The large global venture capital setback that’s been expected by many is finally here. As a dip in public markets stretched into the third quarter, venture and growth funding in private companies dialed back their investments significantly.
According to a Crunchbase News analysis, third-quarter venture funding totaled $81 billion, decreasing by $90 billion (year over year), and $40 billion (quarter over quarter.) In the coming months as stealth funding is announced, funding for the most recent quarter will increase slightly. This is still a huge drop, however, compared to previous quarters.
This quarter has been the lowest quarterly funding amount since 2020’s first quarter.
Counteracting recent funding trends, Adobe’s acquisition of Figma- the largest acquisition in the history of venture, has increased by $10 billion. This is double what it was valued at for the last valuation of $10 billion last June, making it worth $20 billion now.
Furthermore, 67 other companies are now valued at over $10 billion. ByteDance, Shanghai-based, is the most highly valued private company, according to reports. A total of 37 companies joined the Crunchbase Unicorn Board List this most recent quarter, which is the smallest amount in the past two years.
Global late-stage funding is also down in the second quarter, continuing its downward spiral in 2022’s third quarter. $40 billion was invested in late-stage private equity and venture-backed companies, which is down 40% quarter over quarter.
Global early-stage funding has declined 25% quarter over quarter and 39% year over year, totaling $34 billion in the third quarter.
Seed-Stage runups have been the least impacted in 2022, but are still down quarter over quarter and year over year.
All in all, funding has declined rapidly in the third quarter of 2022. The question is, have we officially hit our breaking point? Is this what rock bottom looks like? There are many that believe new investment pressure will build up moving into 2023, as they did in 2021 and now in 2022.
