---
title: "Do Data Startups Command a Premium in the Fundraising Market?"
description: "Discover how data startups now command a 75% valuation premium in VC funding rounds - analyzing 10+ years of trends in startup valuations and market data."
categories: ["trends","data analysis"]
keywords: ["data startups","venture capital","Tomasz Tunguz","fundraising market","startup valuations","data company premium","Series A funding","investment trends"]
ai_summary: "Data startups have seen a 75% valuation premium in VC funding, reflecting changing investor expectations over the last decade."
date: 2022-01-11
lastmod: 2026-07-31
canonical_url: https://www.tomtunguz.com/data-company-valuations/
author: "Tomasz Tunguz"
---

After writing [my predictions for the year 2022](https://tomtunguz.com/2022-predictions/), a reader asked how I would measure if this were truly the decade of data. Good question!

The market determines which sectors are in favor and which sectors aren't. Stealing a page from [Michael Mauboussin's Expectations Investing](https://tomtunguz.com/expectations-investing/), company value contains information about investors' expectations for a company. Naturally, comparing data companies' valuations to the market should reveal investors' aspirations for the data sector relative to the market writ large. 

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/v1641859178/mo4smq59ekojra2yjsqo.png)
Looking at overall data, in the early 2010s data companies raised money at valuations indistinguishable from other startups. During the middle of the decade, data companies traded at a small discount, which is likely statistically significant given the sample size (n=1300-1700 depending on the year). 

2018 was the watershed year. Data startups commanded a 47% premium. Two years later, the figure spiked to 60% and last year, the market placed a 75% premium. 

But there's a problem with this analysis: it doesn't account for the round composition changing. If data companies raised more later stage rounds than early rounds, the figure would spike.

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/v1641943463/axsrkg8b0hul7skawpyu.png)
Looking at Series A figures, we see a similar pattern but smaller amplitude. Data companies traded at a discount in the early 2010s and now they trade at a modest premium, about 10% average in the last 5 years, contrasting the 15% discount of the early part of the decade.

Sectors rotate from being in-favor to out-of-favor, and that's certainly the case with data both at the Series A and the market broadly.