Global VC funding has seen a huge drop this year
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According to new research, global venture capital financing (VC) plummeted in the third quarter of 2022 as several large-scale challenges affected investor appetites.
VC funding for the quarter fell 53% year-over-year and 33% quarter-over-quarter to $81 billion according to statistics from crunch base (opens in new tab).
This makes Q3 the weakest quarter for VC funding since Q1 2020, when the pandemic initially started.
Investment hit
Late-stage venture and growth finance were among the hardest hit segments, both with significant declines in 2022.
In the third quarter of 2022, approximately $40 billion was injected into late-stage venture and private equity for venture-backed companies, down 40% quarter on quarter and down 63% year-over-year.
However, some segments were much more resilient.
Early stage global funding declined only 25% quarter on quarter and 39% year on year, to total $34 billion.
Series A funding held up relatively well, declining just 23% year-over-year, while Series B funding fell 54% over the same period.
Will funding recover?
crunch base argued that it is “not entirely clear” whether funding has bottomed out or will fall further in the fourth quarter as investment may slow in the summer months
The publication also stressed that the record amounts raised in 2021 and the first part of 2022 could put “additional pressure” on the markets.
But it’s not all doom and gloom in the venture capital world. Adobe recently announced the $20 billion acquisition of its online collaboration tool Figma, one of the largest-ever acquisitions of a venture-backed private software company.