Venture capital (VC) funding in the US took a massive hit in the first quarter (Q1) of 2023 as growing investor cautiousness weighed heavy on the deal-making sentiments. Subsequently, VC deals value year-on-year (YoY) nosedived 50.2% from $72.6 billion in Q1 2022 to $36.1 billion in Q1 2023, reveals GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that VC deals volume in the US YoY fell by 45.3% from 3,568 to 1,950 during the same period.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “Investor sentiments are being influenced by the current economic conditions, which is reflected in the significant decline in the value of venture capital deals. This trend suggests that investors are becoming increasingly reluctant to make large investments.”
However, despite the subdued activity, the US maintained its dominance in the global VC funding landscape by accounting for 36.3% of the total number of VC deals announced globally and 54.4% of the corresponding deal value in Q1 2023.
Some of the notable VC funding deals announced in the US during Q1 2023 included $6.5 billion fundraising by Stripe, $500 million raised by Rippling, $500 million raised by Sandbox AQ, and $350 million by Adept AI.
Bose concludes: “It is worth noting that even though the US did not see the announcement of any billion-dollar VC deal (valued more than or equal to $1 billion) in Q1 2022, it saw the announcement of such deals, including the $6.5 billion fundraising by Stripe, in Q1 2023. This could be seen as a positive sign amid the gloomy market conditions.”
