Venture Pulse q2 2023

Global analysis of venture funding
26 July 2023
Welcome to the Q2’23 edition of KPMG Private Enterprise’s energy storage, and cleantech sectors also remained very
Venture Pulse — a quarterly report highlighting the major attractive to investors. Health and biotech and B2B-focused
You know KPMG. You might not know
trends, challenges, and opportunities facing the venture capital solutions also remained firmly on the radar of VC investors. KPMG Private Enterprise.
market globally and in key jurisdictions around the world.
Heading into Q3’23, VC investment will likely remain near the
Uncertainty continued to permeate the global VC market in current level as VC investors continue to hold back in the KPMG Private Enterprise advisers in
KPMG firms around the world are dedicated
Q2’23 amidst geopolitical uncertainties, stubbornly high hopes that market conditions will improve. With the global IPO
to working with you and your business, no
inflation, and the possibility of further increases to interest market expected to remain mostly shuttered — likely through
matter where you are in your growth
rates in a number of major jurisdictions. With no end in sight to at least the the end of the year — VC investors could start
journey — whether you’re looking to reach
market challenges, VC investors globally continued to hold making hard choices about what companies to fund or not
new heights, embrace technology, plan for
back from making large mega-deals this quarter — with a few fund given the changing market conditions. Consolidations in
an exit, or manage the transition of wealth
exceptions: a US$6.9 billion raise by US-based payments over-saturated industries could start to drive some M&A
or your business to the next generation.
company Stripe, a $2 billion raise by Singapore-based online activity as companies look to gain scale and become more
retailer Shein and a $1.3 billion raise by Microsoft-backed AI profitable.
startup Inflection in California. Jonathan Lavender
In this quarter’s edition of Venture Pulse, we examine these Global Head
VC investors globally remained very cautious during the and a number of other global and regional trends, including: KPMG Private Enterprise
KPMG International
quarter, intensifying their scrutiny of potential deals and putting
• Skyrocketing interest in AI and generative AI solutions
a laser focus on profitability and the sustainability of startup
business models when making investments. While many VC • Growing focus on profitability at all deal stages
investors continued to have cash available to them, concerns Conor Moore
• Continuing focus on alternative energy and battery storage Head of KPMG Private Enterprise
about future fundraising likely contributed to their growing in the Americas,
caution given the sharp decline in fundraising activity so far • Declining global fundraising activity and why China is
Global Leader, Emerging Giants,
KPMG Private Enterprise,
this year. bucking the trend KPMG International & Partner
KPMG in the US
In a relatively dim quarter, artificial intelligence and generative We hope you find this edition of Venture Pulse insightful. If you
AI was a bright light, with VC investors in all major regions would like to discuss any of the results in more detail, please Lindsay Hull
Senior Director, Emerging Giants Global
showing keen interest in the space. The alternative energy, contact a KPMG adviser in your area. Network, KPMG Private Enterprise,
KPMG International
Unless otherwise noted, all currencies reflected throughout this document are in US dollars.
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. #Q2VC
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Global US
• VC investment declines slightly to • VC deal value falls to $39.85 billion across 3011 deals
$77.4 billion across 7783 deals • Investment in software sector increases as a
• Uprounds decline as a percentage percentage of overall investment
of all deals • Exits remain slow across all areas
• Late stage investment continues to • Corporates join back in tentatively
soften • Fundraising remains muted in wake of record highs
• Global first-time financings well off
last year’s pace
• Top 10 deals spread among
8 different countries
Americas Asia
• VC-backed companies fall to • Venture Capital investment drops
$42.9 billion across 3360 deals for 6th consecutive quarter
• Down and flat rounds see an uptick • Early-stage deals remain resilient
• Business, energy and healthcare • Investment in software declines as
see modest growth a percentage of overall deals
• Total Canadian deal value drops • Exit activity increases slightly on
rebounds IPO resilience
• Brazil records another slow quarter • Chinese companies raise 5 of
as Mexico sees strong rebound largest 10 deals in Asia
Europe
• Investment remains cool in Europe — with $13.5 billion invested on 1861 deals
• Enterprise and healthcare related offerings draw investor attention
• First-time financing volume stronger than anticipated
• Capital continues to concentrate in follow-on funds
• Germany, UK and Switzerland dominate top 10 deals
#Q2VC
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
3
Global US | Americas | Europe | Asia
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Global VC investment held relatively steady in Q2’23, led by a $6.8 billion raise by US-based Stripe, a $2 billion raise by Singapore-based Shein, a $1.3 billion raise by
US-based AI startup Inflection, and a $700 million raise by India-based Byju.
Less traditional investors prioritizing safer asset classes Both Microsoft and Google have already made major inroads into the space, including Microsoft’s
$10 billion investment in OpenAI during Q1’23, along with China’s tech giants — Alibaba, Baidu,
As interest rates continued to rise in many regions of the world, less traditional VC investors and Tencent. As of Q2’23, Alibaba said that it had received a significant number of trial access
have recognized the increasing availability of lower risk investment alternatives, including bonds requests for its generative AI tool Tongyi Qianwen, while Baidu announced that it had submitted
and simple deposit accounts. Given the uncertainty in the VC market, many investors in different its own generative AI tool Ernie bot for regulatory approval.1
regions are looking at these alternatives as more attractive than in recent years in order to
secure a known return. Regulators globally have also enhanced their focus on AI, with a growing number investigating
how best to regulate the sector. During Q2’23, the European Union passed an AI Act, which sets
Tough time for fundraising out regulations related to the use of AI in the region. In particular, the new regulations require that
any generative AI systems be reviewed prior to being put into commercial use.2
Fundraising by VC firms globally remained incredibly subdued in Q2’23, with many established
VC firms likely holding back on raising new funds until some of the uncertainty in the market Down rounds growing globally as VC investors continue to shy away from late-stage deals
begins to dissipate. The impact of the slowdown in fundraising activity has been cushioned
somewhat by the amount of dry powder that remains in the market — with many VC firms VC investors continued to hold back from making large, late-stage deals in most jurisdictions
deploying the funds they raised previously at a much slower rate than they have in recent years. during Q2’23, with a couple of exceptions. US-based global payments processor Stripe raised a
$6.8 billion, while Singapore-based online fashion retailer Shein raised $2 billion. Both companies
China’s unique VC ecosystem, including robust participation by central and local governments took major hits to their valuations as a result of their new funding rounds. More broadly, the steep
in VC deals in order to drive investment in priority areas, likely contributed to the increasing decline in late-stage deal value and number of deals — particularly for Series D+ deals —
fundraising activity. continued in Q2’23. This continued pullback was not a surprise given ongoing investor concerns
about valuations and a lack of exit opportunities.
Investment in AI continues to be red-hot
With IPO window still closed, interested startups focusing on improving their
Investment in AI and generative AI remained hot in Q2’23 as startups around the world looked
attractiveness
to accentuate their AI capabilities and VC investors enhanced their focus on the AI space,
seeing it as one of the few resilient areas of investment in the current market. Corporate The IPO market globally remained in drought mode during Q2’23, particularly in the US. Given the
investors showed the most interest in the generative AI space, particularly global tech giants growing number of companies looking to IPO once the window reopens, some have turned their
with the massive data sets required to underpin robust generative AI solutions. attention to improving their attractiveness to the market in advance — improving their operational
efficiencies, reducing unnecessary head count and other costs, and improving their financial
1 https://www.cnbc.com/2023/05/23/chinas-tencent-alibaba-bank-on-ai-for-growth-as-competition-heats-up.html metrics and profitability.
2 https://www.cnbc.com/2023/06/14/eu-lawmakers-pass-landmark-artificial-intelligence-regulation.html
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VC investors prioritizing financial metrics Trends to watch for in Q3’23
Globally, VC investors have become far more cautious with their spend, prioritizing companies VC investment globally is not expected to change radically heading into Q3’23, although this
well positioned to grow and thrive even in the changed business environment. Increasingly they prediction is in no way a certain bet. Given the continued geopolitical challenges, the lack of
are looking for companies that are already profitable rather than simply having a plan to move confidence in exits, ongoing uncertainty as to whether the world is or is not in a recession, and
in that direction. Even with early-stage companies, VC investors are beginning to look beyond the possibility of future interest rate hikes, there remains the potential for VC investment to take
the specific product or solution to determine whether a company’s proposed business model is another hit in Q3’23.
underpinned by sound financial assumptions and metrics, such as clear unit economics.
Generative AI will likely remain a very hot area of VC investment globally, particularly among
VC firms making changes to adjust to shifting market large corporates looking to avoid missing out on what many see as a major multi-industry
gamechanger. Alternative energy and energy storage are also expected to remain a critical focus
With fundraising becoming more limited, many global VC firms have increasingly looked for
area for investors, along with health and biotech.
unique ways to better manage their capital, including their existing funds, and their own
operational activities. In Q2’23, Sequoia announced plans to spin off two parts of its operations
into separate firms — China-focused HongShan and India and Southeast Asia-focused Peak
XV Partners — in part to avoid conflicts between investment portfolios and to better manage
regulatory compliance obligations.3
Alternative energy, energy storage, and cleantech remain attractive to VC investors
The extended conflict between Russia and the Ukraine, ongoing concerns about energy
availability and energy costs, and growing commitment to and funding for cleantech innovation
in many countries has driven significant interest in the energy space over the last eighteen
months. This interest continued in Q2’23, with VC investors showing broadening their interest
across a growing diversity of energy solutions — from solar power technologies, offshore wind
farms, and hydrogen and atomic energy applications to EV infrastructure, decarbonization
solutions, and green finance focused offerings. Battery storage also continued to attract a
significant amount of VC investment.
3 Sequoia Is Splitting Into Three VC Firms (forbes.com)
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“
Global venture financing
2016–Q2'23
Short term, AI may be less of a
By now, the softening in venture financing hyper growth investment area
$250 16,000
activity is well established. An array of key than people think because it has
factors that venture players are facing and to get to the stage where it is
14,000 must consider remain intact, namely: being commercialized and people
$200 • Ongoing concerns and mixed indicators and businesses are willing to pay
12,000 pertaining to the health of the global for it. Long-term, the potential for
economy, especially among key countries AI globally is dramatic. It could
really cut down on the repetitive
10,000 • Complexities in cross-border transactions
$150 work that people do and remove
as political tensions remain taut and
growth in exposure can be questioned
inefficiencies from all kinds of
8,000 process. The big question I have
• Necessary increases in hurdles to funding long term is what will cutting a lot
$100 and proving out of timelines for revenue of junior staff do to the leadership
6,000
generation if not profitability, and related pipeline of companies? This is the
implications for fund return timelines kind of question companies need
4,000
to think about as they move
”
$50
forward.
2,000
$178.2
$104.9
$101.1
$115.6
$161.4
$176.8
$193.9
$213.0
$152.9
$104.0
$42.3
$77.3
$50.6
$62.8
$41.5
$39.8
$52.4
$60.1
$62.5
$79.4
$91.8
$79.1
$76.9
$73.7
$89.2
$88.0
$79.2
$90.7
$86.2
$77.4
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2016 2017 2018 2019 2020 2021 2022 2023
Jonathan Lavender
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth Global Head
KPMG Private Enterprise
KPMG International
Source: Venture Pulse, Q2'23. Global Analysis of Venture Funding, KPMG Private Enterprise. Data provided by PitchBook, July 26, 2023
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Global median deal size ($M) by stage Global up, flat or down rounds
2016–2023* 2016–2023*
$30 100%
90%
$25 Up
80%
70%
$20
60%
$15
50%
Flat
$10.8
40%
$10
30%
$6.0
$5 20%
$4.0
10% Down
$1.5
$0
2016 2017 2018 2019 2020 2021 2022 2023* 0%
2016 2017 2018 2019 2020 2021 2022 2023*
Angel & seed Early VC Later VC Venture growth
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023
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Global median deal size ($M) by series

