The pace at which startups raise rounds worth $100 million or more, slows, according to early data.
Looking at historical periods going back a year, Marketingwithanoy’s analysis of Pitchbook data shows that the second quarter of 2022 is on pace to undercut the number of so-called mega-rounds in the first quarter. And data from Crunchbase shows a similar decline.
If you consider that there were fewer rounds worth $100 million or more in the first quarter of 2022 than both in the last two quarters of 2021, we see a slowdown in private market investment at a late stage.
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It’s no surprise that fewer large venture capital rounds are taking place. In fact, we anticipated it, given the cuts we’ve seen in software valuations in general, and the fact that the risk environment for private market closings has become more conservative in recent months. A massive sell-off in the public market coupled with geopolitical instability and inflationary concerns will do just that.
As the late-stage venture capital market becomes more stable, the crypto world is seeing immense deals raking in hundreds of millions of dollars. The contrast is remarkable. Let’s talk about it.
It’s still a good time to increase grand rounds
What makes it difficult to break through the changing venture capital market is the fact that we are hitting record highs. So while the data indicates that there were between 100 and 132 venture rounds worth $100 million or more in the second quarter of 2022 (PitchBook and Crunchbase data, respectively), we need to understand that there is still a lot of money today. flows compared to historical standards, even if the numbers represent a short-term decline.
In retrospect, it seems clear that 2021 will prove to be a high point for venture capital activity for some time to come. There’s little indication that 2022 will be able to beat last year’s figure, and with economic clouds on the horizon, anyone who bets 2023 will be lit up straight is against the prevailing wisdom.