Both global VC investment and the number of VC deals significantly dropped year-over-year, with all regions experiencing major declines, particularly in Asia. Heading into Q1’24, global VC investment is expected to remain subdued given the degree of uncertainty in the market both geopolitically and economically.
KPMG Private Enterprise’s quarterly report highlights the key trends, opportunities, and challenges facing the VC market globally and in key jurisdictions around the world. 2023 was a very challenging year for the VC market globally, as a number of factors combined to drive up uncertainty and investor caution, including geopolitical conflicts and tensions, high interest rates and levels of inflation, ongoing concerns about valuations, and the incredibly dry exit environment. Both global VC investment and the number of VC deals significantly dropped year-over-year, with all regions experiencing major declines.
In this quarter’s edition of Venture Pulse, we examine these other global and regional trends, including:
- The ongoing surge of investment into AI
- The intensifying focus on profitability
- The growing prominence of down rounds
- The significant slowdown in the time to complete deals
- The lack of exit opportunities across regions
Asia outlook & insights
Both VC investment and the total number of VC deals in the Asia-Pacific region pulled back significantly during 2023, amidst rising interest rates and other economic challenges, geopolitical tensions, and concerns about liquidity and the lack of exits. Q4’23 was particularly quiet for VC investment in the region, despite two $1 billion-plus funding rounds — one by China-based semiconductor manufacturer Changxin Xinqiao and the other by Singapore-based, ecommerce company Lazada.
VC investment in the Asia-Pacific region is expected to remain quite soft heading into Q1’24, although there will likely continue to be solid investments in areas like artificial intelligence, deeptech, cleantech, and alternative energy.
VC investment reaches only $18.8 billion across 2,390 deals
Valuations plunge — particularly for late-stage deals
Early-stage activity remains resilient
Investment in Japan rises for the 4th consecutive quarter
Chinese companies raise 7 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.
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Footnote:
2 https://www.hkma.gov.hk/eng/news-and-media/press-releases/2023/08/20230825-3/
3 https://www.hkma.gov.hk/eng/news-and-media/press-releases/2023/12/20231211-4/