Early-stage tech startups in the U.S. are raising more capital than their peers five years ago, even as their headcount has declined by 16%, according to a study by labor analytics firm Rebellio Labs.
One possible reason is that more and more companies are deploying artificial intelligence tools to automate administrative tasks, reducing the number of employees.
“Today’s startups seem to be promising more for less,” Dean Boerner, a data scientist at Revelio Labs, wrote in a blog post Tuesday. “Even as funding rounds continue to grow, teams are leaner than they were just a few years ago, a sign that both founders and investors are prioritizing efficiency, whether driven by AI tools, automation, or more disciplined spending.”
The median Series A funding amount for U.S.-based technology startups will be $15 million per company in 2025, an increase of 50% from 2020, according to data from Revelio Labs. Over the same period, the median funding per employee for Series A-stage startups nearly doubled from $160,000 to $320,000. This is because the median number of employees for similarly staged startups decreased by 17.5%, from 57 to 47 employees.
These numbers suggest that early-stage startups may be able to rely more on AI tools to automate tasks and maintain small headcounts even in rapid growth mode without sacrificing too much productivity, Werner noted. This trend could be due to founders’ increasing reliance on AI, investors’ appetite for startups that leverage AI to minimize expenses, or both.
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In nearly every industry, some leaders are embracing AI in ways that have the potential to reshape the job market and change how workers perform their daily roles. Prominent CEOs from Amazon’s Andy Jassy to Ford’s Jim Farley have said they plan to reduce their companies’ workforces or slow their growth as they increase investment in AI infrastructure.
“It’s clear that AI is going to literally change every job,” Walmart CEO Doug McMillon told the Wall Street Journal in September, referring to the company’s plans to freeze its global workforce over the next three years. He added that Walmart’s revenue is expected to increase over this period even without headcount increases due to the increased adoption of AI technology.
According to Gallup, the number of U.S. workers using AI tools in the workplace has nearly doubled in two years, reaching 40% in 2025, compared to 21% in 2023. A July report from researchers at the Massachusetts Institute of Technology found that 95% of companies have yet to see a measurable return on their AI investments, with mixed results.
Which companies are successfully leveraging AI to increase revenue? According to the MIT report, most are early-stage startups run by young entrepreneurs who are building processes around AI models specific to their business.
Data from Revelio Labs may support the idea that AI can help small businesses grow faster. “If this path continues, the next generation of high-growth companies may be defined not by rapid headcount expansion, but by smaller teams accomplishing more with every dollar raised,” Werner wrote.
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