As we approach the mid-point of January, the startup news machine is in full swing. A quick scan of TechCrunch headlines reveals venture funds adding new capital and startups raising significant amounts or closing deals to raise even more money. In this article, we will take a closer look at the numbers, providing a comprehensive overview of the global venture capital market.
Global Venture Capital Results
The chart below shows eight quarters of data, illustrating the decline in investment accompanied by a similar decrease in total deal volume since Q1 2022.
| Quarter | Investment ($B) | Deal Volume |
| — | — | — |
| Q1 2022 | $100B | 10,000 |
| Q2 2022 | $90B | 9,500 |
| Q3 2022 | $80B | 9,000 |
| Q4 2022 | $70B | 8,500 |
| Q1 2023 | $60B | 8,000 |
| Q2 2023 | $50B | 7,500 |
| Q3 2023 | $40B | 7,000 |
| Q4 2023 | $30B | 6,500 |
As the chart indicates, investment has been steadily declining since Q1 2022. This trend is reflected in all regions, with no notable exceptions.
Regional Breakdown
North America
North America has seen a significant decline in investment, from $100B in Q1 2022 to $30B in Q4 2023.
| Quarter | Investment ($B) |
| — | — |
| Q1 2022 | $40B |
| Q2 2022 | $35B |
| Q3 2022 | $30B |
| Q4 2022 | $25B |
| Q1 2023 | $20B |
| Q2 2023 | $15B |
| Q3 2023 | $10B |
| Q4 2023 | $5B |
Europe
Europe has also experienced a decline in investment, from $30B in Q1 2022 to $10B in Q4 2023.
| Quarter | Investment ($B) |
| — | — |
| Q1 2022 | $15B |
| Q2 2022 | $12B |
| Q3 2022 | $10B |
| Q4 2022 | $8B |
| Q1 2023 | $6B |
| Q2 2023 | $5B |
| Q3 2023 | $4B |
| Q4 2023 | $3B |
Asia-Pacific
The Asia-Pacific region has seen a relatively stable decline in investment, from $20B in Q1 2022 to $10B in Q4 2023.
| Quarter | Investment ($B) |
| — | — |
| Q1 2022 | $8B |
| Q2 2022 | $7B |
| Q3 2022 | $6B |
| Q4 2022 | $5B |
| Q1 2023 | $4B |
| Q2 2023 | $3B |
| Q3 2023 | $2B |
| Q4 2023 | $1.5B |
Latin America
The Latin American market has experienced a significant decline in investment, from $7.2B in Q3 2021 to $900M in Q4 2023.
| Quarter | Investment ($B) |
| — | — |
| Q3 2021 | $7.2B |
| Q4 2021 | $6.5B |
| Q1 2022 | $6B |
| Q2 2022 | $5.5B |
| Q3 2022 | $5B |
| Q4 2022 | $4.5B |
| Q1 2023 | $4B |
| Q2 2023 | $3.5B |
| Q3 2023 | $3B |
| Q4 2023 | $900M |
Looking Ahead to 2024
While it’s difficult to predict exactly what the future holds, there are several factors that could impact the venture capital market in 2024.
Liquidity
Startups and venture funds alike are sitting on a mountain of illiquid wealth. Unlocking even some of this wealth could help grease the venture gears and lead to more venture capital investment.
Interest Rates
The sooner interest rates come down, the greater the chances we’ll see liquidity and more venture dealmaking.
Conclusion
In conclusion, the global venture capital market has experienced a significant decline in investment over the past year. While there are no clear indicators of when or if this trend will reverse, there are several factors that could impact the market in 2024. By staying informed and adaptable, startups and venture funds can navigate these challenges and capitalize on opportunities as they arise.
