Parul
As global VC deals took a major hit in the first quarter of this year, investors are still willing to place big bets on promising startups despite the overall decline in deal activity, a new report showed on Wednesday.
A total of 4,143 VC funding deals with disclosed funding value were announced globally in Q1 2023, which is a decline of 42.1 per cent compared to the 7,158 announced deals during Q1 2022, according to GlobalData.
The number of low-value VC deals (investment less than or equal to US$ 10 million) announced globally witnessed a decline of 36.9 per cent from 4,685 in Q1 2022 to 2,954 in Q1 2023.
Meanwhile, the number of VC deals valued at more than US$ 100 million decreased by a massive 75.1 per cent from 321 in Q1 2022 to 80 in Q1 2023.
“Although the number of big-ticket deals is not too high, their comeback during the quarter despite the challenging market conditions is a reason to cheer for promising startups,” said Aurojyoti Bose, lead analyst at GlobalData.
The impact in Q1 was more prominent for high-value transactions. This indicates a potential shift in the VC landscape, as investors become more cautious and selective with their investments, revealed GlobalData, a leading data and analytics company.
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“High-value transactions were impacted as VC investors remained cautious for committing big investments over the prevailing geopolitical conditions, macroeconomic challenges and recession fears,” said Bose.
Despite the decline, low-value deals continued to dominate the VC funding landscape by registering the highest number of VC deals announced in this range globally during Q1 2023.
The share of low-value deals as a percentage of the total VC deals volume with disclosed funding value stood at 71.3 per cent in Q1.
Meanwhile, VC deals valued at more than US$ 1 billion, which were non-existent in Q1 2022, made a comeback in Q1 2023. The quarter saw the announcement of two VC deals valued at more than US$ 1 billion, said the report.
