Q3’23 was a particularly quiet quarter for the VC market globally, with both total VC investment and the number of VC deals dropping between Q2’23 and Q3’23. On a regional basis, while there was a decline in total investment in both the Americas and Asia, European deal activity increased slightly quarter-over-quarter.
The report analyses the latest global trends in venture capital investment data and provides insights from both a global and regional perspective. This edition provides in-depth analysis on the lifecycle of venture capital investments across the Americas, EMA and ASPAC, including a look at investment activity such as valuations, financing, deal sizes, mergers & acquisitions, exits, corporate investment and industry highlights.
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 down-rounds, 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 prioritising companies with clear paths to profitability. VC investors also continued to focus on improving the operational efficiencies of companies within their existing portfolios.
VC investment globally is expected to remain relatively flat in Q4’23, given ongoing uncertainties in the global market. AI, energy, and cleantech are expected to remain very attractive to VC investors across most jurisdictions.
Globally, many VC investors will have their eyes glued to the IPO market in Q4’23 and into Q1’24, watching to see the impact of the Q3’23 IPOs of Arm, Instacart, and Klaviyo. While the IPO window is not expected to see a dramatic reopening before the end of the year, additional exits could spark a renewal in IPO activity heading into the first half of 2024.
A look at Asia
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.
Venture Capital investment drops to $20.3 billion invested across 2582 deals
Early-stage deals remain surprisingly resilient
Corporate VC pulls back in line with general market
Japan continues to see strong dealmaking
Electric vehicle ecosystem remains hot in China
Chinese companies raise 8 of largest 10 deals in Asia
For more insights into key trends, opportunities and challenges facing the VC market globally and across regions, download our full report.