Global VC market falls to $57.3 bn in Q1, expected to remain weak in Q2

New Delhi, April 21 Global VC investment sank from $86 billion across 9,619 deals in Q4 2022 to $57.3 billion across 6,030 deals in Q1 2023 as major uncertainties in the market showed no sign of waning, a report showed on Friday.

Every region saw VC investment fall to levels not seen in years during Q1 2023.

The $33.1 billion raised in the Americas was the lowest level since Q1 2018, while the $9.8 billion raised in Europe was the lowest since Q3 2018, and the $13.5 billion raised in Asia was the lowest since Q2 2015, according to the 'Venture Pulse' report by KPMG Private Enterprise.

"While VC investment globally is expected to remain weak in Q2 2023, one area we expect to see pick-up is in the area of generative AI," said Jonathan Lavender, Global Head, KPMG Private Enterprise, KPMG International.

Global exit value dropped more than 50 per cent quarter-over-quarter, from an already low $46.4 billion in exit value in Q4 2022 to $20.3 billion in exit value in Q1'23

The VC investment in India remained relatively soft in Q1 as VC investors intensified their scrutiny of potential deals.

Interest in alternative energy remained robust in India, with VC investors particularly focused on the two-wheel EV market.

Fintech continued to drive many of the largest deals in India and the country also saw growing interest in agtech and gaming during the quarter

"The biggest change in India is that the euphoria for deals has died down. The big-ticket deals have also dried up, which has had an outsized impact on our total investment numbers," said Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India.

Despite the visible decline, the macros here are still very good. We're still seeing a lot of funding in pre-series A deals," he added.