Global VC investment falls to five-year low in Q3’23
Global VC investment fell to a sixteen-quarter low this quarter as the VC market continued to feel the pressure of global economic and geopolitical uncertainties, ongoing concerns about valuations and downrounds, and a protracted lack of exit opportunities. Deal speeds continued to slow as VC investors remained cautious—undertaking more due diligence related to potential deals and prioritizing companies with clear paths to profitability. VC investors also continued to focus on improving the operational efficiencies of companies within their existing portfolios.
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VC investment in the US remains soft
VC investment in the US fell marginally in Q3’23 as investors continued to shy away from making large deals. A $4.0 billion raise by Anthropic and a $997 million raise by lithium-ion battery recycling company Redwood Materials accounted for the largest deals of the quarter, followed distantly by a $500 million raise by AI-company Databricks, a $460 million raise by Battery recycler Ascend Elements, and a $460 million raises by Axiom Space.
Dealmaking remains slow across Americas
Both VC investment and the number of VC deals remained subdued in the Americas during Q3’23, with the number of VC deals in particular dropping to a ten-year low during the quarter. The decline in VC deal volume and value was mirrored across much of the Americas, with numbers dropping in the US and Canada and only slight increases in Brazil, and Mexico. Similar to previous quarters, the US attracted the vast majority of VC funding in the Americas during Q3’23, including large raises by battery recycling company Redwood Materials ($997 million), AI firm Databricks ($500 million), battery recycler Ascend Elements ($460 million) as well as Axiom Space ($460 million). Other large raises this quarter included construction equipment provider EquipmentShare ($440 million) and gene therapy firm Kriya Therapeutics ($430 million). AI chip company Tenstorrent raised Canada’s largest deal of Q3’23 ($100 million), while proptech Loft raised the largest deal in Brazil ($100 million).
Europe sees VC investment strengthen
VC investment in Europe increased slightly quarter-over-quarter, powered by a series of mega-deals. Overall, there were 10 deals of $225 million plus in Q3’23 including a $2.27 billion raise by France-based battery recycler Verkor, a $1.63 billion raise by H2 Green Steel in Sweden and a $631 million deal by UK driverless vehicle firm Conigital. Fresh dog food company Butternut Box raised $355 million, followed by $325 million raise by Switzerland-based Atlas Agro.
VC investment in Asia remains subdued in Q3’23
VC investment in Asia fell for the seventh straight quarter in Q3’23. Despite soft investment compared to historical norms, China continued to account for the largest share of VC funding in Asia in Q3’23, including a $1.87 billion raise by GTA Semiconductor and a $1 billion raise by Rox Motor. India saw VC investment slide further during Q3’23, with Juniper Green Energy raising the largest deal of the quarter ($350 million). VC investment in Japan, however, remained quite resilient in Q3’23, likely a tribute to the country’s rapidly growing VC market.