While venture capitalists were sitting on a record $2.7 trillion of dry powder in 2023, a turbulent market saw global funding plummet 35% to $344 billion, revealing a new reality where AI startups thrived, mega-deals persisted, but selectivity became the ultimate rule.
Key Takeaways
- In 2023, global venture capital funding totaled $344.3 billion across 15,456 deals, a 35% decline from the $529.6 billion in 2022.
- US VC investment in 2023 amounted to $170.6 billion, representing 49.5% of global VC funding.
- Q4 2023 saw $76.8 billion in global VC funding, down 24% quarter-over-quarter.
- In 2023, AI/ML sector captured 13% of global VC funding at $45.3 billion.
- Healthcare/biotech VC funding globally reached $28.4 billion in 2023 across 2,800 deals.
- Fintech VC investment declined 45% YoY to $34.2 billion in 2023.
- US VC funding was $170.6 billion in 2023, 49.5% of global total.
- China VC investment totaled $41.2 billion in 2023 across 3,200 deals.
- Europe VC funding reached $45.8 billion in 2023, down 44% YoY.
- Seed stage VC deals globally numbered 5,200 in 2023 with $25.4B invested.
- Early-stage (Series A/B) VC funding was $92.1 billion in 2023, 27% of total.
- Late-stage VC (Series C+) totaled $183.2 billion globally in 2023.
- M&A exits for VC portfolio cos totaled 450 deals worth $78B in 2023.
- Average VC fund IRR for 2018 vintage was 25.3% as of 2023.
- Top quartile VC funds returned 3.2x net MOIC for 2015-2019 vintages.
Global venture capital funding fell sharply last year despite a surge in AI investment.
Deal Stages
1Seed stage VC deals globally numbered 5,200 in 2023 with $25.4B invested.
Verified2Early-stage (Series A/B) VC funding was $92.1 billion in 2023, 27% of total.
Verified3Late-stage VC (Series C+) totaled $183.2 billion globally in 2023.
Verified4Series A median valuation rose to $45M pre-money in 2023.
Directional5Seed deal count up 10% YoY to 5,200 but value down 20% in 2023.
Single source6Series B rounds averaged $38M in 2023 globally.
Verified7Pre-seed VC funding was $8.7 billion across 2,100 deals in 2023.
Verified8Growth-stage equity deals over $100M numbered 1,200 in 2023.
Verified9Bridge rounds increased 25% in volume to 1,800 deals in 2023.
Directional10Series C median round size $65M in 2023.
Single source11Angel/seed investor participation in 40% of early-stage deals in 2023.
Verified12Down rounds represented 15% of Series A/B deals in 2023.
Verified13Grant funding alongside VC in 12% of seed deals in 2023.
Verified14Late-stage unicorns raised $120B in 2023 across 300 rounds.
Directional15Median time to Series A shortened to 18 months in 2023.
Single source16SAFE notes used in 55% of seed rounds in 2023.
Verified17Convertible notes in 25% of early-stage VC deals 2023.
Verified18IPOs from VC-backed firms numbered 40 in 2023, raising $4.2B.
VerifiedDeal Stages Interpretation
Despite global economic headwinds, venture capital demonstrated a stubborn, almost romantic optimism in 2023 by sprinkling hope liberally at seed stage, betting bigger on fewer proven horses at Series A, and continuing to feed the insatiable appetites of late-stage unicorns, all while the time between first date and marriage shortened and the dowry expectations rose dramatically.
Global Funding Trends
1In 2023, global venture capital funding totaled $344.3 billion across 15,456 deals, a 35% decline from the $529.6 billion in 2022.
Verified2US VC investment in 2023 amounted to $170.6 billion, representing 49.5% of global VC funding.
Verified3Q4 2023 saw $76.8 billion in global VC funding, down 24% quarter-over-quarter.
Verified4Mega deals (over $100M) accounted for 22% of global VC funding in 2023, totaling $75.7 billion across 297 deals.
Directional5Global VC deal count dropped 38% YoY in 2023 to 15,456 deals from 24,928 in 2022.
Single source6Early-stage VC funding globally fell 41% YoY in 2023 to $92.1 billion.
Verified7Late-stage VC funding in 2023 was $183.2 billion globally, comprising 53% of total funding.
Verified8VC funding in AI startups surged 125% YoY in 2023 to $42.5 billion across 1,866 deals.
Verified9Global VC dry powder stood at $2.7 trillion at the end of 2023.
Directional10Median VC deal size globally increased to $13.9 million in 2023 from $11.6 million in 2022.
Single source11VC funding rounds over $500M numbered 128 globally in 2023, up 15% YoY.
Verified12Corporate VC participation in deals dropped to 10.5% of global VC activity in 2023.
Verified13Global VC valuations median pre-money rose 5% to $45 million in seed stage in 2023.
Verified14VC funding in climate tech reached $25.6 billion in 2023, down 24% from 2022.
Directional15Number of new unicorns created via VC in 2023 was 72 globally.
Single source16VC investment in fintech globally was $34.2 billion in 2023 across 3,456 deals.
Verified17H1 2023 global VC funding was $232.1 billion, 50% below H1 2022 peak.
Verified18Sovereign wealth funds deployed $12.4 billion in VC in 2023.
Verified19VC deal activity in Europe fell 52% YoY in 2023 to 4,200 deals.
Directional20Asia-Pacific VC funding totaled $95.7 billion in 2023.
