Despite global venture capital funding cooling in the first quarter of this year, it was still the fourth-best quarter on record, according to the latest CB Insights State of Venture Capital funding report released today.
The quarterly CB Insights report found that global venture capital funding dropped to $142.9 billion in the quarter, the lowest since the same quarter of last year. The figure was down 19% from the previous quarter, the largest percentage fall since the third quarter of 2012.
The report found that 49% of all global venture capital funding was in the U.S., with a quarterly total of $71.2 billion. Though that’s a solid figure, it was a five-quarter low. U.S.-based startups drove a significant portion of the deal activity, accounting for 37% of all deals in the first quarter.
Unicorns, startups with a valuation of $1 billion or more, also declined in the quarter. In the first quarter there were 113 new unicorns globally, a five-quarter low and down from 115 in the first quarter of last year. The U.S. and Europe had the highest number of new unicorns at 67 and 20, respectively.
However, it wasn’t all bad news, as valuations on companies raising venture capital funding jumped 160% on average — a 2.6 times increase from prior financing rounds. Median valuations for early- and mid-stage deals also trended up, reaching $34 million and $343 million.
CB Insights also found that late-stage deals are dropping in value given headwinds and changing market conditions. The report noted that the global median valuation on late-stage deals dropped to $1.054 billion in the first quarter, barely above the $1 billion mark first crossed in 2021.
Similar to the first look report from PitchBook-NVCA earlier this week, CB Insights measured a 45% drop in initial public offerings and special-purpose acquisition company exits in the quarter. However, merger and acquisition deals remained elevated in the quarter, with 2,983 global deals.
Asia led IPOs in the quarter with 91, more than any other region. Asia-based companies accounted for nine out of the top 10 IPOs in the first quarter, including eight mainland China-based companies.
So-called megarounds of $100 million or more fell 30% in the quarter. That said, they still accounted for just over half of all venture capital deals in the first quarter, even if that was down from 59% in the previous quarter.
Tiger Global Management was the top investor in the quarter, investing in 120 companies, followed by Gaingels at 96 and Global Founders Capital at 77.