2016–2023*
$120
$100
$80
$60
$50.0
$40
$33.35
$20 $20.0
$9.8
$0.3
$0 $2.0
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
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Global median pre-money valuation ($M) by series

2016–2023*
$1,000
$900
$800
$700
$600
$500
$400
$300 $316.0
$200 $180.0
$100 $75.0
$30.0
$0 $3.2 $8.6
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
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Global deal share by series Global deal share by series

2016–2023*, number of closed deals 2016–2023*, VC invested ($B)
40,000 $700
35,000
$600
30,000
$500
25,000
$400
20,000
$300
15,000
$200
10,000
$100
5,000
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
Series D+ Series C Series B Series A Angel & seed Series D+ Series C Series B Series A Angel & seed
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“
Global financing trends to VC-backed companies by sector Global financing trends to VC-backed companies by sector
100% Transportation 100%
90% Commercial 90%

Products &
Services
80% Consumer Goods 80%
& Services
70% Software 70%
60% Pharma & Biotech 60%
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
0% Supplies 0%
2023*
2023*
2016
2017
2018
2019
2020
2021
2022
2016
2017
2018
2019
2020
2021
2022
Energy
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Corporate VC participation in global venture deals Global first-time venture financings of companies
2016–Q2'23 2016–2023*
$140 4,500 $80 20,000
4,000 18,000
$70
$120
16,000
3,500
$60
$100 14,000
3,000
$50
12,000
$80 2,500
$40 10,000
$60 2,000
8,000
$30
1,500
$40 6,000
$20
1,000
4,000
$20
$107.1 $10
$114.5
500
$19.7
$57.3
$25.5
$39.9
$19.1
$16.7
$24.2
$30.9
$28.7
$39.6
$42.1
$50.5
$33.4
$33.2
$37.8
$44.6
$41.3
$39.4
$53.5
$58.7
$82.2
$84.9
$89.6
$74.5
$51.1
$44.7
$45.9
$39.7
2,000
$27.3
$26.0
$36.9
$34.2
$38.5
$70.5
$58.5
$17.1
$0 0 $0 0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 2016 2017 2018 2019 2020 2021 2022 2023*
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Deal value ($B) Deal count
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023 Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023
Note: The capital invested is the sum of all the round values in which corporate venture capital investors participated, not the amount that corporate venture capital
arms invested themselves. Likewise, deal count is the number of rounds in which corporate venture firms participated.
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Global unicorn rounds Global venture-backed exit activity

2016–Q2'23 2016–Q2'23
$80 300 $500 1,400
$450
$70 1,200
250
$400
$60
$350 1,000
200
$50
$300
800
$40 150 $250
600
$200
$30
100
$150 400
$20
$100
50
200
$10
$307.6
$126.1
$112.2
$158.5
$215.6
$240.2
$441.6
$313.2
$413.9
$50
$33.6
$12.1
$28.6
$11.6
$17.6
$13.7
$21.9
$28.3
$22.8
$40.5
$20.5
$20.3
$31.3
$26.0
$20.9
$21.2
$30.4
$59.1
$62.0
$71.9
$68.7
$52.5
$45.3
$19.8
$21.5
$21.8
$24.2
$39.8
$26.7
$29.8
$71.3
$23.5
$46.5
$37.2
$66.6
$30.2
$58.5
$64.7
$78.5
$60.6
$46.3
$82.9
$87.1
$74.3
$85.2
$56.1
$45.5
$51.5
$6.7
$5.1
$4.9
$0 0 $0 0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2 Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2
2016 2017 2018 2019 2020 2021 2022 2023 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Exit value ($B) Exit count
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023 Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023
Note: PitchBook defines a unicorn venture financing as a VC round that generates a post-money valuation of $1 billion or more. These are not necessarily Note: Exit value for initial public offerings is based on pre-IPO valuation, not the size of the offering itself.
first-time unicorn financing rounds, but also include further rounds raised by existing unicorns that maintain at least that val uation of $1 billion or more.
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“
Global venture-backed exit activity (#) by type Global venture-backed exit activity ($B) by type
2016–2023* 2016–2023*
I believe we are looking
5,000 $1,600 ahead at one of the most
interesting 12–18 month
4,500 periods of venture investing.
$1,400 We arguably have never
seen this level of economic
4,000
and geopolitical uncertainty
$1,200 matched against such an
3,500 exciting world changing
phenomenon — AI. The
$1,000
3,000 competition between these
two competing forces will be
”
2,500 $800 fascinating to watch.
2,000
$600
1,500
$400
1,000
$200
500
Conor Moore
Head of KPMG Private Enterprise
0 $0 in the Americas,
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023* Global Leader, Emerging Giants,
Acquisition Buyout Public listing Acquisition Buyout Public listing KPMG Private Enterprise,
KPMG International & Partner
KPMG in the US
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Global venture fundraising

2016–2023*
The denominator effect of the 2010s has transformed into the
$400 3,500 numerator effect of the 2020s, wherein equities’ decline has
led to the need to rightsize private market allocations at the
portfolio level among institutional managers. When the
$350
3,000 difficulties of outperformance in increasingly competitive
private markets are balanced against the challenges of
$300 liquidity management, even if returns remain steadier than in
2,500 public markets, it is clear that limited partners may be in more
of a wait-and-see approach before the fundraising cycle revs
$250 up again. Granted, given the recent bonanza in fund closings,
2,000 it is also likely that needed exposure to venture may be seen
$200
as having been largely met.
1,500 2023 continues to see headwinds

$150
affecting fund investors’ appetite for
$100
1,000
exposure, with just over $90
billion committed to the
500
$50 asset class, putting the year
$191.7
$204.1
$349.6
$280.6
$260.3
$331.1
$291.1
$93.4
$0 0
on pace for the lowest tally
2016 2017 2018 2019 2020 2021 2022 2023* in years.
Capital raised ($B) Fund count
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Global venture fundraising (#) by size Global first-time vs. follow-on venture funds (#)
2016–2023* 2016–2023*
3,000 100%
90%
2,500
80%
70%
2,000
60%
1,500 50%
40%
1,000
30%
20%
500
10%
0 0%
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
$1B+ $500M-$1B $250M-$500M $100M-$250M $50M-$100M Under $50M First-time Follow-on
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Top 10 global financings in Q2'23
1. Stripe — $6.9B, San Francisco, US — Fintech — SeriesI
2. SHEIN — $2B, Singapore — Retail — Series G
9 3. Inflection — $1.3B, Palo Alto, US — AI & ML — Early-stage VC
3 4. BYJU’S — $700M, Bengaluru, India — Edtech — Late-stage VC

1 7 6
5 5. Lenskart — $600M, New Delhi, India — E-commerce — SeriesI
10
2
4 6. Changfei — $532M, Wuhu, China — Semiconductors — Series A
8 7. Cacashop.com — $500M, Malta — E-commerce — Series B
8. Mandy — $500M, Indonesia — E-commerce — Early-stage VC
9. Getir — $475M, London, UK — E-commerce — Late-stage VC

Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise.
*As of June 30, 2023. Data provided by PitchBook, July 26, 2023
10. KT Cloud — $452.5M, Seoul, South Korea — Cloudtech — Series B
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Global US Americas | Europe | Asia
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VC investment in the US dropped slightly in Q2’23, despite a $6.8 billion raise by payments processing company Stripe. The deal was the largest VC raise in the US by far
during the quarter, followed by two large raises in the Artificial Intelligence area — a $1.3 billion raise by Microsoft-backed Inflection, and a $450 million raise by AI
company Anthropic. Additional large deals included a $421 million raise by specialized cloud computing provider CoreWeave and a $401 million raise by cell and gene
therapeutics company ElevateBio.
Deal speed continues to slow, despite availability of cash provider Sigma Computing raised $340 million. Companies focused on heath and biotech, drone
technologies, and alternative energy also continued to attract attention from VC investors in the
Uncertainty continued to permeate the VC market in the US during Q2’23, amidst ongoing US during Q2’23.
geopolitical challenges and concerns about inflation and interest rates. Despite the relatively
stable level of VC investment in the country, the total number of VC deals in the US continued to VC investor dynamics shifting rapidly
decline — falling to a level not seen since 2015. Dealmaking was very sluggish during Q2’23,
with most funding rounds at all deal stages taking longer to complete. AI-focused deals proved The challenging valuations environment and high interest rates in the US — in addition to the
one of the few exceptions, driven by skyrocketing interest in the space in the wake of ChatGPT’s sheer speed at which interest rates rose over the last eighteen months — have caused a radical
launch late in 2022. shift in VC investment dynamics, including the types of investors making VC deals and their
related investment strategies. Less traditional VC investors, many of whom embraced the VC
While traditional VC firms in the US still have cash they need to deploy, their caution has market during the pandemic, have shifted their allocations to lower risk investment options.
increased amid concerns about high valuations and the ability of startups to meet their
projections. Prudent startups have also focused on cutting their burn rates in order to preserve With IPO window firmly shut, waiting companies focus on improving profitability
cash and avoid the need to raise funds given current market conditions. These factors, combined The IPO environment in the US remained in drought conditions in Q2’23, with little expectation of
with dealmakers taking more time to agree to pricing, have contributed to the slowdown in a rebound prior to 2024. Given the ongoing closure, a number of companies that had previously
completed deals. planned for IPOs have turned their attention to improving their financial metrics in order to
Business productivity attracts interest from VC investors in US as companies look to do present themselves in a more firmly positive light once the IPO window does open. Both VC
more with less investors and startups believe the market will have a limited tolerance for companies that are not
profitable or within line of sight of becoming so. As such, companies are focusing on their sales
Similar to trends seen globally, AI attracted significant investment in the US during Q2’23, and profit margins, removing excess headcount, and deploying technology in order to improve
including a $1.3 billion raise by Inflection, a $450 million raise by Anthropic and a $300 million their operational efficiencies.
raise by OpenAI. The US also saw VC investors prioritizing software and business productivity
solutions during the quarter as companies across sectors continued to focus on right-sizing their For some companies waiting for the IPO door to open, the prognosis is more dire — with
businesses and optimizing their productivity using technology. During Q2’23, network-as-a- concerns that they will run out of cash before they can IPO. These companies are beginning to
service provider PacketFabric raised $372 million, while no-code business intelligence solutions look for way to shore up their funding in order to bridge the gap to a possible IPO.
#Q2VC
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Fundraising activity remains suppressed
Fundraising by VC funds in the US continued to be very subdued in Q2’23, with little

expectation of a rebound heading into the second half of the year. Many fund managers have
not started to raise new funds given the need to deploy the capital in their existing funds. Given
the caution permeating the VC investment in Q2’23, some VC firms have looked for creative
solutions to managing their existing funds.
Trends to watch for in Q3’23
VC investment in the US is expected to remain soft heading into Q3’23. Given the uncertainty
in the market and the possibility of further interest rate hikes at least during the rest of 2023,
VC investment in the US could fall further over the next quarter absent a Stripe-like transaction.
IPO activity is expected to remain shut down in Q3’23, although the number of companies
preparing or ready for an IPO suggests that should the window open late in the year, there
could be a resurgence in IPO activity heading into Q1’24 should the companies first out the
door find success.
AI will likely remain a very strong area of investment in Q3’23, with corporates taking a strong
role in making VC investments in the space. The alternative energy, EV, and EV battery
spaces are also expected to remain on the radar of VC investors in the US.
#Q2VC
21
Venture financing in the US

