TLDR:
- CVC deals and dollars have fallen to multi-year lows due to volatile tech market
- Fewer new Corporate VCs are emerging, with just 162 founded in 2023 – a 6-year low
In a recent report from CBInsights, it was noted that the corporate venture capital market has significantly shrunk as industry participants shield themselves from the unpredictable tech market. In 2023, CVC deals fell to 3,545 – the lowest level since 2019, marking a 32% decrease year-over-year. The decline in funding with CVC participation has been especially noticeable, while dealmaking remains above the levels seen in 2019. The US has been hit hard by the CVC retreat, with deal volume declining to a 6-year low in Q4’23, driving the US’ share of CVC deals down to just 29% among global regions – the lowest point in over a decade. Despite the overall decline in CVC activity, a generative AI company called Aleph Alpha took the top CVC-backed deal in Q4’23 by raising a $500M round. Early-stage deal share has remained at an all-time high of 63% for the past 2 years, showcasing sustained interest from CVCs in the earliest stages of startups. In a related update, Insurtech funding and deals also saw a decline in 2023, reaching 6-year lows – in line with the broader venture slowdown, as noted by CBInsights. However, early-stage insurtechs have displayed resilience, with the median early-stage deal size holding steady in 2023 compared to 2022.
