Link to the original article: Mid-Q2’22 Report: State of Venture
Following a cool down in global funding in Q1’22, global venture investment has continued to decline in Q2’22 so far, with quarterly falls in dollars, exits, and unicorn births in sight.
Global venture funding fell to $142.4B in Q1’22, down by a fifth from the previous quarter’s total.
As economic uncertainty lingers on and investors tighten their belts, the private market’s downward trajectory appears to be continuing full force in Q2’22. In fact, at the current pace of activity, global funding for the second quarter is projected to decrease by 19% quarter-over-quarter.
Deal activity is trending down as well — deals are on track for a 22% drop from Q1’22, a 7-quarter low for global venture deals.
While markets could shift meaningfully during the second half of the quarter as both economic and geopolitical events unfold, assuming these investment trends continue, Q2’22 will see the lowest total for quarterly funding since the end of 2020. Other notable Q2’22 venture activity projections include:
- US deals and dollars are going down. US venture funding is projected to drop 13% in Q2’22, while deals are expected to decline by 22%. US companies are on track to raise $61B this quarter, the lowest total since 2020.
- Mega-rounds (deals worth $100M+) are projected to account for $61B of funding by the end of Q2’22, which would mark an 18% drop QoQ.
- Global funding for retail tech is on pace to drop by 50% in Q2’22, with fintech and digital health showing a QoQ decline of 28% and 25%, respectively.
- The IPO market is decelerating. The total number of companies going public in Q2’22 is projected to reach 92, marking a 9-quarter low and a 34% drop QoQ. US-based startups are expected to account for 20 of these IPOs, down 13% QoQ.
- M&A activity has not been spared from the slowdown; there is projected to be a 22% drop in global M&A activity in Q2’22. A similar trend is being seen in the US, where M&A deals are on pace to fall by 25% QoQ.
- The unicorn club is becoming a bit more exclusive. Quarterly unicorn births are on track to fall below 100 for the first time since 2020, with 62 unicorns projected to emerge in Q2’22.
