Venture capital (VC) funding activity in the United States experienced a notable year-on-year decline during the January-July period of 2023, according to a report from GlobalData, a prominent data and analytics company.
The report highlights a 37.4 percent decrease in the number of VC funding deals announced in the US, dropping from 7,379 deals in the same period of 2022 to 4,617 deals in 2023.
An in-depth analysis of GlobalData’s Financial Deals Database indicates an even more substantial decline of 50.6 percent in the disclosed funding value for these VC deals. The funding value plummeted from $141.2 billion in January-July 2022 to $69.8 billion in the corresponding months of 2023.
Aurojyoti Bose, Lead Analyst at GlobalData, attributes the decline to a combination of factors including increased interest rates, escalating inflation, and ongoing geopolitical tensions. This multifaceted environment seems to have cast a sense of caution among investors, leading to a decline in significant investments.
Despite the challenges, the report highlights several notable VC funding deals that took place during the January-July 2023 period. Some of these include a substantial $6.5 billion raised by Stripe, $1.3 billion secured by Inflection AI, $500 million each by Rippling and Sandbox AQ, as well as $450 million secured by Anthropic, and $400 million raised by Lvrch Capital Advisory.
Bose emphasizes the global nature of cautious investor behavior, resulting in a decline in VC funding. However, the US remains a dominant player on the global VC funding landscape in terms of both deal volume and value. The US accounted for a significant 36.8 percent of the total number of VC funding deals announced globally during the January-July 2023 period. Additionally, it maintained a share of 49.4 percent in the corresponding disclosed funding value, underscoring its continued influence in the VC funding realm.