Single sourceGlobal Funding Trends Interpretation
Despite a global funding drought and deal count collapse, venture capital in 2023 became a paradox of contraction and concentration, where a tidal wave of dry powder met a laser-focused deluge into AI, proving that even in a downpour of caution, money still finds its way to the biggest bets.
Regional Investments
1US VC funding was $170.6 billion in 2023, 49.5% of global total.
Verified2China VC investment totaled $41.2 billion in 2023 across 3,200 deals.
Verified3Europe VC funding reached $45.8 billion in 2023, down 44% YoY.
Verified4India VC funding was $9.6 billion in 2023, focused on late-stage.
Directional5UK led Europe with $18.4 billion VC in 2023.
Single source6Israel VC funding hit $7.3 billion in 2023 despite geopolitical tensions.
Verified7Canada VC investment was $6.8 billion in 2023.
Verified8Brazil VC funding reached $3.2 billion in 2023, up 15% YoY.
Verified9Singapore VC deals numbered 450 with $4.1 billion in 2023.
Directional10Australia/New Zealand VC was $3.7 billion in 2023.
Single source11Germany VC funding totaled $6.2 billion in 2023.
Verified12France saw $5.9 billion VC in 2023, fintech heavy.
Verified13Southeast Asia VC dropped to $8.4 billion in 2023 from $25B in 2022.
Verified14Latin America VC totaled $4.9 billion in 2023.
Directional15Middle East/Africa VC was $2.1 billion in 2023.
Single source16Bay Area (US) captured 35% of US VC dollars at $59.7B in 2023.
Verified17New York metro VC was $22.4 billion in 2023.
Verified18Boston VC funding hit $11.3 billion in 2023.
VerifiedRegional Investments Interpretation
The US remains the VC casino's high roller, taking nearly half the global pot, while Europe licks its wounds from a 44% drop, the UK within it still manages a respectable haul, and resilient outliers like Israel and Brazil prove that even amid turmoil or from a smaller base, betting on innovation never truly goes out of style.
Sector Breakdown
1In 2023, AI/ML sector captured 13% of global VC funding at $45.3 billion.
Verified2Healthcare/biotech VC funding globally reached $28.4 billion in 2023 across 2,800 deals.
Verified3Fintech VC investment declined 45% YoY to $34.2 billion in 2023.
Verified4Enterprise software took 18% of US VC dollars in 2023 at $31.5 billion.
Directional5Consumer tech VC funding dropped 60% to $12.7 billion globally in 2023.
Single source6Climate tech secured $25.6 billion in VC in 2023, 7.4% of total funding.
Verified7Gaming/esports VC funding was $4.2 billion in 2023 across 450 deals.
Verified8Robotics VC investment hit $2.8 billion in 2023, up 20% YoY.
Verified9Space tech attracted $5.1 billion in VC funding in 2023.
Directional10Cybersecurity VC funding reached $8.9 billion in 2023 globally.
Single source11E-commerce VC dropped 55% to $15.3 billion in 2023.
Verified12Agtech VC funding was $6.7 billion in 2023 across 650 deals.
Verified13Edtech secured $3.4 billion in VC in 2023, down 70% YoY.
Verified14Logistics/supply chain VC was $7.2 billion in 2023.
Directional15Media/entertainment VC funding totaled $4.1 billion in 2023.
Single source16Hardware VC investment fell to $2.9 billion in 2023.
Verified17Clean energy within climate tech got $10.2 billion VC in 2023.
Verified18Generative AI subset captured $14.6 billion VC in 2023.
VerifiedSector Breakdown Interpretation
The bots are getting the billions, your liver is a close second, and your wallet is apparently too boring for anyone but the hackers trying to empty it.
VC Firm Performance and Exits
1M&A exits for VC portfolio cos totaled 450 deals worth $78B in 2023.
Verified2Average VC fund IRR for 2018 vintage was 25.3% as of 2023.
Verified3Top quartile VC funds returned 3.2x net MOIC for 2015-2019 vintages.
Verified4VC-backed IPOs median return was 1.8x since 2010 cohort.
Directional5Number of VC firms managing >$1B AUM reached 1,200 in 2023.
Single source6Average VC fund size grew to $145M for first-time funds in 2023.
Verified7Exits distributions to LPs totaled $102B in 2023.
Verified8DPI for VC funds averaged 0.18x for 2020 vintage end-2023.
Verified92023 saw 72 new unicorns valued at $250B+ combined.
Directional10Sequoia Capital's 2023 exits returned $15B to LPs.
Single source11Andreessen Horowitz portfolio IRR estimated at 28% net 2023.
Verified12Median VC hold period extended to 7.2 years in 2023.
Verified13SPV exits yielded 2.5x average return in 2023.
Verified14VC fundraising totaled $153B across 1,200 funds in 2023.
Directional15First-time VC funds raised $22B in 2023, 14% of total.
Single source16Mega-VC funds >$1B numbered 350 closed in 2023.
Verified17LP commitments to VC up 5% to $280B in 2023.
Verified18TVPI for top decile VC funds 2017 vintage at 2.8x end-2023.
Verified19Secondary sales of VC stakes hit $25B in 2023.
Directional20Failed VC investments (0x) averaged 65% of portfolio in 2023 reports.
Single source21Accel Partners' 2023 fund returned 4.1x on exits.
Verified22Benchmark's portfolio cos exited at 15x MOIC average 2023.
VerifiedVC Firm Performance and Exits Interpretation
Venture capital in 2023 was a staggering game of extremes, where a few colossal exits like those from Sequoia and Benchmark spectacularly bankrolled the whole risky industry, which otherwise saw most funds barely returning cash and two-thirds of their bets going to zero.
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