Venture capital (VC) funding activity in the US experienced a significant decline from January to May 2023.
A total of 3,532 VC funding deals of worth $55.3 billion “were announced in the US during the period.” This represents “a year-on-year (YoY) decline of 36.4% in terms of volume announced and a massive 50.2% in terms of value,” according to GlobalData, a data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals “that a total of 5,552 VC funding deals of $111.1 billion were announced during January-May 2022.”
Despite the decline, the US continued “to account for the highest number of VC funding deals announced globally from January to May 2023.” Moreover, it also “held more than half of the total funding raised globally.”
Aurojyoti Bose, Lead Analyst at GlobalData, comments:
“Although, the US continues to dominate the global VC funding landscape, it is not immune to the macroeconomic headwinds, which are making a dent in investor sentiments globally.”
The US accounted “for 38.8% of the total number of VC funding deals announced globally from January to May 2023 while its share in terms of the corresponding deal value stood at 52.6%.”
Bose concludes:
“The decline in VC funding in the US indicates the conservative approach of investors amid market uncertainties including rising interest rates, inflation, recession fears and geopolitical tensions. The decline being prominent in terms of value also validates investors’ aversion to commit high-value investments amid volatile market conditions.”
As clarified in the update, historic data “may change in case some deals get added to previous months because of a delay in disclosure of information in the public domain.”
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