2022-07-20-KPMG-Q2_22_Venture_Pulse_Report_—_Europe_94页_3mb

Global Venture Funding Trends Q2 2022

Venture capital investment and deal volumes declined globally in Q2 2022 due to geopolitical uncertainty, inflation, rising interest rates, and market corrections. Despite lower activity, dry powder remained substantial, with investors shifting focus toward profitability, cash conservation, and sectors aligned with ESG and energy transition.

Key Highlights

1. Global & Regional Trends

   • Investment Decline: Global VC funding dropped to a six-quarter low, with funding slowed by macroeconomic headwinds and regulatory scrutiny.
   • Resilience by Region:
     • US: Showed relative stability, led by late-stage deals ($2B Epic Games, $1.7B SpaceX, $1.5B GoPuff).
     • Europe: Fintech (Germany, Switzerland, UK), cleantech, and healthtech attracted significant investment.
     • Asia: Declining investment, especially China due to COVID-19 lockdowns and regulatory shifts.
     • Emerging Markets: Brazil, India, and Australia saw mixed results, with startups cutting costs amid economic uncertainty.
   • Sector-Focused Shift: Energy, cleantech, cybersecurity, supply chain, and ESG gained traction due to heightened awareness of fossil fuel dependency and sustainability.

2. Investor Priorities & Challenges

   • Conservatism: Dry powder persists, but LPs and LPs demand stronger paths to profitability and cash preservation to deferral funding rounds.
   • Down Rounds: Potential for down rounds increases as valuations soften, particularly in US markets.
   • CVC & Corporate Participation: CVC investment slowed; corporations focus on strategic arms and PE-style acquisitions to navigate uncertainty.

3. Market Dynamics & IPO Activity

   • IPO Shuttered: Door remained closed globally due to poor public market performance, with US-based exits delayed indefinitely.
   • M&A Rally: Acquisitions rose as a primary exit driver, with interest in undervalued startups.

4. Geographic Uncertainty & ESG Focus

   • Geopolitical Risks: Supply chain diversification and ESG considerations intensified post-Ukraine crisis.
   • Energy Sector: Growth in alternative energy and cleantech investments driven by decarbonization goals and policies.

Overall
Market correction pressures persist, with regions adapting by focusing on cash efficiency and strategic flexibility. Key trends include macro-driven slowdown, cautious investment, and consolidation. First-time and follow-on financing see balanced but cautious activity, while exits align with macro fundamentals.