The Venture Market Is Overcorrecting

Table of Contents

A Conversation with Gené Teare from Crunchbase and Crunchbase News

On this week’s episode of Equity, the podcast about the business of startups, we’re joined by Gené Teare from Crunchbase and Crunchbase News. She’s a well-known analyst of the global venture capital market, and was instrumental to Crunchbase’s early life and remains one of its most tenured staffers.

The Big Picture: Q3 2023 Venture Capital Market

What should we think about when considering the Q3 2023 venture capital market as a whole? Gené provides some insights on this topic. You can find more information on Latin America, Canada, and global data from TechCrunch+.

Q3 Data Overview

Gené shares her thoughts on the Q3 data:

"We saw a significant slowdown in venture capital investment globally in Q3 2023 compared to previous quarters. The total amount of venture capital invested was down 15% quarter-over-quarter. However, it’s worth noting that this decline is more pronounced in certain regions such as Latin America and Canada."

Stage-Level Health

Which level of startup maturity is seeing the most capital? The least?

"We’re seeing a shift towards later-stage startups," Gené notes. "In Q3 2023, we saw a significant increase in funding for series B and C rounds, while seed rounds decreased. This suggests that investors are becoming more risk-averse and prefer to invest in more established companies."

Venture Capital Flows Around the World

As always, where venture dollars land is nearly as important as their total number for any particular period.

"Global venture capital flows continue to shift towards Asia," Gené points out. "In Q3 2023, we saw a significant increase in investment from Asian investors into startups outside of their region. This trend is likely driven by the growing presence of Asian companies in global markets and the increasing importance of international expansion for startups."

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About Alex Wilhelm and Mary Ann Azevedo

Alex Wilhelm is a senior reporter for TechCrunch covering markets, venture capital, and startups. He was also the founding host of TechCrunch’s Webby Award-winning podcast Equity.

Mary Ann Azevedo has more than 20 years of business reporting and editing experience for publications such as FinLedger, Crunchbase News, Crain, Forbes, and Silicon Valley Business Journal. Prior to joining TechCrunch in 2021, she earned numerous awards including the New York Times Chairman’s Award and others for breaking news coverage.

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Fundraising

Are AI companies just defense tech now?

"AI companies are increasingly being used for defense purposes," Gené notes. "This trend is driven by the growing importance of AI in national security and the increasing need for governments to invest in AI research and development."

Conclusion

The venture market is overcorrecting, with a significant slowdown in investment globally in Q3 2023 compared to previous quarters. However, this decline is more pronounced in certain regions such as Latin America and Canada. We’re seeing a shift towards later-stage startups, while global venture capital flows continue to shift towards Asia.

We hope you enjoyed this episode of Equity. Don’t forget to subscribe to us on Apple Podcasts, Overcast, Spotify, and all the casts for new episodes every Monday, Wednesday, and Friday.