seeing a lot of large initial ones. For this, we can look to seed funding tallies.
Even as overall seed-stage investment declined in 2024, a few areas saw big gains. This includes the obvious category — artificial intelligence — as well as a subset of sectors largely focused on automating things that humans currently do.
Below, we look at four top picks.
Robotics
Robotics isn’t the cheapest industry for building a new product. So when a newly minted startup does get funding, it’s often larger than a typical seed round.
This past year, examples abounded of companies in the space securing unusually large initial investments. One U.S. standout was San Francisco-based The Bot Co., a startup founded by former Cruise CEO Kyle Vogt that launched with $150 million in seed funding to further its vision of building robots to do household chores.
San Francisco-based Physical Intelligence, a developer of AI foundational models for robotics, was another investor favorite. It secured a $70 million seed round in March and a $400 million Series A in November. And China-based Galaxy General also had a good year, picking up a $95 million angel round in June, plus another $70 million in November.
Large seed rounds contributed to boosting overall seed-stage funding to the robotics space to just over $1 billion in 2024 1 — up a whopping 77% from a year ago. In addition, it helped that we’re seeing robust activity at the intersection of robotics and AI.
Moreover, the industry had a splashy year across stages in 2024, with several companies landing jumbo-sized rounds for humanoid robots.
Accounting, tax prep and bookkeeping
Robots are omnipresent in futuristic sci-fi movies. Automated bookkeeping, not so much.
But while it might not be the most cinematically appealing of innovations, intelligent software for accounting is certainly attracting attention from investors lately. Much of that is directed at the seed stage.
Per Crunchbase data, startups tied to accounting, bookkeeping and tax preparation picked up $143 million in seed funding in 2024. That’s an increase of 70% from the prior year and only slightly below the 2021 peak.
AI fueled the gains. This included the largest funding recipient, Light, a Danish startup offering an AI-powered general ledger for multinational companies that landed $13 million in June.
Among U.S. startups, two companies developing AI-enabled tools also snagged big rounds. Tola, a provider of billing management tools for businesses, landed $10.2 million in seed financing in October. Numeric, a provider of AI-enabled financial planning tools, secured $10 million in a May seed round, followed by a $28 million October Series A.
Legal tech
Legal tech is interesting as it’s one of the few areas where seed funding hasn’t really declined from 2021 boom-era levels.
In each of the past four years, legal and legal tech startups have raised between $170 million and $200 million globally. That’s a very steady range given that most industries have seen dramatic year-to-year fluctuations as cycles rise and wane.
Last year, in what should come as a surprise to no one, startups applying AI to legal tech were the standout seed funding recipients, with particularly strong gains in the U.S. Overall U.S. seed funding to legal tech hit $93 million in 2024 — up 37% year over year.
The largest U.S. funding recipient was Norm AI, a regulatory compliance platform that picked up $11 million in seed funding in January, followed by a $27 million Series A in June. Next was a $6.8 million seed round for Garden, a provider of tools for patent lawyers.
Artificial intelligence
We put artificial intelligence in the No. 4 slot not because it was the smallest, but because it was the most obvious category. Trend analysis tends to be more interesting when it begins with something you didn’t already know.
Nonetheless, it’s not like we could ignore AI either. After all, companies in Crunchbase’s AI-focused industry categories pulled in $7.6 billion in seed funding in 2024 — more than one-fourth of global investment at this stage.
Some of the largest rounds in the category were for the aforementioned AI robotics startups The Bot Co. and Physical Intelligence.
Other big seed deals for AI companies included a $142 million financing for EvolutionaryScale, a developer of biological artificial intelligence models for therapeutic design, and a $100 million round for Paris-based generative AI startup H Company.
The age of AGI
We look to seed funding trends not only for an idea of where future fortunes might be made but also for a sense of cultural vibe shifts. If the most ambitious and skilled entrepreneurs are putting their energies in a particular space, that says a lot about how they envision the future unfolding.
What we are seeing lately seems to indicate a big vibe shift. In particular, we’re seeing a marked change from the overarching direction of seed financings several years ago, where there was more emphasis on tools and services to make humans’ lives more pampered and comfortable. In the 2010s — the era that birthed many consumer-facing app unicorns — we saw the rise of giants such as Uber and Airbnb that accomplished these goals with a heavy reliance on human labor in the form of drivers and hosts.
These days, the focus seems increasingly on how to lessen our reliance on humans in the daily slog of getting things done. Robots will clean our houses, software will automate our bookkeeping and tax compliance, and AI will serve as our in-house research department.
Related Crunchbase Pro lists:
Related reading:
Illustration: Dom Guzman
Stay up to date with recent funding rounds, acquisitions, and more with the
Crunchbase Daily.
Source link
lol
