Money invested by venture capital funds in the first quarter of 2023 fell by 53% internationally
Investment confusion, which translated in practice into a significant reduction in funding to startups, worldwide, prevails in the startup ecosystem. Financing from venture capital funds decreased in the first quarter of 2023 by 53% and reached the level of 76 billion dollars, an amount that is significantly different from the 162 billion dollars that startups had “raised” internationally, the three first months of 2022. In fact, the weak – by the standards of the field – performance of the first quarter of this year would have been even more sluggish without the mega-deal for the acquisition of OpenAI by Microsoft for 10 billion dollars and without the $6.5 billion funding round raised by fintech Stripe. Without these two deals, the ecosystem would have raised less than $60 billion in capital in the first three months of 2023. “The collapse of Silicon Valley Bank on March 10 was an additional shock to the already weakened funding environment.
The impact was not limited to startups in the United States, since SVB was the bank of choice for startups from all over the world,” says Crunchbase in its related analysis, cited by SEPE. Indicative of the investment malaise, which prevailed in the first quarter of 2023, is the fact that funding was reduced to startups, regardless of stage, according to Crunchbase data. Practically speaking, startups at every stage saw an average funding cut of between 44% and 54%.
In the first quarter of 2023, early-stage funding stood at $25.6 billion, marking down 54% year-on-year. Meanwhile, funds raised by late-stage startups reached $43 billion, a dramatic drop from $93 billion in the first quarter of 2022.
Sectors that saw a decline in the first quarter of the year include e-commerce, blockchain and cryptocurrencies. However, AI remained a bright spot for the startup ecosystem, with major funding in the first three months of 2023.