2016–Q2'23
After a steep slide from the heights of venture activity in 2021
$120 6,000 and early 2022, deal flow could be evening out in the US. This
is to be expected as market participants engaged in the
ongoing process of pricing in the multiple risks discussed
$100 5,000 above. However, it remains to be seen if this is now the new
normal, as tallies have returned to levels seen before the
boom of the early 2020s, or if there remain further ripple
$80 4,000 effects that have not yet been felt.
For the US in particular, as monetary policy could be now

better priced into the overall cost of capital and implications for
$60 3,000
pathways to revenue generation and fund timelines, there may
be a bit more certainty than elsewhere. However, the US still
also faces the most competitive atmosphere for capital
$40 2,000 deployment, so fund managers must continue to grapple with
striking the right balance between winning deals and being
judicious with capital infusions.
$20 1,000
$18.7
$21.5
$26.9
$17.2
$18.9
$22.6
$25.4
$23.3
$30.5
$32.0
$35.0
$48.6
$40.7
$38.1
$38.1
$34.8
$39.5
$37.5
$48.0
$46.8
$79.3
$83.8
$87.1
$97.2
$82.2
$76.6
$47.2
$40.6
$45.8
$39.8
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth
#Q2VC
22
Median deal size ($M) by stage in the US Up, flat or down rounds in the US
2016–2023* 2016–2023*
$35 100%
90%
$30
Up
80%
$25
70%
$20
60%
50%
$15 Flat
40%
$10.3
$10
$6.8 30%
$4.0
$5
20%
$2.0
10% Down
$0
2016 2017 2018 2019 2020 2021 2022 2023*
Angel & seed Early VC Later VC Venture growth 0%
2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
23
“
Median deal size ($M) by series in the US
2016–2023*
Startups in the AI space have
an opportunity right now
$120 where significant VC money
is delirious with FOMO,
chasing anything with the
$100 potential to be the next great
AI company. So, if their
investor pitch is good and
$80
they can sell it, they’ll be able
to get substantial backing —
possibly more than they
deserve — allowing them a
$60 runway to make a go of it.
$53.6 Some may end up being
winners, but definitely not all
”
$40 of them.
$34.5
$25.0
$20
$10.3
$2.8
$0 $0.2
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
Jules Walker
Senior Director
Business Development
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023. KPMG in the US
Note: Figures rounded in some cases for legibility.
#Q2VC
24
“
Median pre-money valuation ($M) by series in the US
2016–2023*
Early-stage companies that
$1,000 don’t require debt financing
are getting a lot of attention at
the moment. Companies with
$900
a unique product or
proposition are in prime
$800
position for attention from
investors, particularly in the
$700 technology sector. Technology
companies with tangible
$600 technologies and solutions,
and proven cash flows, are
$500 attracting the most attention —
as investors shy away from
$400 hype investing and look for
”
more stable opportunities.
$300 $308.5
$200
$168.0
$100
$80.6
$34.0
$10.0
$0 $4.5
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
Sam Lush
Director, Private Equity
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023.
The angel and Series D+ figure for 2023 YTD are based on non-normative sample sizes.
Group
KPMG in the US
Note: Figures rounded in some cases for legibility.
#Q2VC
25
Deal share by series in the US Deal share by series in the US

16,000 $350
14,000
$300
12,000
$250
10,000
$200
8,000
$150
6,000
$100
4,000
$50
2,000
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
26
Venture financing by sector in the US Venture financing by sector in the US

90% Commercial 90%

Products &
Services
80% Consumer Goods & 80%
Services
70% Software 70%
50% Other 50%
40% Media 40%
30% IT Hardware 30%
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
Supplies
0% 0%
Energy
2023*
2016
2017
2018
2019
2020
2021
2022
2023*
2016
2017
2018
2019
2020
2021
2022
#Q2VC
27
“
Corporate participation in venture deals in the US First-time venture financings of companies in the US
2016–Q2'23 2016–2023*
The US VC market is in a
$50 1,200 $30 6,000 bottoming out phase. On the one
hand, VCs have cash they want
$45 to deploy because sitting on it
1,000
won’t do them any good. On the
$25 5,000
$40 other, startups are having
valuation issues and price
$35 discovery challenges — and
800 $20 4,000 many are working to cut their
$30 burn rates right down so they
don’t need to raise funds. Given
$25 600 $15 3,000 these different forces, it’s no
surprise investment is down a
$20 lot. But I expect that in a couple
400 of quarters, those numbers will
”
$15 $10 2,000
jump right back up.
$10
200
$5 1,000
$5
$46.8
$15.4
$10.4
$13.1
$16.2
$17.3
$26.0
$16.9
$16.2
$16.5
$13.5
$19.4
$18.5
$24.1
$20.6
$39.5
$40.1
$40.8
$37.6
$36.6
$22.5
$16.9
$26.5
$21.9
$7.5
$9.9
$7.9
$6.7
$9.1
$9.9
$10.0
$10.0
$15.6
$15.6
$15.5
$25.9
$24.0
$6.9
$0 0
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 $0 0
2016 2017 2018 2019 2020 2021 2022 2023*
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Deal value ($B) Deal count Peter Kehrli
Partner
KPMG in the US
#Q2VC
28
Venture-backed exit activity in the US

2016–Q2'23
$300 600
$250 500
$200 400
$150 300
$100 200
$50 100
$128.5
$173.3
$267.9
$204.6
$217.7
$13.0
$18.7
$22.0
$10.8
$32.9
$20.4
$16.5
$31.7
$19.8
$37.2
$33.3
$38.1
$51.5
$45.1
$24.5
$16.8
$35.4
$75.9
$87.1
$33.5
$18.0
$16.3
$8.0
$6.5
$5.5
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Exit value ($B) Exit count
#Q2VC
29
Venture-backed exit activity (#) by type in the US Venture-backed exit activity ($B) by type in the US
2016–2023* 2016–2023*
2,500 $900
$800
2,000
$700
$600
1,500
$500
$400
1,000
$300
$200
500
$100
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
Acquisition Buyout Public listing Acquisition Buyout Public listing
#Q2VC
30
US venture fundraising
2016–2023*
$180 1,600 The sheer decline in fundraising activity speaks to multiple

factors, especially for US fund managers: 1) LPs’ rebalancing
of portfolios; 2) concerns around the viability of venture fund
$160 1,400 performance against equities and other private asset classes;
3) satiated market demand given the degree of commitments
$140 from 2021 and 2022.
1,200
$120
1,000 … as fundraising volume has slowed
$100 drastically, 2023 continues to
800 see slowed commitments in
$80
aggregate at a third of $100
600
$60 billion.
400
$40
$20 200
$160.3
$167.3
$33.3
$50.7
$45.7
$71.7
$70.7
$90.5
$0 0
2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
31
Venture fundraising (#) by size in the US Venture fundraising ($B) by size in the US
2016–2023* 2016–2023*
1,400 $180
$160
1,200
$140
1,000
$120
800 $100
$80
600
$60
400
$40
200
$20
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
$1B+ $500M-$1B $250M-$500M $100M-$250M $50M-$100M Under $50M $1B+ $500M-$1B $250M-$500M $100M-$250M $50M-$100M Under $50M
#Q2VC
32
First-time vs. follow-on funds (#) in the US First-time vs. follow-on funds ($B) in the US
2016–2023* 2016–2023*
100% 100%
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
First-time Follow-on First-time Follow-on
#Q2VC
33
Global | US Americas Europe | Asia
#Q2VC
34
VC investment across the Americas held relatively steady in Q2’23. The US continued to account for the lion’s share of investment in the region, including a $6.8 billion
megadeal by Stripe. Outside of the US, VC investment in Canada was relatively strong this quarter, while VC investment in Brazil remained subdued.
Pullback extends beyond late-stage deals; profitability becoming a major factor in Brazil continues to see slowdown in VC investment, longer-term outlook remains positive
dealmaking
VC investment in Brazil remained relatively weak in Q2’23 amidst a combination of macroeconomic
Following on a trend seen in Q1’23, late-stage deals saw the largest pull-back in terms of VC and political uncertainty, including the turbulence that has resulted from the change in presidential
investment in the Americas, particularly in the US, both in terms of average deal size and total regime in the wake of the Q4’22 election. With major tax reforms on the horizon, many VC investors
number of deals. In Q2’23, however, the pullback began to infect other deal stages, with have pulled back from making major investments while awaiting more clarity on the changes that
companies at earlier deal stages finding it more challenging to raise funds than they have in will be implemented and the impact they will have on both corporates and on startups.
recent quarters.
Despite the ongoing slowdown in VC funding, there continued to be a significant amount of
VC investors increasingly emphasised not only pathways to profitability, but actual profitability optimism for Brazil’s longer-term VC market outlook. The country’s VC ecosystem has matured
and related financial metrics. During Q2’23, VC investors prioritized KPIs such as revenue, quite rapidly in recent years, with a growing number of VC firms, VC funds, corporates, and other
EBITDA, and unit economics when making their investment decisions. VC investors also knowledgeable market players participating in the market. These players will likely help fuel a
focused many of their investments on startups with robust business models that allow them to resurgence in VC investment in Brazil and across Latin America once some of the uncertainty
generate revenue without buying views, such as software companies with subscription models. dissipates.
VC investment in Canada remains solid AI gains focus as VC investors look for their next home run
Canada attracted another solid quarter of VC investment during Q2’23, helped by a $318 million Sectors almost across the board continued to face challenges in Q2’23. AI — and its sub-vertical
raise by carbon capture technology company Svante, a $175 million raise by vacation rental generative AI in particular — was one very noticeable exception, with interest from investors rising
management company Hostaway, a $120 million raise by blockchain protocol company dramatically in the wake of OpenAI’s introduction of ChatGPT in late 2022 the announcement of a
LayerZero, and a $110 million raise by Abdera Therapeutics. $10 billion investment in OpenAI by Microsoft in Q1’23, and other generative AI announcements by
other major tech companies. In Q2’23, Google made a $450 million investment in Anthropic, while
With the exception of a handful of larger deals, VC investments in Canada continued to revolve Amazon announced that it would make two language models available through its Amazon Web
around small and mid-sized deals during Q2’22. Companies from across a wide variety of Services to support the building of bots by its customers.4 Microsoft-backed AI firm Inflection also
sectors attracted funding, highlighting the enormous diversity of Canada’s startup ecosystem. had a massive $1.3 billion deal late in the quarter.
Corporates continued to be quite active in Canada, with CVC participation expected to remain
resilient heading into Q3’23 as corporates look for deals and synergistic opportunities. AI has quickly become a target sector for VC investors looking for their next home run or to avoid
the fear-of-missing-out (FOMO), in part because of the multiplier effect that AI offerings could have
4 https://www.wired.com/story/amazon-is-joining-the-generative-ai-race/ in driving widespread disruption across industries.
#Q2VC
35
Fintech continues to drive VC investment in Brazil; deal sizes much smaller Trends to watch for in Q3’23
Fintech continued to account for the largest share of VC investment in Brazil, although deal Heading into Q3’23, VC investment is expected to remain relatively subdued across the Americas
sizes were much smaller than those seen during the peak quarters of Q2’21 and Q4’21. The as VC investors remain very cautious in light of the ongoing market uncertainty. While VC
largest deals of the quarter included a $21.8 million raise by auto shop focused budgeting and investment in Brazil will likely remain soft in Q3’23, the significant amount of dry powder and the
claims management software company Cilia. Business productivity solutions companies and growing number of market players is expected to drive a resurgence in activity once uncertainty
energy-focused fintech companies also attracted attention in Q2’23. wans and interest rates begin to fall.
In Canada, cleantech saw quite a strong amount of activity in Q2’23. In addition to the large Mega-deals will likely remain rare, although there could be an increase in mature startups raising
Svante raise, INCA Renewtech raised $39.6 million, Peak Power raised $35 million, and funding rounds in order to give liquidity to their early employees. Given the amount of dry power
ChargeLab raised $30 million.
still in the market, very hot sectors like AI will likely continue to attract outsized investments
Banking industry challenges could spark acceleration of new fintech offerings heading into Q3’23. Investments in alternative energy, B2B productivity, and health and biotech
are also expected to remain somewhat resilient over the next quarter.
During Q2’23, the US banking industry continued to feel the ripples of the events from financial
market turmoil in Q1’22 and the resonating impact it had across financial institutions both in the
US and globally. While this may have caused a slowdown in fintech funding during Q2’23, over
the long-term, the ripples could potentially drive investment into the development and
acceleration of new banking solutions focused on startups in order to fill perceived gaps.
#Q2VC
36
Venture financing in the Americas

