Only $5.8 billion in exit value was generated, just 2.2% of the quarterly highs of the past two years and the lowest quarterly since the global financial crisis.
Dealmaking didn’t go so well. Deal value is down more than 60% from its Q4 2021 peak. Last quarter’s $37 billion total also includes his $6.5 billion round for Stripe, which wasn’t even raised for the company’s growth.
In 2022, the bright spot for the industry is fundraising, setting annual records. No more. With just $11.7 billion raised in the first quarter, he set the year for its lowest annual total since 2017.
In a recent note, the collapse of SVB was Another pressure the market didn’t needit seems to be true, but it is difficult to point out bank failures. reason The venture industry is struggling. Market compression was underway even before the collapse and was, in fact, a major part of the failure.
The mounting pressures of 2022 have yet to cause large corporate bankruptcies or a significant increase in down rounds.
If the first quarter bodes well for the market in 2023, VC-backed firms looking to raise capital will have their sights set on a formidable market. Investor prudence has led to high funding benchmarks, and even companies that have been on their growth trajectory are unable to raise at the expected multiples, leading to smaller valuation step-ups and higher rounds. Dilution progresses in comparison. past.
A reset is what the venture market needed. His $346 billion in transaction volume and his $768 billion exit volume recorded in 2021 were not at sustainable levels. However, the rapid and drastic contraction has left many companies in a vulnerable position. In particular, late-stage and venture-growth companies have become highly dependent on crossover investors and his rapidly changing IPO market.
For more information on Q1 VC data, access key underlying datasets from the upcoming PitchBook-NVCA Venture Monitor. Download First Look
