In the incredible situation of venture capital 2021, the situation improved in the first quarter of 2022.
The latest risk monitoring report released by pitchbook and the National Venture Capital Association stressed that the transactions in the first quarter will enter a “healthy readjustment period”. U.S. venture capital backed companies raised nearly $71 billion in the quarter, down from $95.4 billion in the fourth quarter of last year, while the exit value fell sharply to $33.6 billion.
Even if the economy slows down, the transaction volume in the first quarter of 2022 still exceeds the total amount in the quarter before 2021.
The report points out that rising interest rates, inflation and geopolitical uncertainty are the reasons for the economic slowdown. Another trend is that the market value of newly established venture capital support companies has declined in recent months, which may affect venture capital.
Related report: great entrepreneurial reset: why should founders prepare for lower valuations
In a guest post on geekwire published in January this year, Charles Fitzgerald, a Seattle technology veteran and angel investor, warned the founders that the reset of capital flows and valuations would have a huge impact on start-ups.
But there are some differences between the current environment and the last technology led recession in 2000 and 2001. “Overall, a more robust business model has greater appeal and significantly increased support for portfolio companies – about $230 billion of traditional venture capital in the United States,” Ginger challenge, managing director of JPMorgan Chase commercial banking, said in the report. “Both should buffer any callbacks.”
Seattle area startups raised $1.5 billion in the first quarter through 112 transactions. This figure fell from $2.7 billion of 131 transactions in 2021 quarter to $1.2 billion above $94 in the same period last year.
For fast-growing companies, there are several rounds of major financing, including $248 million from sales software startup highspot and $140 million from e-commerce software startup fabric. New unicorns were born, including seekout and temporary, which reached a $1 billion valuation milestone and joined a growing Unicorn club in Seattle.