Drastic decline in global venture capital investment
KPMG Venture Pulse: Decline almost at the level of the Corona year 2020
KPMG Venture Pulse: Decline almost at the level of the Corona year 2020
Berlin, July 26th 2023
Investment in the global venture capital market fell dramatically in the first half of this year compared to the same period last year. While global venture capital investments from January to June 2022 were still at $331.1 billion, they fell by 50 percent to just $163.6 billion in the first six months of this year. This almost reached the low level of the Corona year 2020 (156.6 billion). The decline was even greater in Europe (down 61 percent to $27.9 billion), Germany (down 53 percent to $3.95 billion) and the VC stronghold of Berlin (down 65 percent to $1.82 billion).
Investors held back on big deals - with a few exceptions: $6.8 billion in capital raises by U.S. online payment service Stripe, $2 billion by Singapore-based online retailer Shein, and a $1.3 billion capital raise by Microsoft-backed California-based AI startup Inflection.
Geopolitical uncertainties, high inflation and the possibility of further interest rate hikes in many countries have unsettled the global venture capital market in the first half of the year. Investors are still very cautious, scrutinizing potential deals even more closely and paying particular attention to the profitability and sustainability of startups' business models in their investments.
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KPMG AG Wirtschaftsprüfungsgesellschaft
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