U.S. VC investments and exits plummeted in 2022 | NVCA – VentureBeat
Check out all the on-demand sessions from the Intelligent Security Summit here.
The deal count in 2022 for the full year was 15,852, down 14% from 18,521 in 2021. And deal value was $238.3 billion, down 30% from $344.7 billion a year earlier, according to a report by Pitchbook and the National Venture Capital Association (NVCA).
U.S. VC exit activity was 1,208 deals valued at $71.4 billion, down dramatically from 1,925 deals valued at $753.2 billion a year earlier
With each quarter the deal activity declined and that could foreshadow a slide in 2023, the report said.
On an annual basis, angel- and seed-stage deal activity remained relatively resilient in 2022, with $21.0 billion invested across an estimated 7,261 deals. However, the four consecutive quarters of declining deal counts could foreshadow a continued slide in 2023. Seed-stage deal sizes and pre-money valuations demonstrated notable growth over the 2021 figures due in part to a large number of actively investing micro-funds as well as the participation of nontraditional and crossover investors.
Event
Intelligent Security Summit On-Demand
Learn the critical role of AI & ML in cybersecurity and industry specific case studies. Watch on-demand sessions today.
Watch Here
Should the economic downturn continue, the NVCA expects this stage to start to feel pressure due to declining deal activity and investor demand in the early and late stages.
Exit values of 2022.
Nontraditional investors are slowing their capital deployment to VC amid less attractive risk/return profiles. Relative to 2021, the upside potential for the VC asset class declined significantly in 2022, which turned many investors away from the space. As such, just $24.1 billion in deal value involved nontraditional investors in Q4— the lowest quarterly value in three years. Not only are we seeing lower deal value, but we are also seeing fewer nontraditional participants within the venture ecosystem.
Exit activity continued its steep descent in 2022, with just $71.4 billion in total exit value generated—the first time this figure has dipped below $100 billion since 2016. Public exits of VC-backed companies have slowed to almost nonexistent levels, with just 14 public listings occurring in Q4, demonstrating how drastically institutional-investor appetite has been affected by rising interest rates and volatile macroeconomic factors.
Acquisition activity has also declined significantly; Q4 posted roughly $763 million in total acquisition deal value, the first time we have seen this quarterly total fall below $1 billion in more than a decade.
VCs raised more money than ever in 2022.
VCs still raised a record $162.6 billion across 767 funds, hitting a record for the second straight year exceeding $150 billion.
The year saw an increasing amount of capital concentrated in …….