VC investments and exits were tepid in 2023 | NVCA
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In 2023, U.S. venture capital deal activity continued its slump from the highs two years ago, and global VC investments fell to the lowest levels since 2019.
In 2023, 15,766 deals were completed in the U.S., but, more importantly for the industry, just $170.6 billion was invested into companies, which is roughly half of the amount invested in 2021 and highlights the shortage of capital availability private companies are facing, according to a report by Pitchbook and National Venture Capital Association.
U.S. exits returned just $61.5 billion to investors during the year. Large tech initial public offerings (IPOs) were especially sparse considering the high number of unicorns that remain private. The inability to return money to investors has challenged the free-flowing capital into VC, based on the first look details of the report.
After a record year for closed funds in 2022, just $66.9 billion was committed to VC funds during the 2023 in the U.S. That amount represents the lowest total since 2017, and will likely hamper a potential rebound in dealmaking during the new year. Though dry powder remains high, investors have become much more cautious when deploying capital to new portfolio companies.
Despite the slowdown in dealmaking, media deal sizes for EU-based startups remained at or new all-time-highs across all stages of VC.
Concurrently, valuations continued to be historically high within the market. Europe dealmaking continues its descent, with Q4 deal count falling to the lowest total since Q3 2018.
Each quarter during 2023 realized less than $4.38 billion in exit value. The $12.92 billion
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