Already, 30 funds have closed on at least $1 billion in commitments, eight more than the previous full-year high of 22 recorded last year. These managers have closed 203 funds worth $94.7 billion through the first six months of the year. A strong showing from established managers in the first half of the year has pushed capital raised to a record pace. VC fundraising topped $120 billion for second consecutive year in 2021. But right now everyone’s taking a little more caution than they were in 2021,” Stanford said. “There is a storage of VC money ready to be deployed. VC deal activity has slowed in 2022 compared to last year’s record year.īarring a massive recession or worse news, the venture market will likely have a lot of investors ready to put capital to work and invest money. The slowdown will likely continue for multiple quarters so long as we see uncertainty in the stock markets, interest rate hikes and inflation growth, Stanford said. “But we’re just seeing a little more caution, and rightly so, than we were in 2021.” “There’s a lot of dry powder and a lot of available capital to the market,” Stanford said. With well more than $230 billion in dry powder and nearly 3,000 funds being closed since the beginning of 2019, the NVCA said we can expect investments to continue until more certainty can be found across economic markets. Momentum from the past six months continues to bring new deal announcements, which is a positive sign for the market - especially compared to industry narratives. Deal counts have stayed relatively high across all stages, with seed pushing toward recent highs at an estimated 1,400 deals. “Crypto, obviously, has been one of the most attractive investments for VCs for the past couple quarters, but the growth was at an unsustainable pace and so a slowdown is not something to be unexpected in that area,” Stanford said.īut venture capitalists still have a lot of funds to invest. Cryptocurrency and blockchain VC deal activity on a global basis fell from 656 deals worth $9.9 billion in Q1 to 514 deals worth $6.7 billion in Q2, the report said. That was pretty expected as it is the first quarter since Q4 2020 that had less than $77 billion invested.”Ĭryptocurrrency investments suffered in particular. “Deal value has dropped pretty significantly from last year, though. Deal counts declined, but it’s really not too bad, and it is still one of the highest quarters of all time,” said Stanford. “Right now we are seeing pretty strong prices in the market. Median valuations have stayed pretty steady, but the top stages with inflated valuations are gone, said Kyle Stanford, senior analyst at Pitchbook, in an interview with VentureBeat. But deal value fell from $94.4 billion in Q4 2021 and $82 billion in Q1 2022 to $62.3 billion in Q2. To put the slowdown in perspective, the deal value in Q2 2022 was the highest of any quarter before Q4 2020.ĭeal counts are down 24.5% from the first quarter to the second quarter. Q2 2022 was the first quarter since Q4 2020 to post less than $77 billion in completed deal value, with just over $62 billion closed. While the VC industry may not be suffering as much as public market investors, the crypto speculators, or ordinary people hurt by inflation and the pandemic, it is a concern if the VC industry slows down because startups have been such an engine of job growth for the U.S.
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