Venture capital investment declines slightly to $77.4 bn in Q1: KPMG report

Venture capital investment globally declined slightly to USD 77.4 billion across 7,783 deals in the June quarter as investors continued to hold back from making large mega-deals amidst uncertainties, a KPMG report said on Thursday.

In a report titled Venture Pulse Q2 2023, which analyses venture funding globally, KPMG said VC investment held relatively steady in April-June, led by a USD 6.8 billion raise by US-based Stripe, USD 2 billion raise by Singapore-based Shein, USD 1.3 billion raise by US-based AI startup Inflection, and USD 700 million raise by India-based Byju.

With regard to India, the report said despite a small uptick quarter-over-quarter, VC investment remained very subdued. The April-June quarter of 2022 saw over USD 8 billion in VC investment in India.

The largest deals in Q2 2023 in India included a USD 700 million raise by edtech Byju, USD 600 million raise by online optical platform Lenskart, and USD 168.1 million raise by mobile balance management app company True Balance.

Fintech, edtech, and gaming industries continued to attract solid interest and VC investment in India during Q2 2023. Agritech also remained high on the radar of VC investors in the country, although it remains a relatively nascent industry, the report said.

Globally, the report said, in Q2 2023, VC-backed companies raised USD 77.4 billion across 7,783 deals and many established VC firms are holding back on raising new funds until some of the uncertainty in the market begins to dissipate.

"Uncertainty continued to permeate the global VC market in April-June amidst geopolitical uncertainties, stubbornly high inflation, and the possibility of further increases to interest rates in a number of major jurisdictions. With no end in sight to market challenges, VC investors globally continued to hold back from making large mega-deals this quarter," the report said.

"As interest rates continued to rise in many regions of the world, less traditional VC investors have recognised the increasing availability of lower risk investment alternatives, including bonds and simple deposit accounts. Given the uncertainty in the VC market, many investors in different regions are looking at these alternatives as more attractive than in recent years in order to secure a known return," it added.