U.S. venture capital firms are expected to raise between $120 billion and $130 billion in 2023, which would be a drop from the total of $168.3 billion raised in 2022, according to PitchBook data released Tuesday.
So far this year, U.S. venture capital firms have raised a combined $27.6 billion as of June 13.
In terms of valuations, PitchBook predicts that later-stage companies, those companies receiving a Series C or Series D round of funding, will be the most likely to experience down rounds, which is when the value of a venture capital-backed company on its newest round of financing is lower than its valuation on the prior round of financing. Year to date June 6, venture growth companies have seen more down rounds than late-stage companies, PitchBook data showed. PitchBook defines venture growth as companies with either a Series E or later round of financing or six rounds of venture capital financing that is at least 7 years old.
In the second quarter as of June 6, 34.3% of venture growth companies had down rounds, compared with 31.9% of venture growth companies experiencing down rounds in the first quarter and 12.7% in all of the second quarter of 2022. By comparison, 12.3% of late-stage companies had down rounds in the second quarter as of June 6, up from 8.5% in the prior quarter and 7.5% in the second quarter of 2022.
