Global venture capital (VC) financing saw a significant decline in the third quarter of 2022 as several large-scale challenges affected investor appetite, according to new research.
Venture capital funding for the quarter fell 53% year-over-year, and 33% quarter-on-quarter, to $81 billion according to statistics from Crunchbase (Opens in a new tab).
That makes the third quarter the weakest quarter in venture capital funding since the first quarter of 2020, when the pandemic first began.
Late projects and growth financing were among the sectors hardest hit, with both seeing significant declines during 2022.
About $40 billion was pumped into the delayed venture and private equity of risk-backed companies in the third quarter of 2022, down 40% quarter-on-quarter, and down 63% year-over-year.
However, some sectors were more resilient.
Global early-stage funding was down just 25% quarter-on-quarter and 39% year-over-year, bringing total funding to $34 billion.
Series A funding has held up relatively well, dropping just 23% year over year, while Series B funding is down 54% in the same period.
Is funding recovering?
Crunchbase He argued that it was “not entirely clear” whether funding had hit rock bottom or would decline further in the fourth quarter, as investment could slow during the summer months.
The publication also highlighted that record amounts raised in 2021 and the first part of 2022 could put “extra pressure” on the markets.
But not everything is bleak in the world of venture capital, Adobe recently announced its acquisition of online collaboration tool Figma for $20 billion, one of the largest ever acquisitions of a private enterprise-backed software company.