The fundraising of US venture capital firms has fallen to its lowest level in six years, putting pressure on start-ups. American venture capital firms raised $67 billion last year, the lowest annual value since 2017. This represents a 60% decline from the record $173 billion raised in 2022, according to an analysis by private market data provider PitchBook and the National Venture Capital Association (NVCA).
This significant decline is increasing the pressure on start-ups, which have been experiencing a funding drought for the past 18 months. Venture capital investors are hesitant to invest more money in companies. At the same time, venture capital firms are struggling to raise new funds as their own investors, such as pension funds, insurance companies, and foundations, are withdrawing due to high interest rates.
Some prominent venture capital firms have already lowered their fundraising goals to account for the challenging environment of the past year. As a result, US venture capital investors have been able to invest less fresh capital. According to PitchBook and NVCA, they invested a total of $171 billion last year, less than half of the amount they spent in 2021.
In addition to the decline in investments, US venture capital firms are facing a significant slowdown in start-up exits, such as IPOs or acquisitions. This affects their ability to repay capital to their investors. The value of start-up exits in the US was only $61.5 billion last year, compared to a peak of $797 billion in 2021. In Europe, it was less than €12 billion, the lowest value in a decade.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Europe |
| Countries | 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | None |
| Companies | National Venture Capital Association (NCVA), PitchBook, Financial Times |
| Currencies | None |
| Securities | None |