2016–Q2'23
After softening to levels seen pre-2021 boom, now venture
$120 7,000 dealmaking appears to have plummeted to new lows. Although
those figures may tick up somewhat, activity definitely has
cooled to resemble pre-2018 figures, even, in some measures.
6,000
$100
5,000 … dealmaking may have

$80
begun to even out; 2022 took
4,000 the brunt of the plunge in financing
$60
activity, and now figures are
3,000
steadying around pre-2021
$40
2,000
levels.
$20
1,000
$105.1
$33.8
$83.7
$22.2
$27.5
$19.4
$18.1
$19.8
$24.1
$26.8
$24.5
$32.5
$36.4
$50.8
$42.4
$41.0
$41.3
$37.2
$41.7
$39.4
$50.5
$49.7
$93.5
$96.9
$91.0
$82.1
$50.4
$43.2
$47.7
$42.9
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
37
Median deal size ($M) by stage in the Americas Up, flat or down rounds in the Americas
2016–2023* 2016–2023*
$35 100%
90%
$30
Up
80%
$25
70%
60%
$20
50%
Flat
$15
40%
$10.7
$10 30%
$6.7
20%
$6.0
$5
10% Down
$2.0
$0 0%
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
38
Median deal size ($M) by series in the Americas

2016–2023*
$120
$100
$80
$60
$54.0
$40
$35.0
$25.0
$20
$10.0
$2.5
$0 $0.2
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
#Q2VC
39
Median pre-money valuation ($M) by series in the Americas

2016–2023*
$1,200
$1,000
$800
$600
$400
$308.5
$200
$172.3
$81.2
$33.6 $10.0
$0 $4.45
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023. 2023. The angel figure for 2023 YTD is based on a non-normative sample.
#Q2VC
40
Deal share by series in the Americas Deal share by series in the Americas
18,000 $350
16,000
$300
14,000
$250
12,000
10,000 $200
8,000
$150
6,000
$100
4,000
$50
2,000
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
41
Venture financing of VC-backed companies by sector in the Americas Venture financing of VC-backed companies by sector in the Americas
2016–2023*, # of closed deals 2016–2023*, VC invested ($B)
90% Commercial 90%

Products &
Services
Services
70% Software 70%
50% Other 50%
40% Media 40%
30% IT Hardware 30%
20% HC Services & 20%

Systems
10% HC Devices & 10%
Supplies
0% 0%
Energy
2023*
2016
2017
2018
2019
2020
2021
2022
2023*
2016
2017
2018
2019
2020
2021
2022
#Q2VC
42
“
Venture financing in Canada
2016–Q2'23
VC investment in Canada
was up slightly this quarter.
$6,000 450
A number of factors are
contributing to this stability,
400
including the fact many
$5,000
Canadian VC deals focus on
350
small and medium-size
companies — which means
$4,000 300 we haven’t seen too many
down rounds. Canada’s
250 startup ecosystem is also
$3,000 very diverse. As such, if one
200 industry sees investment
falter a bit, others tend to
”
$2,000 150 pick up the slack.
100
$1,000
$1,855.2
$1,643.6
$1,404.2
$1,175.3
$1,126.0
$1,493.6
$1,399.8
$1,131.5
$1,327.4
$2,733.9
$5,053.1
$2,576.9
$3,146.9
$3,813.5
$2,477.2
$1,714.9
$1,442.5
$2,079.6
$589.7
$469.8
$553.9
$714.2
$348.5
$792.0
$989.2
$896.1
$902.6
$755.6
$934.6
$955.4
50
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($M) Deal count Ryan Forster

Partner,
KPMG in Canada
#Q2VC
43
Venture financing in Mexico

2016–Q2'23
$1,800 80
$1,600 70
$1,400
60
$1,200
50
$1,000
40
$800
30
$600
20
$400
$1,171.4
$1,699.1
10
$104.8
$127.9
$320.7
$146.7
$155.8
$273.9
$651.7
$288.5
$583.9
$856.5
$735.3
$278.9
$176.6
$302.9
$200
$67.8
$56.4
$13.4
$54.4
$71.9
$20.4
$26.4
$13.7
$70.4
$81.5
$81.0
$53.3
$59.8
$78.3
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($M) Deal count
#Q2VC
44
“
Venture financing in Brazil
2016–Q2'23
Despite the decline in VC
$3,000 250
funding, Brazil continues to be
the major VC hub in Latin
America, with a growing
ecosystem of players ranging
$2,500
200 from VC firms to corporates to
entrepreneurs. While the VC
market in Brazil is experiencing
$2,000 a downturn at the moment,
150 the robust ecosystem has
dramatically improved the
$1,500 environment for raising capital in
the country — which will have a
100 positive impact over the longer
$1,000 term once market conditions
”
improve.
50
$500
$1,952.9
$1,018.1
$1,138.6
$2,607.8
$1,963.2
$2,541.2
$1,189.3
$120.6
$165.2
$233.1
$217.0
$267.2
$463.9
$121.3
$284.1
$133.0
$551.1
$417.1
$579.7
$579.5
$872.8
$684.1
$958.6
$619.9
$374.8
$211.4
$230.1
$97.5
$66.5
$88.6
$0 0
2016 2017 2018 2019 2020 2021 2022 2023

Daniel Malandrin
Partner, Venture Capital & Corporate Ventures
KPMG in Brazil
#Q2VC
45
Top 10 financings in Q2'23 in Americas
10
8 1. Stripe — $6.9B, San Francisco, US — Fintech — SeriesI
3 2. Inflection — $1.3B, Palo Alto, US — AI & ML — Early-stage VC

4 6
9 5
1 2 3. Anthropic — $450M, San Francisco, US — AI & ML— Series C
7
4. CoreWeave — $421M, Roseland, US — Business software — Series B
5. ElevateBio — $401M, Waltham, US — Biotech — Series D
6. Nexamp — $400M, Boston, US — Cleantech — Late-stage VC
7. PacketFabric — $372.7M, Culver City, US — Business software — Late-stage VC
8. Amplify — $350M, New York, US — Edtech — Series C
9. Zipline — $330M, San Francisco, US — Logistics — Series F
10. Svante — $318M, Burnaby, Canada — Cleantech — Series E
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise.
*As of June 30, 2023. Data provided by PitchBook, July 26, 2023
#Q2VC
46
Global | US | Americas Europe Asia
#Q2VC
47
VC investment in Europe stops slide

VC investors in Europe continued to play a waiting game in Q2’23, with investors holding back on making major investments, pa rticularly late-stage investments given the
amount of uncertainty in the market and the lack of exit opportunities. VC investment did, however, hold steady during the qu arter — a positive sign following four
straight quarters of declining investment.
VC investors embrace AI; EU passes major AI-focused regulation lower valuations of companies in the region, the increasingly challenging economic
environment and the turbulence in the banking market has led some US investors to pull back
AI and deep learning technologies were a hot area of investment in Europe during Q2’23, with from making major investments in Europe.
UK-based Quantexa raising $129 million during the quarter to earn unicorn status — one of only a
handful of startups in the region to do so this quarter. In Q2’23, the European Union also passed VC investment in UK finding a new normal
the AI Act, a detailed regulation governing the use of AI in the region and requiring generative AI
systems in particular to be reviewed prior to commercial launch. The regulation also bans real- VC investment in the UK picked up quarter-over-quarter — although it remained subdued
time biometric ID systems.5 During the quarter, the UK also pitched its desire to become the compared to the banner quarters seen in 2021 and early 2022 — helped by a $475 million
home of AI safety regulations.6 raise by delivery service Getir, and a $250 million raise by mobile app building company
Builder.ai. Given the political and economic turmoil in the UK and high interest rates raising the
Energy and cleantech attracting VC investments across Europe bar on return requirements and causing investors to question their capital asset allocations, the
more moderate level of investment could represent a new normal for the UK until there is a
With no end in sight to the Russia-Ukraine conflict, alternative energy and cleantech continued to
reasonable period of stability. VC fundraising has also slowed down considerably in the UK,
attract attention from VC investors in Europe, although ticket sizes were relatively modest during with some funds closing at much lower levels than initially envisioned.
Q2’23. Interest in the space was incredibly diverse both geographically and at a product and
solutions level with Germany’s 1Komma5 raising $232.1 million leading the way followed by Germany sees steady investment in Q2’23
German energy storage company Jolt Energy raising $165.1 million, London-based atomic
technology company Core Power raising $100 million, Austria-based cleantech Neoom raising Germany saw VC investment hold relatively steady in Q2’23, led by a $232 raise by energy
$44.9 million, Israel-based thermal sensing for autonomous electric vehicles firm Adasky raising firm 1Komma5, a $194 million raise by Get Your Guide and a $165.1 million raise by Jolt
$30 million, and Ireland-based renewables-focused energy transmission company SuperNode Energy. Solutions focused on ESG continued to be quite attractive to VC investors in Germany,
raising $17.35 million. in addition to AI and solutions focused on business productivity. There was also a small
renaissance in health and biotech in Germany in Q2’23, with a $109.8 million raise by medical
Amidst uncertainty, US VC investors stepping back from investments in Europe records company Patient21 and a $52 million raise by drug discovery company Ariceum.
Many of the larger VC investments in Europe rely on the participation of US investors. While US
investors flocked to Europe in previous quarters, in part due to the excellent opportunities and
5
https://www.cnbc.com/2023/06/14/eu-lawmakers-pass-landmark-artificial-intelligence-regulation.html
6 PM: UK Can Be 'Home Of Global AI Safety Regulation' | Silicon UK
#Q2VC
48
Softness continues in the Nordics VC investment soft in Israel during Q2’23
VC investment in the Nordics region during Q2’23 remained soft compared to the highs seen VC investment in Israel remained soft in Q2’23 as tech startups continued to focus on becoming
during 2021 and 2022, although it was relatively consistent to the levels seen prior to the more efficient and profitable, cutting head count and reducing their costs. Despite smaller deal
pandemic. While the amount of VC dry powder might be similar in early-stage to previous sizes, Israel continued to see a diversity of companies raising funding; during the quarter, network
years the investor characteristics have shifted significantly, and the international growth management firm Coronet raised $75 million, medical device company Magenta Medical raised
funding is scarce. The investor focus is more on companies able to show capital efficient $55 million, healthtech Healthy.io raised $50 million, and fintech Novidea raised $50 million.
growth with optional pathways to profitability. Health and biotech investment remained resilient,
while alternative energy and EV technologies continued to attract strong interest. Trends to watch for in Q3’23
Startup ecosystem in Ireland extends reach While VC investors in Europe continue to have dry powder available to them, they will likely
continue to be reluctant to spend it given both current market conditions and concerns about
VC investment in Ireland remained slow this quarter, despite a $53.6 million raise by unified whether they will be able to raise new funds given less risk-averse LPs now have more investment
payments company NomuPay and a $32.5 million raise by medical device company options available to them. Exit activity is also expected to remain limited, with startups and their
Neuromod. Ireland’s ecosystem showed its reach across Europe in Q2’23. Jolt Energy, which investors playing a waiting game in the hope that conditions improve and the market stabilizes.
raised $165.1 million this quarter, was founded by Irish entrepreneurs — who focused their
startup on the German market given its much larger EV potential. The entire gamut of alternative energy and cleantech is expected to remain a robust area of
investment in Europe, in addition to AI, and health and biotech. Over the next few quarters, the
VC market in Austria evolving rapidly fintech space could begin to see some consolidation in Europe as companies look to achieve the
scale needed for their business models to become profitable.
While total VC investment in Austria remains quite small compared to other jurisdictions in
Europe, the country’s VC market is evolving and maturing at a rapid pace — with a growing
number of scale-ups in sectors ranging from crypto (BitPanda) and edtech (GoStudent) to
proptech (PlanRadar). The first, BitPanda, was the country’s first tech startup to achieve
unicorn status. The breath of VC funds operating in the market has also grown, with new funds
being introduced on a regular basis — most focused on early-stage investments. Similar to
other jurisdictions, Austria’s VC market faced some pressure in Q2’23, with a number of
startups choosing to conduct extension rounds rather than all new funding rounds.
#Q2VC
49
Venture financing in Europe

