TLDR:
- VC-backed ecommerce investment saw increases in deal count and value in Q4 2023, but overall numbers for the year were down.
- Research from PitchBook.com suggests that the heyday of easy ecommerce investment might be over for good.
In a new report, it has been highlighted that the days of easy ecommerce investment dollars may have come to an end. According to research from PitchBook.com, which tracks venture capital-backed investment in digital technologies, VC funding for ecommerce saw an increase in deal count and value in the fourth quarter of 2023. However, the total numbers for the year were down compared to previous years. The report suggests that the conditions that led to a surge in ecommerce funding during the COVID-19 lockdown are now behind us, and the sector may not return to previous funding levels for some time.
In Q4 2023, the ecommerce technology market experienced a modest increase in venture-backed deal count, with 116 deals valued at $3.8 billion. Although the deal count was only up 2.7% quarter-over-quarter, the total value of those deals rose by 105.4%. However, for the full year, investors funded 471 deals valued at $11.7 billion, marking a 30.4% decrease year over year.
The report also noted that exits remain challenging, and the window for initial public offerings is largely closed. The most active companies in ecommerce investment deals since 2019 include Walmart, Cart.com, Shopify, AppHub, PayPal Holdings, BigCommerce, PDI Technologies, Ascential Group, Nielsen/Q, and Lightspeed.
Overall, the report suggests that the ecommerce investment landscape has shifted, and companies seeking funding may face more challenges in the current market.
