Hello and welcome back to The Exchange’s weekend missive. If you are reading this on TechCrunch and want to get the letter in your inbox, head here.
Your regular host Anna Heim is off this week on a much-deserved vacation, so I’m stepping back into my old role as newsletter scribe. It’s good fun to write this note, frankly, so thanks for having me.
Today we’re taking a look at the good news from the venture market we covered this week, but with an added global perspective. We’re broadening our lens a bit to get more general figures to better understand if the good news from the United States is holding up elsewhere. Call it a look abroad in Anna’s honor. To work! — Alex
The Good
In the United States, venture capital activity is holding up better than we anticipated. That’s good. Perhaps even better, venture interest in software startups is looking downright robust. That matters because most startups are software companies; if software startups are healthy, then upstart tech companies in general are doing OK. And given the United States’ weighty influence on startups overall, then startups must be OK everywhere, right?
Nope. Not anymore. Yes, the U.S. venture capital market is the biggest in the game, but the global startup industry is so large — and distributed — now that a healthy heartbeat doesn’t mean there aren’t problems elsewhere.
Let’s talk global numbers.
The Bad
My former corporate and journalistic home Crunchbase News has a grip of data on offer this week about the global venture capital market. Here’s what it details on a per-stage basis when we compare global Q3 numbers to Q2 results, as well as year-ago totals:
- Seed/angel: $7.4 billion in Q3 2022, $9.7 billion in Q2 2022, $7.9 billion in Q3 2021
- Early stage: $33.8 billion in Q3 2022, $45.2 billion in Q2 2022, $55.6 billion in Q3 2021
- Late stage: $39.9 billion in Q3 2022, $66.9 billion in Q2 2022, $108.4 billion in Q3 2021
The seed data is not bad. In fact, you could argue that it’s somewhat strong. Nearly matching a 2021 figure in 2022? Solid. From there the news gets worse. Early-stage capital on a global basis is slowing rapidly, and the picture is even less salubrious for late-stage startups around the world.
The better-than-expected U.S. Q3 venture capital data is actually bad news in this context. Why? Because if the United States — included in the above results — is doing well, and global futures are down, then the rest of world figures must be under even more pressure than we might glean from simply observing totals.
Naturally, we’ll compare the Crunchbase data with other sources in time, but the trend outlined in this first look is stark. We’d be surprised if other sources disputed what Crunchbase News detailed this week.
So, it’s mostly good times here in the States, but far from it elsewhere. And the later stage your startup is, the more you are looking at an investment drought when compared to last year’s deluge. Perhaps it’s not a huge surprise that we saw the Liquid Death round here in the U.S., where things are still somewhat hot.
Could the same deal have come together in Europe? Or Asia? We doubt it. That says something about the relative heat of the various venture spheres of today.
In closing, Disrupt is just around the corner. TechCrunch+ has one of the two main stages and our own subscriber-only lounge. I am hosting our stage, which means you can watch me try to look Somewhat Professional in person! See you there!