Venture investors crippled by pessimism – Hi-Tech – Kommersant

According to the results of the first quarter, investments by venture investors in startups fell to record lows. Compared to last year, global investment decreased by 53%. Analysts attribute this to the nervousness of investors, concerned about the recent bankruptcy of Silicon Valley Bank, which was a leader in financing technology startups.

According to the consulting and research company Crunchbase, the volume of global venture investments in the first quarter amounted to $75.7 billion, which is more than half as much as a year earlier ($161.5 billion). This drastic decline in the first quarter was even despite Microsoft’s $10 billion investment in AI developer OpenAI and a massive $6 billion round of funding from payments operator Stripe. Without these two large investments, the drop would have been even more dramatic – to $ 60 billion. Crunchbase researchers emphasize that the reduction in venture capital investments occurred in almost all segments – the decline was 44-54%. This suggests that pessimism has gripped all venture capital investors who are now overpricing their portfolios.

A significant drop in venture capital investment was also recorded in the United States. According to PitchBook and National Venture Capital Association researchers who cite Bloombergin the first quarter in the United States, the volume of venture investments amounted to only $ 37 billion – this is a 55% drop by the first quarter of 2022 and the lowest since the fourth quarter of 2019.

The reason for such a sharp decline in venture capital investments, analysts unanimously name the March bankruptcy Silicon Valley Bank, which was one of the largest and oldest US banks that has worked with technology startups.

“Now the whole market has taken a very cautious position in relation to (venture.— “b”) investments,” Kyle Stanford, a venture capital analyst at PitchBook, told Bloomberg. “It has become difficult for companies to raise capital now, even if their business continues to grow at the same pace that was shown during the previous round of investments.”

We have not yet reached the bottom of the cycle, — said in an interview Yahoo Finance Gina Teare.— If not for two major deals (with OpenAI and Stripe.— “b”), the fall would be more than 60%.

Evgeniy Khvostik