Venture capital funding in U.S. plunged 49% in first half of 2023: GlobalData

Investing.com -- Venture capital funding plunged in the first half of the year in the U.S., a period marked by rising volatility and concerns about an economic slowdown despite a surge in tech stocks.

A total of 4,218 venture capital funding deals with a disclosed value of $64.6 billion were announced in the U.S. from January through June, according to analytics firm GlobalData. That’s a drop of 34.7% from the same time last year in terms of volume and a 49.2% decline in value.

By comparison, the first half of 2022 featured 6,458 venture capital funding deals with a value of about $127.1B. 

Among the U.S. funding deals announced in the first half of 2023, payments services company Stripe raised $6.5B, chatbot maker Inflection AI raised $1.3B, payroll software maker Rippling raised $500 million, quantum computing startup SandboxAQ raised $500M, and generative AI startup Anthropic raised $450M.

The Federal Reserve started aggressively raising interest rates in early 2022, causing some investors to pull back as they awaited clarity on the direction of Fed policy. Rapidly rising rates put pressure on the startup community and also contributed to the collapse of venture capital banker Silicon Valley Bank in March.

GlobalData noted that the U.S. continues to dominate global venture capital funding, with the highest share of deal volume and value.

The U.S. accounted for 38.1% of the total number of venture capital funding deals announced globally during the first half, GlobalData said, and its share of the deal value was 51.4%.