Early-stage funding in information technology companies in the U.S. and Canada remained above the $1 billion mark in the third quarter of 2022 despite posting a second consecutive quarter of decline in investments.

The number of early funding transactions in the sector by private equity firms dropped to 278 in the quarter ended Sept. 30, from 413 deals in the previous quarter, according to S&P Global Market Intelligence data.

The sector raised $1.15 billion in the third quarter, down about 10.1% from $1.28 billion in the quarter ended June 30. The aggregate value of early-funding transactions in the third quarter marked a 8.5% year-over-year decline.

*Review Merkle Manufactory's funding overview. * See the details of Yuga Labs seed funding round.

In the third quarter, the sector raised $1.08 billion from seed funding, down 9% compared to the same period in 2021.

Angel funding for information technology startups sank 65.7% year over year to $12.9 million in the quarter, with one recorded transaction in August and three in July.

Third-quarter accelerator funding surged 190.3% year over year to $18.0 million, while pre-seed funding grew 42.3% year over year to $45.4 million.

Merkle Manufactory Inc. raised the highest amount of early-stage funding in the third quarter. The application software company received $30 million from selling 2,331,111 preferred shares at $12.87 each. Andreessen Horowitz LLC led the funding round, which included participation from 28 investors.

In the first nine months of 2022, Yuga Labs Inc. scored the highest early-stage investment among information technology companies with a $450 million seed funding round in March. Arc Technologies Inc.'s $161 million funding round in January ranked second, while Trust Machines' $150 million seed investment in February ranked third.