Venture capital

VC funding fell to $81 billion in Q3, less than half the amount from a year before

The global venture pullback continues.
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Francis Scialabba

· less than 3 min read

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If you’ve read this newsletter—or anything that even grazes the world of business—you can probably guess which direction global venture-capital funding went in Q3. (Hint: It’s not up.)

By the numbers: Last quarter, global VC funding fell to $81 billion, per Crunchbase, down sharply from both the previous quarter and year. Q3 VC funding was down 33% from its Q2 2022 total of ~$120 billion, and 53% year over year.

  • Last quarter’s $81 billion was the lowest in more than two years, since Q1 2020, in which $70.6 billion was invested. It’s roughly equal to the amount invested in Q4 2019.

As has been the case in recent months, late-stage companies shouldered an outsized share of the pullback in Q3—funding for that set of startups dropped 40% quarter over quarter and 63% year over year. Early-stage companies saw a 25% QoQ decline and a 39% YoY drop, while seed-stage funding fell 24% QoQ and was “close to flat” YoY, per Crunchbase.

Zoom out: Despite the decline, VCs are sitting on an enormous amount of dry powder: In the US, for example, VC funds have already raised $150.9 billion to invest in startups, per Pitchbook, breaking last year’s record despite the year not being over yet. That blistering pace began to slow down in Q3, per Pitchbook, but the fact remains that there is plenty of capital on the sidelines. The question is when and how it will make into the mix.

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