2016–Q2'23
Venture financing volume slid quarter over quarter by mid
$45 4,500 year but that tally is likely to tick upward once additional
undisclosed deals are brought to light and further financing
$40 4,000 metrics are confirmed. As a result, it is likely that dealmakers
and startups alike are now growing more accustomed and
$35 3,500 experienced to the volatile environment, and a plateau in
activity is now being broached.
$30 3,000
… after sustained volatility, it could be
$25 2,500
that European startup
$20 2,000 ecosystems are beginning
$15 1,500 to see priced-in dealmaking
$10 1,000
levels…
$5 500
$10.6
$11.2
$11.8
$11.4
$12.2
$10.8
$11.6
$11.4
$11.9
$17.4
$18.5
$28.9
$39.2
$29.9
$32.3
$39.7
$32.9
$21.3
$18.4
$14.4
$13.5
$5.0
$6.7
$4.8
$5.4
$5.8
$7.4
$7.1
$9.5
$7.8
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
50
Median deal size ($M) by stage in Europe Up, flat or down rounds in Europe
2016–2023* 2016–2023*
$12 100%
90%
$10 Up
80%
$8 70%
$7.2
60%
$6
50%
Flat
$4.5 40%
$4
30%
$2 $2.0
20%
$1.32
10% Down
$0
2016 2017 2018 2019 2020 2021 2022 2023*
0%
2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
51
Median deal size ($M) by series in Europe

2016–2023*
$160
$140
$120
$100
$86.4
$80
$60
$45.2
$40
$20 $22.0
$10.00
$1.7
$0 $0.6
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
The Series D+ figure for 2023 YTD are based on non-normative sample sizes.
#Q2VC
52
Median pre-money valuation ($M) by series in Europe

2016–2023*
$1,200
$1,000
$800
$600
$400
$301.0
$280.5
$200
$47.9
$5.4 $23.6
$0 $3.4
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
The figures for Series C and D or later valuations in 2023 to date are based on non-normative sample sizes.
#Q2VC
53
Deal share by series in Europe Deal share by series in Europe

8,000 $100
$90
7,000
$80
6,000
$70
5,000
$60
4,000 $50
$40
3,000
$30
2,000
$20
1,000 $10
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
54
European venture financings by sector European venture financings by sector

90% Commercial 90%

Products &
Services
Services
70% Software 70%
50% Other 50%
40% Media 40%
30% IT Hardware 30%
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
Supplies
0% 0%
Energy
2023*
2016
2017
2018
2019
2020
2021
2022
2023*
2016
2017
2018
2019
2020
2021
2022
#Q2VC
55
Corporate VC participation in venture deals in Europe First-time venture financings of companies in Europe
2016–Q2'23 2016–2023*
$18 900 $12 5,000
$16 800 4,500

$10
4,000
$14 700
3,500
$12 600 $8
3,000
$10 500
$6 2,500
$8 400
2,000
$6 300 $4
1,500
$4 200
1,000
$2
$2 100 500
$13.9
$13.8
$11.0
$16.9
$14.0
$16.9
$14.4
$10.3
$3.0
$3.9
$4.9
$4.2
$5.4
$9.0
$3.0
$8.6
$2.9
$2.2
$1.8
$2.0
$2.0
$3.0
$2.2
$2.8
$3.9
$6.2
$3.6
$4.2
$4.0
$5.3
$5.0
$4.2
$4.3
$6.3
$8.3
$9.1
$6.7
$5.4
$0 0 $0 0
Q1Q2Q3Q4Q1Q2 Q3Q4Q1Q2 Q3Q4Q1Q2Q3Q4 Q1Q2Q3Q4 Q1Q2Q3Q4Q1Q2 Q3Q4Q1Q2 2016 2017 2018 2019 2020 2021 2022 2023*
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Deal value ($B) Deal count
#Q2VC
56
Venture-backed exit activity in Europe

2016–Q2'23
$80 400
$70 350
$60 300
$50 250
$40 200
$30 150
$20 100
$10 50
$38.7
$12.8
$10.0
$10.8
$34.8
$31.7
$66.7
$27.2
$15.9
$16.3
$5.2
$8.2
$6.8
$6.5
$4.2
$2.5
$7.3
$3.4
$4.3
$2.0
$5.5
$3.3
$2.6
$5.2
$1.8
$5.5
$4.5
$6.1
$2.8
$1.0
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
57
Venture-backed exit activity (#) by type in Europe Venture-backed exit activity ($B) by type in Europe
2016–2023* 2016–2023*
1,400 $180
$160
1,200
$140
1,000
$120
800
$100
600 $80
$60
400
$40
200
$20
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*

#Q2VC
58
“
European venture fundraising
2016–2023*
In the UK, we’ve had a period of
After a record-breaking stretch for capital
$40 400 both political and economic
committed, the slowdown has finally hit the
turmoil, which has made it
European continent, with the pace of
difficult to really drive any kind
commitments slowing dramatically and total
$35 350 of sustained funding or VC
capital pledged on pace for tallies similar in
2015. Current volatility may be actually
investment. The market is
exacerbated by the natural slowdown in willing and many businesses
$30 300
fundraising cycles after LPs garnered their have strong fundamentals,
desired exposure. but we need a period of stability
$25 250 in order to make VC deals
happen — and that’s difficult
when no one is clear yet about
$20 200 ... at $9.6 billion, 2023 is the trajectory of interest rates
now on less of a slower start and inflation. I would like to
believe we’re now past the
$15 150 in terms of capital worst of it and we’re entering a
commitments in aggregate more positive environment
$10 100 where buyers will be happy to
”
than at first feared spend again.
$5 50
$9.6
$18.8
$25.4
$19.8
$24.7
$29.3
$34.0
$29.8
$0 0
2016 2017 2018 2019 2020 2021 2022 2023*

Robert Baxter
Head of Corporate Finance
KPMG in the UK
#Q2VC
59
Venture fundraising (#) by size in Europe First-time vs. follow-on venture funds (#) in Europe
2016–2023* 2016–2023*
300 100%
90%
250
80%
70%
200
60%
150 50%
40%
100
30%
20%
50
10%
0 0%
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
#Q2VC
60
“
Venture financing in the United Kingdom
2016–Q2'23
Rising interest rates have
dampened some of the
$18 1,200
enthusiasm globally for
venture capital investments.
$16
While we continue to see
1,000
record amounts of dry powder
$14 around the world, much of
this has previously been
$12 800 driven by the influx of ‘tourist’
investors seeking higher
$10 returns in a low interest rate
600 environment. In the current
$8 market, higher interest rates,
we may see the opposite
$6 400 effect, giving many tourist
investors pause before
”
$4 doubling down on VC.
200
$2
$10.5
$15.9
$3.7
$3.8
$1.7
$1.6
$1.5
$1.7
$1.7
$2.6
$2.8
$4.4
$3.5
$2.5
$2.7
$4.9
$4.0
$3.6
$3.3
$3.2
$4.4
$6.3
$9.4
$9.7
$8.6
$8.8
$6.4
$5.1
$4.6
$4.1
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count

Warren Middleton
Lead Partner for Emerging Giants,
Center of Excellence in the UK
KPMG in the UK
#Q2VC
61
Venture financing in London

2016–Q2'23
$16 700
$14 600
$12
500
$10
400
$8
300
$6
200
$4
$2 100
$13.5
$3.6
$0.9
$1.0
$0.9
$0.9
$0.9
$2.1
$2.0
$3.5
$1.8
$1.2
$1.6
$2.2
$2.8
$1.7
$2.6
$1.9
$2.5
$3.1
$4.0
$7.6
$6.5
$7.0
$5.5
$6.6
$4.5
$3.3
$3.2
$2.8
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
62
“
Venture financing in Ireland
2016–Q2'23
VC funds benefited
significantly in the years prior
$4,000 200
to 2022 when interest rates
180 were low and non-traditional
$3,500 investors were looking for
160 alternative investment
$3,000 opportunities. With a higher
140 interest rate environment,
investors have more choice as
$2,500
120 to where to invest their money.
They can invest in bonds or
$2,000 100 simply put their money on
deposit and secure a
80
$1,500 reasonably risk-free return.
This environment makes it
60
more difficult for funds to
$1,000
40
secure investment and
ultimately for companies to
”
$3,369.4
$500
$131.6
$427.7
$413.1
$169.9
$238.0
$189.1
$123.9
$178.4
$440.8
$108.0
$155.2
$101.5
$125.7
$101.7
$288.3
$292.3
$645.2
$389.0
$886.7
$342.8
$437.7
$465.0
$461.1
$135.2
$266.9
$183.9
$154.8
secure VC investment.
$51.5
$90.4
20
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Anna Scally
Partner, Head of Technology & Media
KPMG in Ireland
#Q2VC
63
“
Venture financing in Germany
2016–Q2'23
There likely won’t be a
$7,000 450 significant change in the
underlying macroeconomic
400
circumstances over the next
$6,000 few quarters, so I expect we’ll
see a more linear way forward.
350
This isn’t necessarily a bad
$5,000 thing. At the end of the day, if
300 we have robust valuations,
robust business models, and
$4,000 250 people can appreciate that
money has a cost again, it
200 would actually be a healthy
”
$3,000
development.
150
$2,000
100
$1,288.7
$1,759.7
$1,459.7
$1,221.9
$1,477.8
$1,975.4
$1,577.2
$1,343.8
$1,935.0
$2,185.8
$2,029.0
$3,382.8
$4,015.0
$3,921.3
$6,602.1
$2,663.8
$5,822.5
$3,927.7
$1,824.2
$2,031.8
$1,919.1
$1,000
$623.8
$576.7
$535.1
$634.7
$550.3
$900.4
$918.9
$915.3
$835.3
50
$0 0
2016 2017 2018 2019 2020 2021 2022 2023

