Q3 2022 Venture Capital Funding Results
Global numbers dropped to a two-year low
The figures are in for the third quarter of 2022. They show that just a bit shy of $75 billion was generated by the world venture capital market during this period. This represents about a 35 percent quarterly decline and a drop of nearly 60% from the high-water level generated in Q4 of 2021. The number of deals seen came in at almost 8000 which was about 10% fewer than the previous period.
Fintech and healthtech companies remained at the top of the collective in non-US countries, while energy related ventures continue their increase on the general scale to zone in on the third ranking.
One interesting development was the emergence of climate tech companies ranging from nuclear energy providers to electric vehicle manufacturers which took in 6 of the top deals. This sector continues to be one to watch given recent developments amongst private and public sector entities that have opened up a wide range of possible cash accumulation routes and possibilities.
Firms are still holding record amounts in reserve
As discussed during the prior quarterly update, venture capital groups remain sitting atop a large amount of unused funds, and the amounts brought in this year continue to add to that trend. Based on our discussions with various companies it seems very clear that they have altered their approaches in many ways to reflect the global slowdown. In short, these groups once again have an advantage not seen recently. Requirements for various concessions have become more prevalent while demands for internal positions and select stock have also increased. This is certainly not a surprising development given the activity seen not that long ago when record amounts were being distributed and firms were much less restricted with their approaches.
General outlook
There undoubtedly will be more of the same coming up in Q4 due to overall economic trends and uncertainty. However, the massive amounts being horded will eventually find its way into the system in the longer-term due to investor push and demand and a better view of where things are headed as we near the end of the year. The general notion that we are hearing is that things may simply be returning to a more normal trend that has been highly skewed by the massive outlier of 2021.
