TLDR:
- Global startup funding dropped by 38% in 2023 compared to the previous year.
- Early-stage, late-stage, and seed funding all saw substantial declines, indicating caution among investors.
- The US experienced a 37% decline in total funding, while Europe saw a similar decline.
- Asia was the only region to see an increase in exit value, generating over $143 billion.
- Investment into VC funds also dropped significantly in 2023.
Global startup funding suffered a sharp decline of 38% in 2023 compared to the previous year, with funding dropping to $285 billion, according to reports from PitchBook-NVCA Venture Monitor and Crunchbase. This decline was evident across all stages of funding, including early-stage, late-stage, and seed funding, indicating a general sense of caution among investors. The US, traditionally the biggest contributor to venture capital funding, saw a 37% decline in total funding, with a stark decrease in VC deal activity and a significant drop in annual exit value. Europe also experienced a decline in investment and dealmaking. However, the Asia region bucked the trend and generated more than $143 billion in exit value.
Investment into VC funds also saw a significant drop in 2023. After a record year in 2022, the US only committed $66.9 billion to VC funds in 2023, the lowest since 2017. Globally, the figure was $160 billion, a decrease of $200 billion from the previous year. These lower investment amounts are likely to hamper dealmaking in 2024.
While the overall funding landscape was challenging, certain sectors showed resilience and growth. Artificial intelligence (AI) startups stood out in 2023, raising close to $50 billion, a modest increase from the previous year. However, the “next big thing” in tech, Web3, saw a 73% decrease in investment compared to the previous year.