Tim Dümichen
Partner
KPMG in Germany
#Q2VC
64
Venture financing in Berlin

2016–Q2'23
$6,000 180
160
$5,000
140
$4,000 120
100
$3,000
80
$2,000 60
40
$1,000
$2,277.7
$1,039.8
$1,214.5
$1,253.0
$1,320.6
$1,272.8
$1,867.1
$2,067.8
$4,845.9
$1,501.2
$3,741.9
$1,053.1
$235.2
$350.4
$179.6
$360.2
$319.3
$409.4
$426.5
$411.3
$200.0
$840.1
$522.0
$416.9
$679.7
$640.0
$860.1
$558.0
$988.8
$829.3
20
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
65
“
Venture financing in Austria
2016–Q2'23
Austria is quickly gaining ground
as a VC hub in Europe, although
$700 60 we are still quite small compared to
some. The current geopolitical and
macroeconomic situation hasn’t
$600 helped with growing our VC
50
ecosystem, although we’re still
seeing funds being raised and
$500 companies being supported. This
40 year it has become much harder
for new startups to raise funds here.
$400 As an entrepreneur, if you're not
30 managing a business with
sustainable profit margins —
$300 especially if your company isn't
cash flow positive after Series A —
20 you're likely to encounter
$200 substantial difficulties trying to
secure additional funds. On a more
positive note, the early-stage and
”
10
$100 seed stage remain robust.
$137.5
$120.8
$106.5
$120.0
$513.8
$627.1
$643.2
$266.6
$160.8
$120.5
$11.0
$18.7
$65.9
$26.3
$42.5
$31.2
$44.5
$13.9
$49.0
$29.0
$65.9
$19.1
$33.4
$40.5
$81.9
$46.8
$68.8
$95.7
$70.2
$60.0
$0 0
2016 2017 2018 2019 2020 2021 2022 2023

Leonardo Peikoff
Head of Startup, ScaleUp
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023 Growth Management
KPMG in Austria
#Q2VC
66
Venture financing in Spain

2016–Q2'23
$1,800 250
$1,600
200
$1,400
$1,200
150
$1,000
$800
100
$600
$400
50
$1,540.9
$1,503.8
$1,218.8
$574.1
$380.3
$220.8
$355.0
$158.0
$160.6
$287.5
$221.0
$161.8
$374.9
$273.1
$337.3
$189.2
$178.5
$505.8
$402.4
$374.2
$494.1
$318.0
$537.0
$503.9
$498.7
$712.5
$827.6
$694.9
$736.9
$200
$81.1
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
67
Venture financing in France

2016–Q2'23
$7,000 500
450
$6,000
400
$5,000 350
300
$4,000
250
$3,000
200
$2,000 150
100
$1,000
$1,350.2
$2,004.3
$1,367.4
$1,346.2
$1,489.8
$1,350.0
$1,193.4
$1,416.8
$1,943.7
$1,414.9
$2,826.4
$2,040.6
$3,974.8
$4,012.4
$2,626.1
$6,263.9
$3,218.7
$2,550.6
$2,184.3
$2,694.4
$1,859.0
$870.7
$551.3
$694.3
$992.8
$925.7
$750.4
$810.9
$963.1
$847.4 50
$0 0
2016 2017 2018 2019 2020 2021 2022 2023

#Q2VC
68
Venture financing in Paris

2016–Q2'23
$4,000 250
$3,500
200
$3,000
$2,500
150
$2,000
100
$1,500
$1,000
50
$1,129.9
$1,039.9
$2,026.2
$1,112.7
$2,864.6
$2,284.0
$1,633.6
$3,549.1
$2,067.7
$1,888.4
$1,127.6
$1,369.5
$500
$289.2
$327.0
$495.8
$512.9
$350.3
$486.1
$496.4
$291.5
$710.8
$911.8
$436.1
$674.8
$841.9
$880.4
$658.9
$992.1
$849.6
$916.1
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
#Q2VC
69
“
Venture financing in the Nordics
2016–Q2'23
Here in the Nordic region
$7,000 600 capital-efficiency with
optional pathways to
profitability is the new
$6,000 normal. Due to uncertainty
500
of geopolitical and
macroeconomic
$5,000 environment every
400 investment and every dollar
that is spent is being
$4,000 objectively looked at to
decide whether it is a good
”
300
use of capital.
$3,000
200
$2,000
100
$1,000
$1,311.6
$1,013.1
$1,140.3
$2,154.4
$1,045.8
$1,588.1
$2,433.2
$2,012.6
$4,325.7
$6,234.1
$2,108.3
$2,303.9
$2,872.9
$2,466.8
$2,463.0
$3,501.6
$1,200.8
$306.8
$352.9
$576.7
$661.4
$544.3
$528.2
$815.9
$753.8
$804.6
$585.9
$815.1
$908.7
$963.6
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Jussi Paski
Head of Startup & Venture Services
2016 2017 2018 2019 2020 2021 2022 2023 KPMG in Finland
#Q2VC
70
“
Venture financing in Israel
2016–Q2'23
The uncertainty of the global
$6,000 300 economy is reverberated locally
and enhanced due to internal
strains (proposed judicial reform,
$5,000 250
increasing inflation and interest
rates). Trends dominating the
market for the past two quarters
continue to pursue — decrease in
$4,000 200
number of exits (M&As, no IPOs)
with one major acquisition
decreasing volumes of
$3,000 150 investments with an absolute
majority of early-stage (Seed and
Round A) deals, and a decrease in
$2,000 100 number of new tech companies
established. Yet there are
stakeholders who believe the
$1,000 50 current conditions have brought
$1,050.3
$1,247.4
$1,053.4
$1,129.7
$1,083.6
$1,286.5
$1,080.0
$1,116.8
$1,639.7
$1,620.4
$2,212.5
$2,852.2
$2,748.8
$5,036.1
$3,254.7
$3,692.7
$1,726.7
$1,483.2
tech companies to their true value
$894.7
$777.5
$559.9
$524.6
$278.8
$658.8
$870.3
$740.5
$684.0
$803.2
$891.8
$873.9
after a period of unrealistic hype,
posing good investment and
$0 0
acquisition opportunities going
”
forward.
2016 2017 2018 2019 2020 2021 2022 2023
Dina Pasca-Raz
Head of Technology, #Q2VC
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Head of International Tax
KPMG in Israel 71
Top 10 financings in Q2'23 in Europe
1. Cacashop.com — $500M, Malta — E-commerce — Series B
5 2. Getir — $475M, London, UK — E-commerce — Late-stage VC

2
4 6
3. Teylor — $299.05M, Zurich, Switzerland — Fintech — Late-stage VC
8
9
7 4. Builder — $250M, London, UK — AI & ML — Series D
3 10
5. 1Komma5 — $232.1M, Hamburg, Germany — Climatetech — Series B
6. GetYourGuide — $194M, Berlin, Germany — Consumer — Series F
1
7. Ynsect — $175M, Evry, France — Agtech — Series D
8. JOLT Energy — $165.1M, Munich, Germany — Cleantech — Late-stage VC
9. Odoo — $162.2M, Grand-Rosiere, Belgium — Business software — Late-stage VC
10. Distalmotion — $152.8M, Epalinges, Switzerland — Surgical devices — Series F

Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023.
Data provided by PitchBook, July 26, 2023
#Q2VC
72
Global | US | Americas | Europe Asia
#Q2VC
73
VC investment in Asia remained relatively soft in Q2’23, despite a $2 billion raise by Singapore-based online retailer Shein and a $700 million raise by India-based Byju.
Alternative energy and battery storage continue to attract interest in Asia Despite small uptick quarter-over-quarter, VC investment in India remains very subdued
While VC investment in Asia fell for the sixth straight quarter in Q2’23, there were pockets of VC investment in India rose slightly in Q2’23, although it remained very subdued compared to
strength in the VC space. The alternative energy, energy technology, and battery storage space many historical quarters — including the same quarter last year, which saw over $8 billion in VC
continued to be a very attractive area of VC investment in the region — particularly in China, investment. The largest deals in Q2’23 in India included a $700 million raise by edtech Byju, a
where lithium-ion battery component company Libode raised $374.7 million, solar technology $600 million raise by online optical platform Lenskart, and a $168.1 million raise by mobile
firm Qingdian Photovoltaic raised $217.5 million, and fusion technology company Neo Fusion balance management app company True Balance.
raised $216.1 million during the quarter. During Q2’23, Japan-based Kyoto Fusioneering raised
$79 million. Fintech, edtech, and gaming continued to attract solid interest and VC investment in India during
Q2’23. Agritech also remained high on the radar of VC investors in the country, although it
Despite down rounds, follow-on funding remains key driver of investment in Asia remains relatively nascent industry. As such, many of the agritech deals to date have been
relatively small in terms of deal value, although deal sizes are expected to grow over time.
At mid-year, the percentage of down rounds compared to the total number of funding rounds in
Asia was at its highest level in over ten years. While this may have affected the size and Stock market performance helping drive investor confidence in Japan
number of large mega-deals during the quarter, existing companies looking to attract follow-on
funding continued to draw the lion’s share of VC investment at more modest deal values. While Japan’s stock market has performed admirably in recent months, as evidenced by the strong
there is growing optimism among VC investors in Asia, particularly in China and Hong Kong, upswing in the Nikkei 225 since the beginning of the year. This performance has likely contributed
investors continued to act cautiously in Q2’23, prioritizing investments in companies with more to the positive sentiment of investors and to the continued growth and maturation of the VC sector
maturity, while shying away from new and very early-stage startups. in Japan. Startups have continued to grow, raising larger funding rounds at much higher
valuations. In Q2’23, mobility company Go raised $103.1 million while energy company Kyoto
VC investors in China prioritize companies able to show results Fusioneering raised $79 million. Biotech companies also raised solid funding rounds, including
Heartseed ($20 million) and EditForce ($15.5 million). IPO exits in Japan increased in Q2’23
During Q2’23, confidence continued to grow in China, although VC investors remained highly compared to the same quarter last year, although the listed companies were all relatively small. In
cautious with respect to their investment decisions. The number and value of major growth- recent months, Japan has also seen several large technology companies announce plans to spin-
focused VC deals remained soft, particularly compared to the levels seen four-to-six quarters off business units in order to focus on their core business. If completed, these spin-offs will likely
ago when confidence in IPO status and access to exits was significantly higher. During the drive additional IPO activity in Japan.
quarter, VC investors in China also prioritized companies able to show real numbers and
growth — whether revenue or profit — and the ability to be sustainable long-term.
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VC investment in China continues to center around physical products and new materials Trends to watch for in Q3’23
VC investment in China continued to focus on hard technologies in Q2’23 — including products There is optimism in Asia heading into Q3’23, particularly in China and Hong Kong, although
like semiconductors, energy technologies, and new materials aligned to China’s priority there is no certainty that this optimism will quickly translate into increasing VC investment. There
innovation sectors. B2B solutions was also a major focus area — although software investments is also some hope for stronger IPO activity in Hong Kong and China during the second half of the
focused primarily on applications related to real products and services rather than simply on year, particularly given the planned spin-offs of a number of tech giant Alibaba’s business units.
software-as-a-service style offerings. The success of these spin-offs could spur other IPO activity, while potentially also driving a new
wave of interest in technology companies in China.
Fundraising in China surpasses 2022 total
In Q3’23, Japan is expected to change regulations related to the origination of venture funds in
In recent quarters, both China’s central government and a number of local governments have order to attract more foreign VC investment into the country.
worked to support technology development and startup growth, particularly in critical industries.
This has ranged both from direct investment in startups to partnerships with VCs in order to make
specific investments. This government participation is likely one reason why fundraising in China
has bucked the downward fundraising trend seen in other regions of the world — and in other
jurisdictions within Asia. It is hoped that this fundraising will help spur VC investments in the
country heading into the second half of the year.
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“
Venture financing in Asia
2016–Q2'23
Generative AI start-ups
VC dealmaking continues to
$80 5,000 moderate, but at a slower pace continue to attract incredible
than before. As a result, much investor attention globally.
4,500 like in every other region While the advances in
$70 worldwide, there could be generative AI have been
4,000 growing assurance on the part of impressive, strong
$60 investors and startups alike that investment in broader
the myriad of volatile factors have AI-based technologies, in
3,500
now been priced in. However,
particular by large unicorns,
$50 plenty of potential variables for
3,000 has long been part of the
investing remain intact, which
could lead to a plateau in Chinese start-up ecosystem.
$40 2,500 dealmaking tallies at best. We anticipate this trend will
continue to accelerate for the
”
$30
2,000 foreseeable future.
1,500
$20
1,000
$10
500
$21.1
$29.9
$18.0
$13.9
$20.1
$26.0
$28.2
$35.9
$46.3
$34.6
$41.6
$22.5
$20.2
$36.7
$38.6
$25.4
$25.3
$46.6
$48.0
$43.1
$64.8
$73.3
$45.2
$35.1
$30.8
$27.8
$22.9
$20.1
$17.8
$33.0
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Egidio Zarrella
Partner, Clients and Innovation
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth KPMG China
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Median deal size ($M) by stage in Asia Up, flat or down rounds in Asia
2016–2023* 2016–2023*
$45 100%
$40 90%
Up
$35 80%
$30 70%
60%
$25
50%
$20 Flat
$15.1 40%
$15
30%
$10
$7.0 20%
$5 $4.4
10% Down
$0.8
$0
2016 2017 2018 2019 2020 2021 2022 2023* 0%
2016 2017 2018 2019 2020 2021 2022 2023*
2023 figures for flat rounds are based on non-normative sample sizes.
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Median deal size ($M) by series in Asia

