Despite a surge in energy trade, global investment continues to decline.
US leads overall investment with $36.2 billion, followed by Asia with $22.6 billion
Europe was the hardest hit, with VC investment dropping from $21.2 billion to just $12.9 billion in Q4 2022.
Global funding likely to remain subdued through Q1-2023
London, 18 January 2023–(BUSINESS WIRE)–Global venture capital investment in Q4 2022 fell for the fourth straight quarter, to 1,022 in 9,767 deals, according to the latest report from KPMG Private Enterprise Venture Pulse. billion to $75.6 billion on 7,641 deals. Global investment fell to its lowest level since the second quarter of 2019.
Declines despite large deals in the energy sector, including alternative energy vehicles, battery technology, and alternative generation and distribution technologies, as governments seek to ensure energy self-sufficiency and meet their climate commitments. it’s happening
The Americas and Asia accounted for the largest share of VC investment globally during Q4 2022, capturing the largest number of deals during the quarter. Even though he won three mega-deals worth more than $500 million in the entire quarter, the US recorded the largest percentage of investments, followed by Asia. Top deals from China include GAC Aion ($2.56 billion) and SHEIN ($1 billion), while the largest U.S. deals include Anduril ($1.48 billion) and TerraPower ($830 million). ) It is included.
“Overall investment continued to decline in the quarter, falling to its lowest level since the second quarter of 2019. It’s hurting venture capital investment.” connor moore Head of KPMG Private Enterprise in the Americas Region, Co-Leader of KPMG Private Enterprise Emerging Giants Network, KPMG International“However, investment in new energy and electric vehicle ecosystems is encouraging as venture capitalists continue to work with government initiatives and incentives in those areas deemed essential for energy self-sufficiency. It continues to be on a higher level.”
Large rounds by alternative energy companies include US-based nuclear reactor company TerraPower ($830 million), China-based SPIC Hydrogen Energy ($631 million) and Estonia-based Renewal Includes renewable energy developer Sunly ($196 million) and Belgium-based hydrogen energy company Tree Energy. Solution ($122 million).
Investments in the electric vehicle sector have overwhelmed most other sectors, with Chinese electric vehicle maker GAC Aion ($2.56 billion), US-based battery technology company Form Energy ($450 million), It included a major funding round by China-based Voyah Car Technology ($630 million). ), U.S.-based battery maker Group14 Technologies ($614 million), and Swedish electric vehicle company Einride ($500 million).
Key Highlights – Q4 2022
Global VC investment in Q4 2022 fell from $102.2 billion in 9,767 deals in Q3 2022 to $75.6 billion in Q4 2022 with 7,641 deals.
VC investment in the Americas fell from $49.6 billion in 4,022 deals in Q3 2022 to $39.2 billion in 3,322 deals in Q4 2022, with $36.2 billion invested in the US it was done.
VC investment in Asia fell from $30.4 billion in 3,052 deals in Q3 2022 to $22.6 billion in Q4 2022 with 2,157 deals.
European VC investment fell from $21.2 billion in 2,476 deals compared to $12.9 billion in 1,936 deals in Q4 2022.
Corporate VC investment decreased for four consecutive quarters. Total CVC-related investments fell from $108 billion in Q4 2021 to $36.5 billion in Q4 2022.
Exit volumes have fallen dramatically year-over-year, from $1,427 billion on 4,174 exits in 2021 to just $308.8 billion on 2,997 deals in 2022. The decline was most pronounced in the US, where total exits fell from $753.2 billion to just $71.4 billion.
“Dry powder” maintained its all-time high. Over the course of the year, VC firms raised over $250 billion for him. This is his third highest total in the last ten years. The U.S. led the way, raising a record $162 billion in 2022, but with much less funding.
Dry powder expected to help maintain stability in VC market despite growing uncertainty
Heading into Q1 2023, venture capital investment is expected to remain subdued globally, with consumer-centric companies expected to bear the heaviest burden. Especially in the US, the IPO window is likely to remain closed until 2023 and is unlikely to fully reopen in the first half of this year. As companies run out of cash, the number of down rounds will increase and M&A activity may increase.
“Globally, valuations continue to come under downward pressure in early 2023, with many companies postponing their fundraising efforts in hopes of better times ahead. Jonathan Lavender, Global Head, KPMG Private Enterprise, KPMG International“However, given the finite amount of time these companies can hold out, we expect more down rounds in the first half of 2023 as companies begin to run out of cash on hand.”
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Daniel Caines, Senior Manager, Global External Communications, KPMG International
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