Infographic – Q1 2023 Venture Funds Hunker Down

Click on image for full-size view (Crunchbase)

8 Apr. 2023. While venture investment dollars worldwide edged higher in the first three months of 2023, the number of deals continued to slide from the previous quarter. Crunchbase News says this week global venture capital from January through March 2023 remained largely in a holding pattern, with only investments in artificial intelligence start-ups showing a glimmer of greater investor interest.

In the first quarter, venture investors placed $75.7 billion in new technology companies worldwide, a gain of 1 percent from the 74.8 billion invested in the previous three months, but that’s a drop of 53 percent from the first quarter of 2022. Throughout 2022 investment dollar totals declined each quarter from the all-time high of $183.5 billion in the fourth quarter of 2021. In an historical context, the nearly $76 billion invested in Q1 2023 is comparable to the global investment total in Q1 2020, before the Covid-19 pandemic took hold.

The number of global venture deals, however, continued to decline in the first quarter to 5,959 from 6,986 in the previous three months, a drop of 15 percent, and 55 percent lower than 10,843 transactions in the first quarter of 2022. A majority of venture deals in Q1 2023, 64 percent, went to seed and angel-stage investments for companies in their earliest stages, a slight decline from the two-thirds (66%) in Q4 2022.

Yet venture investors continue to raise funds for the future. Crunchbase News reports investors still hold $580 billion in their accounts, according to industry estimates, despite the slow funding deployment. Plus, start-ups developing artificial intelligence applications appeared to generate investor interest. Crunchbase says A.I.-related investments accounted for nearly one in five of investment dollars in Q1 2023. Although a large chunk of that total was Microsoft’s $10 billion investment in OpenAI, other A.I. start-ups received substantial venture funding, including $500 million for Sandbox AQ, developer of quantum computing and A.I. systems, reported by Science & Enterprise in Feb. 2023.

More from Science & Enterprise:

• Infographic – A.I. Venture Funds Tick Up in Q4 2022
• Infographic – Corp. Venture Investments Dip in 2022
• New Venture Funds to Back Life Science, Tech Start-Ups

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