2016–2023*
$100
$90
$80
$70
$60
$50
$40
$30 $30.0
$21.9
$20
$14.5
$10
$7.3
$1.0
$0 $0.2
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
The Series D+ figure for 2023 YTD is based on non-normative sample sizes.
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Median pre-money valuation ($M) by series in Asia

2016–2023*
$700
$600
$500
$400
$388.7
$300
$200
$176.9
$100
$57.8
$25.1 $5.2
$0 $1.6
2016 2017 2018 2019 2020 2021 2022 2023*
A Angel B C D+ Seed
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Deal share by series in Asia Deal share by series in Asia

12,000 $180
$160
10,000
$140
8,000 $120
$100
6,000
$80
4,000 $60
$40
2,000
$20
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
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Asia venture financings by sector Asia venture financings by sector

90% Commercial 90%

Products & Services
Services
70% 70%
Software
60% 60%
Pharma & Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
Supplies
0% 0%
2023*
2016
2017
2018
2019
2020
2021
2022
2023*
2016
2017
2018
2019
2020
2021
2022
Energy
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Corporate participation in venture deals in Asia

2016–Q2'23
$60 1,800
1,600
$50
1,400
$40 1,200
1,000
$30
800
$20 600
400
$10
200
$28.0
$28.2
$12.0
$22.0
$10.1
$10.8
$17.8
$15.2
$21.6
$33.9
$20.4
$18.5
$11.5
$10.5
$14.6
$25.1
$16.5
$13.6
$19.2
$26.4
$22.4
$45.1
$48.0
$18.6
$16.2
$16.9
$11.1
$10.4
$9.6
$6.9
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
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“
Venture-backed exit activity in Asia
2016–Q2'23
We are seeing more
$200 250
companies starting to
undertake the work required
$180 to conduct an IPO — which
will hopefully bode well for
$160 200 the IPO market in Hong
Kong heading into the
$140 second half of the year,
although actual exits may
$120 150
take time to materialize. If
some of these early movers
$100
see good demand and
$80 100 results, then others will
follow — which should start
$60 to improve the VC market as
funds are recycled back into
”
$40 50 the secondary market.
$128.5
$183.9
$136.3
$125.0
$20
$65.3
$44.9
$45.0
$16.8
$29.8
$48.4
$14.3
$26.9
$27.4
$27.4
$24.4
$40.7
$50.7
$34.2
$34.9
$36.9
$60.1
$41.7
$35.0
$6.5
$4.5
$9.4
$7.7
$9.1
$6.9
$9.3
$0 0
2016 2017 2018 2019 2020 2021 2022 2023

Irene Chu
Partner & Head of New Economy and
Life Sciences, Hong Kong (SAR)
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data provided by PitchBook, July 26, 2023 KPMG China
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Venture-backed exit activity (#) by type in Asia Venture-backed exit activity ($B) by type in Asia
2016–2023* 2016–2023*
900 $600
800
$500
700
600 $400
500
$300
400
300 $200
200
$100
100
0 $0
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
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Venture fundraising in Asia

2016–2023*
Even with $48 billion in capital commitments thus far in the year, the domestic
$300 2,000 venture fundraising cycle in the region has slid in a systemic fashion for
several years now in terms of fund closing volume. What remains to be seen is
1,800 if this is a cycle more affected by a more diverse set of capital sources than
$250 traditional venture fundraising, or geopolitical tensions around international
1,600 sources of capital commitments, or some other factor, that affected the past
few years in particular.
1,400
$200
The fundraising cycle is raking in a somewhat
1,200
healthier level of capital commitments, but
$150 1,000
now it remains to be seen how
800
this affects startup financing
$100
600
down the line…
400
$50
$119.4
$128.8
$238.9
$179.6
$135.1
$129.8
200
$83.0
$48.0
$0 0
2016 2017 2018 2019 2020 2021 2022 2023*
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Venture fundraising (#) by size in Asia First-time vs. follow-on venture funds (#) in Asia
2016–2023* 2016–2023*
2,000 100%
1,800 90%
1,600 80%
1,400 70%
1,200 60%
1,000 50%
800 40%
600 30%
400 20%
200 10%
0 0%
2016 2017 2018 2019 2020 2021 2022 2023* 2016 2017 2018 2019 2020 2021 2022 2023*
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“
Venture financing in India
2016–Q2'23
While the last 2 quarters
have been muted, we
$16 800
expect activity to be
significantly higher by the
$14 700 end of this calendar year.
The path to profitability
$12 600
and positive operating
cash flow continues to be
critical success factor for
$10 500 the business owners to
”
attract funding.
$8 400
$6 300
$4 200
$2 100
$15.0
$11.2
$5.6
$2.8
$1.1
$0.9
$1.5
$0.9
$2.5
$2.3
$2.2
$1.7
$2.4
$2.8
$3.5
$3.4
$5.1
$7.3
$2.8
$2.1
$4.3
$3.7
$5.7
$5.5
$9.3
$8.1
$3.2
$3.0
$1.9
$2.8
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Nitish Poddar
Deal value ($B) Deal count Partner and National Leader,
Private Equity
KPMG in India
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“
Venture financing in China
2016–Q2'23
VC investment remained
muted in China this quarter,
$50 2,500 although the overall economy
in the country continued to
$45
make a slow rebound. Despite
the sluggish VC activity, we
$40 2,000
continued to see investor
$35
support for the energy and
green technology sectors,
$30 1,500 particularly any solutions
related to battery production.
$25 We also saw local
governments increasingly
$20 1,000 collaborating with VC firms to
invest in startups and provide
$15 various types of support to the
”
overall ecosystem.
$10 $14.8 500
$29.9
$18.1
$27.7
$13.9
$15.3
$10.0
$14.1
$14.7
$23.7
$24.9
$37.6
$26.2
$26.7
$12.2
$26.4
$20.9
$13.6
$16.9
$22.9
$36.7
$26.4
$35.7
$43.3
$22.2
$15.9
$19.4
$16.7
$15.4
$5
$9.3
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Zoe Shi
Deal value ($B) Deal count Partner
KPMG China
#Q2VC
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Venture financing in Australia

2016–Q2'23
$2,500 250
$2,000 200
$1,500 150
$1,000 100
$500 50
$2,013.0
$1,271.4
$1,399.9
$1,471.8
$2,161.4
$1,479.4
$1,268.3
$582.0
$215.2
$251.4
$182.2
$137.8
$250.2
$290.7
$282.5
$305.7
$820.2
$298.4
$427.9
$979.6
$469.3
$404.2
$475.7
$637.2
$434.3
$537.5
$762.6
$637.3
$522.8
$586.9
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
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“
Venture financing in Japan
2016–Q2'23
The government of Japan has
been very supportive of the
$2,500 450
development of a startup
ecosystem in Japan — which
400
is one of the reasons the
$2,000 ecosystem has evolved and
350 grown so quickly in recent
years. Currently, the
300 government is in the process of
$1,500 changing the law to make it
250 easier for foreign investors to
make investments in Japan
200 because it recognizes that this
$1,000 capital will be needed for
150 Japan’s startups to reach their
”
full potential.
100
$500
$1,192.9
$1,009.0
$1,041.8
$1,388.1
$1,150.6
$1,190.9
$1,168.9
$1,338.7
$1,410.1
$1,992.8
$1,999.7
$1,626.3
$1,496.4
$1,703.7
$1,560.9
$1,176.6
$661.1
$550.8
$240.9
$340.1
$350.6
$622.8
$673.8
$762.5
$773.0
$997.0
$953.9
$968.9
$692.1
$987.2
50
$0 0
2016 2017 2018 2019 2020 2021 2022 2023
Hiroshi Abe
Deal value ($M) Deal count Executive Board Member,
Partner
KPMG in Japan
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Top 10 financings in Q2'23 in Asia-Pacific
7
9 6 1. SHEIN — $2B, Singapore — Retail — Series G
10
2. BYJU’S — $700M, Bengaluru, India — Edtech — Late-stage VC
8
3 3. Lenskart — $600M, New Delhi, India — E-commerce — SeriesI
4
2 4. Changfei — $532M, Wuhu, China — Semiconductors — Series A
1 5. Mandy — $500M, Indonesia — E-commerce — Early-stage VC

5
6. KT Cloud — $452.5M, Seoul, South Korea — Cloudtech — Series B
7. ESWIN Computing — $423.1M, Beijing, China — Semiconductors — Series D
8. Libode — $374.7M, Yibin, China — Specialty chemicals — Series B
9. SJSemi — $340M, Jiangyin, China — Semiconductors — Series C1
10. JingXi ZhiXing — $290.7M, Zhangjiakou, China — Manufacturing — Series A
Source: Venture Pulse, Q2'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of June 30, 2023. Data
provided by PitchBook, July 26, 2023
#Q2VC
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Global | US | Americas | Europe | Asia
From seed to speed, we’re here throughout your journey
Contact us:
Netherlands
Denmark
Germany
Sweden Finland
Iceland
Canada Norway Estonia
UK Latvia
Ireland Lithuania Conor Moore
Channel Islands Poland Head of KPMG Private Enterprise in the
Czech Republic
Luxembourg Slovakia Americas,
France Ukraine Global Leader, Emerging Giants, KPMG
Switzerland China
US Romania South Korea Private Enterprise, KPMG International &
Portugal
Bermuda Turkey Partner, KPMG in the US
Japan
Spain Bangladesh
Italy Greece Israel Taiwan
Austria Malta Cyprus (Jurisdiction)
Mexico Tunisia
India Hong Kong (SAR), China
Venezuela
Cambodia Vietnam
Colombia
Singapore
Lindsay Hull
Peru Senior Director, Emerging Giants Global
Brazil Network, KPMG Private Enterprise,
KPMG International
South Africa
Chile Australia
Uruguay
New Zealand
#Q2VC
92
About KPMG Private Enterprise

