VC Funding Crashing Despite Tech Surge

Global venture capital funding has declined sharply year-over-year amid the high-interest rate environment despite the massive run-up in technology stocks.

U.S. venture capital funding for startups fell 43.6% to $99 billion across the first nine months of this year, compared with the same period in 2022, research from London-based data analytics and consulting company GlobalData showed.

Deal volume was down more than 40% compared with the approximately 9,900 deals completed in the first nine months of last year.

“Despite witnessing a significant decline in VC funding activity in 2023, the U.S. outpaced other countries by a wide margin in terms of both deal volume and value during January-October 2023,” said Aurojyoti Bose, lead analyst at GlobalData.

In the UK, about 1,100 venture capital deals totaling $12 billion were announced between January and October – with deal volume falling 26%.

VC funding in China for the period fell 29.1% to $34.6 billion from a year ago, with volume down 15.7%.

The US accounted for 35% of the total number of VC funding deals announced globally during January to October 2023. Its share of the total disclosed funding value stood at 48.8%.

Notable U.S. funding deals included the $6.5 billion raised by Stripe, $1.3 billion secured by Inflection AI, and big investments in Metropolis Technologies, Redwood Materials and Stack AV.