Late-stage deals plummet to 21-quarter low in US as VC funding halts: report

Nationwide, there were an estimated 3,888 deals valued at $37 billion, down from 5,243 deals valued at $82.4 billion a year ago, according to the figures.

“Venture-growth deal value ticked upward in Q1 2023, influenced heavily by Stripe’s $6.5-billion raise. Deal count in the growth stage hit the lowest it has been since Q3 2020,” the report mentioned.

The estimated deal count for Q1 2023 remains above 2020’s quarterly figures, despite a drop from Q4 2022.

“There is no denying the obvious: venture capital has gone through a rough couple of months,” said the report.

“Deal activity dropped in all stages and sectors during the first quarter of 2023, and the fundraising momentum carried from 2021 has evaporated,” the findings showed.

Just when a difficult exit environment seemed like it couldn’t get worse, the sudden failure of Silicon Valley Bank further rattled investors’ confidence in the first quarter.”The VC market trends that started in the middle of 2022 came into sharper focus in the beginning of 2023,” the executive summary read. “Continued instability abroad, stubborn inflation rates, and several high-profile bank failures contrasted with a bevy of positive macroeconomic indicators spread a plume of anxiety across the markets,” it added.

The report expects the fundraising experience for first-time fund managers in smaller VC markets “to be especially strenuous through the rest of the year”.

India funding scenario

Funding activity in the Indian startup ecosystem saw a jump in the last week largely because of a few deals that were announced including the fundraise at DMI Finance.

A total of $491 million of funding was raised across 18 rounds between April 1 and April 6, according to data provided by market intelligence firm Tracxn. Of this $400 million was raised by DMI Finance.

This compared to the same period last year, when $99 million was poured into startups in 15 rounds.

According to Tracxn data, about $400 million was pumped into late-stage startups, while early-stage startups picked up $38 million.