Global VC investment drops significantly to $57.3 bn: KPMG

Global VC investment has touched $57.3 billion across 6,030 deals in Q1 2023 vs $177.6 billion in Q1 2022 vs $86 billion across 9,619 deals in Q4 2022, according to the Venture Pulse report by KPMG Private Enterprise.
VC funding for techVC investment in the Americas touched $33.1 billion, the lowest level since Q1 2018. VC investment in the Americas was $33.1 billion across 2,542 deals in Q1’23, a decline from $44 billion across 4,050 deals in Q4’22.

VC investment in Europe reached $9.8 billion, the lowest since Q3 2018. In Europe, VC investment fell from $15.7 billion across 2,512 deals in Q4’22 to $9.8 billion across 1,533 deals in Q1’23.

The $13.5 billion raised in Asia was the lowest since Q2 2015. VC investment in Asia dropped from $25.5 billion across 2,799 deals to $13.5 billion across 1,773 deals between Q4’22 and Q1’23.

US-based payments company Stripe’s $6.5 billion raise was by far the largest VC round of the quarter globally, although it came with a steep cut to the company’s valuation —from $95 billion after its last funding round in Q1’21 to $50 billion in Q1’23.

After Stripe, US-based alternative energy infrastructure Generate Capital raised the next largest deal ($800 million), followed by China-based EV automaker Zeekr ($750 million), and US-based cycling and running platform Zwift ($620 million).

In Europe, UK-based AI-driven open banking platform Abound raised the largest deal of the quarter ($601 million).

“While VC investment globally is expected to remain weak in Q2 2023, one area we expect to see pick-up is in the area of generative AI,” said Jonathan Lavender, Global Head, KPMG Private Enterprise, KPMG International.

Global exit value dropped more than 50 percent quarter-over-quarter, from an already low $46.4 billion in exit value in Q4 2022 to $20.3 billion in exit value in Q1’23

The VC investment in India remained relatively soft in Q1 as VC investors intensified their scrutiny of potential deals.

Interest in alternative energy remained robust in India, with VC investors particularly focused on the two-wheel EV market.

Fintech continued to drive many of the largest deals in India and the country also saw growing interest in agtech and gaming during the quarter.

“The biggest change in India is that the euphoria for deals has died down. The big-ticket deals have also dried up, which has had an outsized impact on our total investment numbers,” said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.

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