It was a challenging 2022 for VC investment globally, despite strong fundraising activity and a major amount of dry power available in the market. The ongoing conflict in the Ukraine, rapidly rising interest rates, high levels of inflation, and concerns about a global recession all combined to drive VC investment down, particularly in the second half of the year. Global VC investment in Q4’22 was down significantly quarter-over-quarter — and less than half the record level set during Q4’21.
Heading into Q1’23, VC investment globally is expected to remain subdued given the uncertainty in the market. Down rounds will likely become more prevalent as companies are forced to raise capital despite the less-than-optimal market conditions. M&A activity could also pick up as companies begin to run out of cash and fail to attract new investment.
In this quarter’s edition of Venture Pulse, we examine these and a number of other global and regional trends, including:
The continued focus on cost-cutting and cash preservation
The relative resilience of early-stage funding activity
The funding challenges faced by unicorn companies
The continued strength of fundraising globally