The global venture capital (VC) landscape experienced a substantial setback in 2023, and the United States was not immune to this trend.
According to GlobalData, a leading data and analytics company, the impact on investor sentiments is palpable as the total VC funding deal value for the US took an extended 11 months to reach the $100 billion mark during the year, a stark contrast to the rapid achievement of the same level in just five months during 2022.
In 2023, a total of 6,596 VC funding deals with a disclosed funding value of $109.4 billion were announced in the US, reflecting a notable decline of 43.5 percent in terms of VC deal volume and 45.6 percent in terms of deal value compared to the preceding year. GlobalData’s Deals Database analysis reveals that in 2022, the US saw a total of 11,673 VC funding deals with a disclosed funding value of $201.2 billion.
Aurojyoti Bose, Lead Analyst at GlobalData, commented on the multifaceted factors contributing to the downturn in investor sentiments. “Several factors were at play in taking a hit on investor sentiments. Notable among them are macroeconomic challenges, inflation, interest hikes, ongoing conflict, and geopolitical tensions.”
It’s important to note that subdued VC funding activity remained a global phenomenon in 2023, affecting key markets across the board.
Despite the setback, the US maintained its position as a primary driver of global VC funding activity. It continued to stand as the top investment destination for VC firms, holding dominance in both deal volume and value throughout 2023. The US accounted for 33.8 percent of the total number of VC funding deals announced globally during the year, with its share of the corresponding deal value reaching 46.7 percent.
Several noteworthy VC funding deals marked 2023, including Stripe raising $6.5 billion, Inflection AI securing $1.3 billion, Metropolis Technologies raising $1.1 billion, Redwood Materials securing $1 billion, and Stack AV raising $1 billion. Despite the challenges, these deals underscored the resilience and attractiveness of the US market for venture capital investments.
