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The Data Behind Venture Capital’s 3-Year Roller Coaster Ride



The Data Behind Venture Capital’s 3-Year Roller Coaster Ride

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Venture capital is a vital source of financing for startups and early-stage companies looking to bring their innovative ideas to life. It’s a high-risk investment with the potential for huge returns, so volatile markets, global instability, and a cooling economy can affect how VCs write checks.

We’ve seen all of those factors come into play over the past three years, and the influence on VC is pretty clear. 

The onset of the pandemic caused some stalling across the board, but 2021 saw a record-setting comeback in VC investments. We saw a clear retrenchment in 2022, dropping back closer to 2020 levels as the year ended — mirroring the macroeconomic uncertainty we’ve experienced. What does that three-year swing mean for what’s ahead in 2023?

We track funding data within the ZoomInfo platform. To understand how VC funding has changed over the last three years, we analyzed verified global capital raises that had a public announcement, excluding self-reported capital raises. Here’s what we found. 

VC Funding Look-Back

The total number of VC funding rounds started off flat in the first two quarters of 2020 as the pandemic took hold. But as the year came to a close, optimism appeared to rebound. With the creation and distribution of vaccines, investor confidence seemed to increase, along with a willingness to fund new projects, causing a surge in the last quarter of the year in total amount and rounds of investment. The total for the year was over $148 billion with 3,570 funding rounds.

Made with Flourish

2021 saw the most funding over the past three years, both in the amount and number of funding rounds. The year’s total funding was $330 billion — more than double that of 2020 — with 5,622 total rounds of funding. The third quarter saw the highest total amount of funding at $88.76 billion, over 27% of the annual total, with 1,457 rounds.

Made with Flourish

Venture funding slowed dramatically in 2022, but still remained above 2020 levels overall. For the…

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