Hello and welcome back to The Exchange’s weekend missive. If you are reading this on TechCrunch and want to get the letter in your inbox, click here. Your regular host, Anna Heim, is off this week on a much-deserved vacation, so I’m stepping back into my old role as newsletter scribe. It’s good fun to write this note, frankly, so thanks for having me.
A Look Abroad: The Good News from the Venture Market
Today we’re taking a look at the good news from the venture market that we covered this week, but with an added global perspective. We’re broadening our lens a bit to get more general figures to better understand if the good news from the United States is holding up elsewhere. Call it a look abroad in Anna’s honor.
The Good News: Venture Capital Activity Holds Up Better Than Expected
In the United States, venture capital activity is holding up better than we anticipated. That’s good. Perhaps even better, venture interest in software startups is looking downright robust. That matters because most startups are software companies; if software startups are healthy, then upstart tech companies in general are doing OK. And given the United States’ weighty influence on startups overall, then startups must be OK everywhere, right?
Nope: Not All Countries Are Booming
Not anymore. Yes, the U.S. venture capital market is the biggest in the game, but the global startup industry is so large — and distributed — now that a healthy heartbeat doesn’t mean there aren’t problems elsewhere.
Global Numbers
My former corporate and journalistic home Crunchbase News has a grip of data on offer this week about the global venture capital market. Here’s what it details on a per-stage basis when we compare global Q3 numbers to Q2 results, as well as year-ago totals:
Seed/Angel
- $7.4 billion in Q3 2022
- $9.7 billion in Q2 2022
- $7.9 billion in Q3 2021
Early Stage
- $33.8 billion in Q3 2022
- $45.2 billion in Q2 2022
- $55.6 billion in Q3 2021
Late Stage
- $39.9 billion in Q3 2022
- $66.9 billion in Q2 2022
- $108.4 billion in Q3 2021
The seed data is not bad. In fact, you could argue that it’s somewhat strong. Nearly matching a 2021 figure in 2022? Solid. From there the news gets worse. Early-stage capital on a global basis is slowing rapidly, and the picture for late-stage deals isn’t much better.
A Closer Look: The Impact of Global Economic Trends
So what’s behind this slowdown? It’s likely due to a combination of factors, including:
- Global economic uncertainty: With many countries facing economic challenges, investors are becoming more risk-averse.
- Changing investor priorities: With the rise of ESG investing, investors are increasingly focused on impact and sustainability.
- Shifting startup landscape: The number of startups being founded is decreasing, which can lead to a decrease in venture capital activity.
The Bottom Line: Not All Countries Are Created Equal
While the United States may be experiencing a surge in venture capital activity, other countries are facing challenges. It’s essential for investors and founders to understand these nuances and adapt their strategies accordingly.
What’s Next?
As we move forward, it will be crucial to keep a close eye on global economic trends and adjust our expectations accordingly. By doing so, we can ensure that startups continue to thrive, even in uncertain times.
Related Reading:
- Venture Despite VCs Investing $75B in Q4 , It’s Still Hard for Startups to Raise Money, Data Proves
- Marina Temkin, 10 hours ago
- New York Powerhouse VC Insight Partners Nabs Another $12.5B After $8B in Exits
- Julie Bort, 11 hours ago
- Failed Fintech Startup Bench Racked Up Over $65 Million in Debt, Documents Reveal
- Charles Rollet, 11 hours ago
Stay tuned for more insights from The Exchange. Until next time!
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