In 2021, it felt like every startup was able to raise at an inflated valuation no matter its size, sector or underlying business model. Today, things look a lot different.

Comparing pre-money valuations, every startup fundraising stage except seed saw median valuations decline last year compared to 2022, according to data from PitchBook. Things were slightly better in 2022, when only the median late-stage and growth-stage valuations were down from 2021, while the median early-stage valuation continued to rise.

Things aren’t looking so good this year either. A recent TechCrunch+ survey of more than 40 investors found that very few VCs actually expect valuations to rise again this year. In fact, a lot of VCs said valuations will continue to drop, while others think we are already at the bottom.

However, they all agreed on one thing: In 2024, stage and sector will matter now more than ever for determining valuation trends.

Early stage

When the market started to turn in 2022, seed and early-stage valuations did not decline as quickly as the late stage, because younger startups are more insulated from the public markets. Because of that delay, some investors think there is still room for seed valuations to come down.

Kirby Winfield, founding general partner at Ascend, predicted that seed valuations will likely keep declining another 5% to 10% before they normalize. Drew Glover, a general partner at Fiat Ventures, also thinks we aren’t at the bottom quite yet.

“At the earliest stages, we’ll continue to see those valuations come back down to earth, but overall, settle in a position that everyone feels like it’ll provide value to investors and to the employees of those companies as well,” Glover said.