The Quiet Return of Growth-Stage Valuations
Late-stage rounds are pricing tighter to last-round marks than at any point since 2022. The thaw is selective.
Growth-stage rounds in the most recent quarter priced, on average, within 15% of their previous round marks — the tightest gap since 2022. That headline obscures the dispersion underneath: a small number of categories are pricing above prior rounds, while another set is still raising structured rounds at meaningful discounts.
Where the recovery is real
Three categories show clean upward pricing. AI infrastructure, particularly companies with credible enterprise revenue and not just inference volume. Vertical software with proven AI-product attach. And defense-adjacent technology, as discussed in the broader defense-tech category review.
What these have in common is a legible path to exit. The IPO market remains selectively open, and strategic acquirers in each of these categories are active. Capital follows liquidity, even if the public-market window opens only intermittently.
Where it is not
Generic SaaS, particularly horizontal productivity tools, continues to raise at flat or down rounds. Direct-to-consumer brands are mostly being recapitalized rather than re-funded. Crypto and Web3 categories have rebounded in price but not in deal volume — the trades are concentrated in a small number of well-known names.
What the LP environment looks like
Limited partners are deploying selectively. Per The Wall Street Journal reporting on fundraising data, the median fund close timeline has compressed for top-quartile managers and extended for the rest. The bifurcation among GPs is wider than it has been in any cycle in the last decade.
That LP selectivity reinforces the asset-side selectivity. Capital that does close is being deployed conservatively into categories where the exit path is most legible. That feedback loop is what is producing the differentiated price recovery.
Implications for founders
Three. First, the category you are in matters more to your valuation than the metrics you can show. Second, structured terms — particularly preferences and ratchets — are no longer a stigma at growth stage; they are a tool. Third, the speed of round close has bifurcated: hot deals close in weeks; soft deals take quarters or do not close.
What to watch
The IPO calendar for H2, particularly in vertical software and AI infrastructure. The pace at which dedicated AI funds deploy committed capital — many large vehicles raised in 2023-24 are still substantially undrawn. And the secondary market for late-stage shares: persistent secondary discounts above 20% to last primary marks are inconsistent with the headline recovery narrative.
Per Bloomberg coverage of recent secondaries, that gap is narrower than it was twelve months ago but has not closed. The recovery is real and uneven.