Global venture capital investments fell sharply to $120.2 billion in the second quarter of 2022 across 8,420 deals. In Mexico, venture fund rates are healthy in key regions of the country
Against a backdrop of geopolitical, economic and supply chain uncertainty, global venture capital investment is generally declining. Although different areas, including fintech You cleantechBenefiting from more selective investment.
Ignacio García de Pressano, Lead Partner for Deal Advisory and Strategy at KPMG in Mexico
a calm demeanor
Key Operations, Venture Capital Trends and Opportunities, according to the edition of the Venture Pulse Report Analyzing the Second Quarter of 2022, published by KPMG Private Enterprise fintech, cyber security, supply chain management, alternative energy and energy storage continue to attract significant interest among investors. Despite global venture capital investments falling to $120.2 billion in 8,420 deals during the period.
The US captured $66.2 billion in venture capital investment – more than half of total global venture capital investment – of which $62.3 billion was from the United States, while the European market showed strong resistance during the quarter, bringing down only $27.2 billion. attracted.
For its part, investment in venture capital in Europe remained higher than it was before the second quarter of 2021, despite its second consecutive quarter of decline. The second quarter of 2022 was the weakest in Asia, presenting the lowest level. For USD 24,500 million in 2,206 operations in eight quarters.
Investor interest in supply chain and logistics continues to grow, creating challenges of large impact across various industries. Just like that, Energy prices rise around the world And growing concern about energy security has prompted investors Find power and storage options, Finally, increasingly investments in electric vehicles, battery technologies and hydrogen are becoming more attractive.
Key Features – Q2 2022
- Global venture capital investment declined sharply, from $165.3 billion in 11,468 deals in the first quarter of 2022 to $120.2 billion in 8,420 deals in the second quarter of 2022.
- Venture capital investment in the US declined from $89.3 billion in 5,034 deals in the first quarter of 2022 to $66.2 billion in 3,778 deals in the second quarter of 2022. In investments in the second quarter of 2022, the US represented an amount of USD 62.3 billion, marking a decrease of USD 81.9 billion in the first quarter of 2022.
- In the second quarter of 2022, venture capital investment in Asia fell to its lowest level in eight quarters at $24.5 billion in 2,206 deals.
- Despite experiencing a decline of $27.2 billion in the second quarter of 2022, venture capital investment in Europe remained significantly stronger than historical trends
- Global fundraising continues to be strong, with $158.6 billion raised by the end of the second quarter of 2022, well on track to surpass the record $252.2 billion achieved in calendar year 2021.
- Falling from $355 billion in Q4 2021 to $70 billion in Q1 2022, outflow value fell to just $50.8 billion in Q2 2022
Global fundraising continues at record pace
Global fundraising activity continued to maintain a record pace through the middle of the year, raising $158.6 billion by the end of the second quarter of 2022. The US helped with global fundraising, representing an amount of US$121.5 billion in the middle of the year. An annual record of USD 138.9 billion is reached in the US in 2021.
Key findings from Venture Pulse’s 2022 second quarter report
- Venture capital-backed companies raise $66.2 billion with 3,778 deals
- Median deal declines in late-stage venture capital
- Valuation remains at record high
- After a historic year, Canada deals fall in the second quarter
- Brazil experiences sudden drop in mega contracts
- The 10 Best Contracts, They’re All In The United States
Crypto Companies Are Taking Another Step
During the second quarter of 2022, cryptocurrencies and blockchain They had some immunity to valuation and financial reforms in the US; However, this began to change. Now crypto companies are looking to face a huge sale of crypto assets. Consolidation among cryptocurrency firms is likely to increase in Q3 2022, as the best firms rise to the top and others fall behind.
Trends for the third quarter of 2022
Given the current uncertainties, venture capital investment across the US could be relatively low in the third quarter of 2022.
cryptocurrencies and . areas like blockchain E-commerce and other consumer-focused industries may face consolidation, as the best companies stand out from the competition and companies that didn’t plan to run out of cash.
Downward rounds may also occur more frequently, although it is likely that several startup Eliminate other options first, layoffs, delay or end projects, freeze investment in research and development, and cut other expenses to conserve cash and delay new fundraising for as long as possible.
Expectedly healthy third quarter in Mexico
2022 continues to witness historically healthy venture financing rates in sectors that are important in Mexico. It remains to be seen whether any downside is due to market volatility in general, but the figures so far look favourable.
Even after a record 2021, so far the Mexican ecosystem continues to receive a larger amount of venture capital than the historical average, with more than $500 million in investments in the second quarter.
A positive, albeit moderate, trend in venture capital investment can be anticipated in the remainder of 2022. They will focus on more selective and strategic sectors because of the potential for their impact on national GDP growth, interest rates and valuations, as well as global uncertainty, among other factors. In this context, priority will be given to consolidation of existing investments which require it.
