High value deal volume decline reflects shift in investor strategies in 2023
The global venture capital (VC) landscape saw a remarkable transformation with a substantial drop in high value deals (> $100 million) as low value deals (≤ $10 million) took center stage in 2023. This trend reflects evolving investor strategies amid economic uncertainties. The contrasting dynamics highlight a pivotal moment in VC funding, prompting closer examination of industry trends and investor behavior, says GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Deals Database reveals that a total of 14,661 VC funding deals with disclosed funding value were announced during 2023. This represents a 38% decline in volume compared to the announcement of 23,659 deals with disclosed funding value during the previous year.
Deal volume across all the funding size ranges witnessed decline in 2023 compared to 2022. However, particularly striking was the significant drop in the number of high value VC deals, which plummeted by more than half from 753 deals in 2022 to 333 deals in 2023. Meanwhile, the number of low value VC deals declined by 36.2% from 16,189 in 2022 to 10,326 in 2023.
Despite the decline, low value deals continued to account for the major chunk of VC deals volume. Low value deals accounted for 70% of the total number of VC deals with disclosed funding value announced globally during 2023. Meanwhile, the share of high value deals stood at 2.3%.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “The pronounced decline in high-value deals underscores the heightened cautiousness among investors. Global economic uncertainties have compelled investors to exercise prudence when making substantial investments.”
Mid size funding deals (valued more than $10 million and less than or equal to $100 million) volume declined by 40.4% from 6,717 in 2022 to 4,002 deals in 2023. These deals accounted for around 27.3% of the total number of VC deals with disclosed funding value announced globally during 2023.
