US Startup Ecosystem Sees Sharp Decline in VC Funding Activity in 2023’s First Three Quarters

The startup ecosystem in the United States experienced a significant downturn in venture capital (VC) funding activity during the first three quarters (Q1-Q3) of 2023, according to GlobalData.
VC funding for tech
A total of 5,448 VC funding deals with a disclosed value of $89.3 billion were announced in the US during this period. This reflects a substantial year-on-year (YoY) decline of 40.3 percent in terms of VC funding deals volume, with the corresponding disclosed investment value witnessing a notable fall of 45.6 percent.

A thorough analysis of GlobalData’s Financial Deals Database revealed that in the same period of 2022 (Q1-Q3), the US saw a total of 9,132 VC funding deals, with a disclosed value amounting to $164.3 billion.

Aurojyoti Bose, Lead Analyst at GlobalData, remarked on the situation, stating: “VC funding activity suffered a significant setback across most markets globally, including the US, due to macroeconomic challenges, ongoing conflicts, and uncertain market sentiments affecting investor confidence. However, despite the subdued sentiment, the US maintained its position as the favorite destination for investors, accounting for the highest share of deal volume and value during Q1-Q3 2023.”

During Q1-Q3 2023, the US held a 35.6 percent share of the total number of VC funding deals announced worldwide, with a corresponding share of the deal value reaching 48.8 percent.

Noteworthy VC funding deals in the US during Q1-Q3 2023 include Stripe securing $6.5 billion, Inflection AI raising $1.3 billion, Redwood Materials obtaining $1 billion in funding, and Stack AV securing $1 billion in funding, among others.