NVCA: U.S. venture capital deals activity weakened in Q3
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The value of U.S. venture capital deals weakened across all stages in the third quarter of 2022 as the economy and startup ecosystem showed more signs of distress.
The Pitchbook-NVCA Venture Monitor First Look (preliminary data) showed a slowdown in the third quarter in the U.S. market, which is the biggest in the world. It was the third consecutive quarter of decline in completed deals.
VCs invested in 4,074 companies in Q3, down almost 20% from the quarterly record high recorded in Q1 (5,049). It is the the lowest volume count seen in any quarter since Q4 2020 (3,364). Q3 saw $43.0 billion invested in VC deals across all stages, a nine-quarter low, cementing a tone of investor hesitancy and increased focus on business fundamentals amid the global economic downturn, even if the numbers remain high on a historical basis.
But VCs have dry powder. U.S. VC fundraising has set a new annual high through only three quarters of 2022, with $150.9 billion raised so far. The 21-month fundraising total is $298.1 billion. Given public market turbulence and frozen avenues for liquidity, the NVCA expected limited partners to be concerned about their overexposure to this asset class and the potential for timely returns negatively impacting fundraising activity.
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Entering the second half of the year, the NVCA is finally beginning to see that momentum degrade, as just $29.4 billion in fundraising was added to the
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