Global venture funding slowed in November to $19.2 billion, a 16% drop from the $23 billion raised for the same time period in 2022, according to data from Crunchbase. Funding in November 2022 was already slow, down 67% from 2021. The $19.2 billion raised in November also represents a near 7% drop from the $20.6 billion collected in October.
The biggest drop in VC funding occurred in early-stage funding, which declined 34% year-over-year to $7.6 billion, while seed funding fell by more than 15% to $2.5 billion. In contrast, late-stage funding grew by around 7% to $9.2 billion, the report said.
Funding to U.S. companies in November totaled nearly $9 billion, a little less than 50% of total funding. Sectors that raised the most in November include healthcare and financial services with more than $3 billion invested in each of those sectors.
Artificial intelligence remained very popular, with AI companies collecting $2.4 billion last month. The biggest rounds last month belonged to Aleph Alpha, a German startup, which raised $500 million from investors including Bosch Ventures, Hewlett Packard Enterprise and SAP. Together AI also collected $102.5 million in a round led by Kleiner Perkins.
Brian Smiga, a cofounding partner of Alpha Partners, said the first six months of 2023 was a desert for rounds led by top-tier VCs. This slowly increased during the second half of the year Smiga said. (New York-based Alpha Partners focuses on mid-mid-stage investing and expansion rounds alongside earlier investors.) Compared to last year, the number of VC deals rose in 2023, while the quality of transactions increased dramatically, Smiga said. “Deals are taking much longer to close, which favors investors,” he said.
Smiga expects 2024 to continue the trend of companies raising rounds at lower valuation. “2024 is a down round year,” he said. “It’s a great environment for companies with a sustainable moat and economics, but bad for everyone else.”
Talk to you tomorrow,
Luisa Beltran
Twitter: @LuisaRBeltran
Email: luisa.beltran@fortune.com
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