Link to PDF: Q3 2022 PitchBook-NVCA Venture Monitor First Look
First look
• Deal activity across all stages is showing more signs of distress, recording the third consecutive decline in completed deals. Estimated deal count in Q3 (4,074) is off by almost 20% from the quarterly record high recorded in Q1 (5,049) and is the lowest count seen in any quarter since Q4 2020 (3,364). Q3 saw $43.0 billion invested in VC deals across all stages, a nine-quarter low, cementing a tone of investor hesitancy and increased focus on business fundamentals amid the global economic downturn, even if the numbers remain high on a historical basis.
• US VC fundraising has set a new annual high through only three quarters of 2022. US-based VC funds have raised $150.9 billion, surpassing last year’s previous record and taking the 21-month fundraising total above $298.1 billion. Given public market turbulence and frozen avenues for liquidity, we expected LPs to be concerned about their overexposure to this asset class and the potential for timely returns negatively impacting fundraising activity. Entering the second half of the year, we are finally beginning to see that momentum atrophy, as just $29.4 billion in fundraising was added to the dataset since our Q2 report, the lowest quarterly total this year.
• With just $14.0 billion in exit value generated across an estimated 302 exits in Q3, there were few bright spots for the VC exit market. These figures are in line with exit activity expectations around 2014 and well off the highs seen in 2021—$266.8 billion in exit value was generated in Q2 that year. A highlight of the quarter is surely Adobe’s announced $20 billion acquisition of Figma, a developer of a web-based design platform—the deal is not yet closed. Few options remain for the growing group of unicorns, as 2022 has produced only 60 public listings, just one year after a record 303 VC-backed public listings generated $670.0 billion in exit value. With the expectation that the current slow environment will remain, this year’s total exit value is in danger of falling below $100 billion for the first time since 2016.
