TLDR:
- The venture capital market has been greatly impacted by the rise of interest rates, leading to a dry up of exits and a mismatch in company valuations.
- Exits in 2023 totaled $61.5 billion, a decrease from $75 billion in 2013.
- Startup valuations have fallen significantly since 2020-2021, but it is unclear if they have hit bottom.
- The closure of the IPO market and decrease in mega-deals has caused a decline in funding and startup layoffs.
- Companies founded by women are still raising more capital, but fewer deals are being done overall.
New data from PitchBook reveals the negative impact of rising interest rates on the venture capital market. The numbers show a significant decrease in exits and a discrepancy in startup valuations. In 2023, only $61.5 billion was retrieved from exits, a decrease from $75 billion in 2013. The question remains whether startup valuations have hit bottom, as they have fallen but not much further from 2020-2021 levels. The prolonged closure of the IPO market and reduced number of mega-deals have resulted in less funding and layoffs at startups. However, there is some positive news for women-founded companies, as they are raising more capital compared to pre-COVID levels. Despite this, fewer deals are being completed overall.