You know KPMG. You might not know KPMG Private Enterprise. KPMG Private Enterprise advisers in KPMG firms around the world are
dedicated to working with you and your business, no matter where you are in your growth journey — whether you’re looking to reach new
heights, embrace technology, plan for an exit, or manage the transition of wealth or your business to the next generation. You gain access to
KPMG’s global resources through a single point of contact — a trusted adviser to your company. It is a local touch with a global reach.
KPMG Private Enterprise’s global network for emerging giants has extensive knowledge and experience working with the startup ecosystem.
Whether you are looking to establish your operations, raise capital, expand abroad, or simply comply with regulatory requirements — we can
help. From seed to speed, we’re here throughout your journey.
Apply for the KPMG Private Enterprise Global Tech Innovator 2023 Competition
At KPMG Private Enterprise we understand the impact that technology trailblazers like you are having on the world. Whether yours is a pure
technology company or you’re tech-enabled, tech-led or tech-driven, we want to hear from you.
We’re inviting you to compete with technology entrepreneurs across the globe. You’ll pitch your innovations and present your growth
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Wherever you are in your business lifecycle — from early-stage growth to getting ready to accelerate your expansion — our aim is to help
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Click here to apply for our 2023 competition.
#Q2VC
93
Acknowledgements
We acknowledge the contribution of the following individuals who assisted in the development of this publication:
• Jonathan Lavender, Global Head, KPMG Private Enterprise, KPMG International • Leonardo Peikoff, Head of Startup, ScaleUp Growth Management, KPMG in Austria
• Conor Moore, Head of KPMG Private Enterprise in the Americas, Global Leader, • Lindsay Hull, Senior Director, Emerging Giants Global Network, KPMG Private
Emerging Giants, KPMG Private Enterprise, KPMG International & Partner, Enterprise, KPMG International
KPMG in the US
• Melany Eli, Managing Director, Marketing and Communications, KPMG Private
• Amanda Price, Head of High Growth Ventures, KPMG in Australia Enterprise, KPMG International
• Amy Burnett, Head of KPMG Private Enterprise Access, KPMG in the UK • Nicole Lowe, Head of Emerging Giants, KPMG in the UK
• Anna Scally, Partner, Head of Technology & Media, KPMG in Ireland • Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India
• Daniel Malandrin, Partner, Venture Capital & Corporate Ventures, KPMG in Brazil • Peter Kehrli, Partner, KPMG in the US
• Dina Pasca-Raz, Head of Technology, Head of International Tax, KPMG in Israel • Robert Baxter, Head of Corporate Finance, KPMG in the UK
• Diogo Garcia Correia, Venture Capital & Emerging Giants Business Development, • Ryan Forster, Partner, KPMG in Canada
KPMG in Brazil
• Samuel Lush, Director, Private Equity Group, KPMG in the US
• Hiroshi Abe, Executive Board Member, Partner, KPMG in Japan
• Sunil Mistry, Partner, KPMG Private Enterprise, Technology, Media &
• Irene Chu, Partner & Head of New Economy and Life Sciences, Hong Kong (SAR) Telecommunications (TMT), KPMG in Canada
Region, KPMG China
• Tim Dümichen, Partner, KPMG in Germany
• Jules Walker, Senior Director, Business Development, KPMG in the US
• Warren Middleton, Lead Partner for Emerging Giants, Center of Excellence in
• Jussi Paski, Head of Startup & Venture Services, KPMG in Finland the UK, KPMG in the UK
• Lauren Taylor, Fintech Manager, KPMG in the UK • Zoe Shi, Partner, KPMG China
#Q2VC
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Methodology
KPMG uses PitchBook as the provider of venture data for the Venture Pulse report • Angel/seed: PitchBook defines financings as angel rounds if there are no PE or VC firms involved in the company to
date and we cannot determine if any PE or VC firms are participating. In addition, if there is a press release that
Please note that the MESA and Africa regions are NOT broken out in this report. Accordingly, if you add up the Americas, Asia- states the round is an angel round, it is classified as such. Finally, if a news story or press release only mentions
Pacific and Europe regional totals, they will not match the global total, as the global total considers those other regions. Those individuals making investments in a financing, it is also classified as angel. As for seed, when the investors and/or
specific regions were not highlighted in this report due to a paucity of datasets and verifiable trends. press release state that a round is a seed financing, or it is for less than $500,000 and is the first round as reported
by a government filing, it is classified as such. If angels are the only investors, then a round is only marked as seed if
In addition, particularly within the European region, the Venture Pulse does not contain any transactions that are tracked as it is explicitly stated.
private equity growth by PitchBook. As such rounds are often conflated with late-stage venture capital in media coverage, there
can be confusion regarding specific rounds of financing. The key difference is that PitchBook defines a PE growth round as a • Early-stage: Rounds are generally classified as Series A or B (which we typically aggregate together as early-stage)
financial investment occurring when a PE investor acquires a minority stake in a privately held corporation. Thus, if the investor is either by the series of stock issued in the financing or, if that information is unavailable, by a series of factors
classified as PE by PitchBook, and it is the sole participant in the recipient company’s financing, then such a round will usually be including: the age of the company, prior financing history, company status, participating investors, and more.
classified as PE growth, and not included in the Venture Pulse datasets. However, as of the Q4 2022 edition, a new stage for • Late-stage: Rounds are generally classified as Series C or D or later (which we typically aggregate together as
venture that was invented by PitchBook to account for growth at late-stage VC will be included, defined as venture growth. That late-stage) either by the series of stock issued in the financing or, if that information is unavailable, by a series of
same edition saw some minor updates to the wording of the methodology on this page. factors including: the age of the company, prior financing history, company status, participating investors, and more.
Also, if a company is tagged with any PitchBook vertical, excepting manufacturing and infrastructure, it is kept. Otherwise, the • Growth: Financings tagged as Series E or later or deals involving companies that are at least seven years old and
following industries are excluded from growth equity financing calculations: buildings and property, thrifts and mortgage finance, have raised at least six VC rounds will be included in this category, as of the Q4 2022 edition of Venture Pulse
real estate investment trusts, and oil & gas equipment, utilities, exploration, production and refining. Lastly, the company in released in January 2023.
question must not have had an M&A event, buyout, or IPO completed prior to the round in question. • Corporate: Corporate rounds of funding for currently venture-backed startups that meet the criteria for other
Fundraising PitchBook venture financings are included in the Venture Pulse as of March 2018.
PitchBook defines VC funds as pools of capital raised for the purpose of investing in the equity of startup companies. In • Corporate venture capital: Financings classified as corporate venture capital include rounds that saw both firms
addition to funds raised by traditional VC firms, PitchBook also includes funds raised by any institution with the primary investing via established CVC arms or corporations making equity investments off balance sheets or whatever other
intent stated above. Funds identifying as growthstage vehicles are classified as PE funds and are not included in this non-CVC method is employed.
report. A fund’s location is determined by the country in which the fund’s investment team is based; if that information is Exits
not explicitly known, the HQ country of the fund’s general partner is used. Only funds based in the United States that have
held their final close are included in the fundraising numbers. The entirety of a fund’s committed capital is attributed to the PitchBook includes the first majority liquidity event for holders of equity securities of venture-backed companies. This
year of the final close of the fund. Interim close amounts are not recorded in the year of the interim close. includes events where there is a public market for the shares (IPO) or the acquisition of majority of the equity by another
entity (corporate or financial acquisition). This does not include secondary sales, further sales after the initial liquidity
Deals event, or bankruptcies. M&A value is based on reported or disclosed figures, with no estimation used to assess the value
of transactions for which the actual deal size is unknown. IPO value is based on the premoney valuation of the company
PitchBook includes equity investments into startup companies from an outside source. Investment does not necessarily at its IPO price. One slight methodology update is the categorical change from “IPO” to “public listings” to accommodate
have to be taken from an institutional investor. This can include investment from individual angel investors, angel groups, the different ways we track VC-backed companies’ transitions to the public markets. To give readers a fuller picture of
seed funds, VC firms, corporate venture firms, corporate investors, and institutions, among others. Investments received the companies that go public, this updated grouping includes IPOs, direct listings, and reverse mergers via SPACs.
as part of an accelerator program are not included; however, if the accelerator continues to invest in follow-on rounds,
those further financings are included. All financings are of companies headquartered in the US, with any reference to In the edition of the KPMG Venture Pulse covering Q1 2019 and all ensuing, PitchBook’s methodology regarding aggregate
“ecosystem” defined as the combined statistical area (CSA). PitchBook includes deals that include partial debt and equity. exit values changed. Instead of utilizing the size of an IPO as the exit value, instead the prevaluation of an IPO, based upon
ordinary shares outstanding, was utilized. This has led to a significant change in aggregate exit values in all subsequent
editions yet is more reflective of how the industry views the true size of an exit via public markets. In the edition of the
KPMG Venture Pulse covering Q1 2021 and all ensuing, the IPO exit type was updated to include all types of public listings,
including special purpose acquisition companies (SPACs) and other reverse mergers.
#Q2VC
95
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information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
without appropriate professional advice after a thorough examination of the particular situation.
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Venture Pulse q2 2023

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Global analysis of venture funding

VC investors prioritizing financial metrics Trends to watch for in Q3’23

Alternative energy, energy storage, and cleantech remain attractive to VC investors

3 Sequoia Is Splitting Into Three VC Firms (forbes.com)

Global median deal size ($M) by series

Global median pre-money valuation ($M) by series

Global deal share by series Global deal share by series

100% Transportation 100%

90% Commercial 90%

60% Pharma & Biotech 60%

$140 4,500 $80 20,000

Global unicorn rounds Global venture-backed exit activity

$80 300 $500 1,400

$40 150 $250

Global venture fundraising

1,500 2023 continues to see headwinds

$1B+ $500M-$1B $250M-$500M $100M-$250M $50M-$100M Under $50M First-time Follow-on

Top 10 global financings in Q2'23

1. Stripe — $6.9B, San Francisco, US — Fintech — SeriesI

2. SHEIN — $2B, Singapore — Retail — Series G

9 3. Inflection — $1.3B, Palo Alto, US — AI & ML — Early-stage VC

3 4. BYJU’S — $700M, Bengaluru, India — Edtech — Late-stage VC

8 7. Cacashop.com — $500M, Malta — E-commerce — Series B

8. Mandy — $500M, Indonesia — E-commerce — Early-stage VC

9. Getir — $475M, London, UK — E-commerce — Late-stage VC

Fundraising activity remains suppressed

Fundraising by VC funds in the US continued to be very subdued in Q2’23, with little

Trends to watch for in Q3’23

Venture financing in the US

For the US in particular, as monetary policy could be now

Deal share by series in the US Deal share by series in the US

Venture financing by sector in the US Venture financing by sector in the US

100% Transportation 100%

90% Commercial 90%

70% Software 70%

60% Pharma & Biotech 60%

50% Other 50%

40% Media 40%

30% IT Hardware 30%

Venture-backed exit activity in the US

Exit value ($B) Exit count

Acquisition Buyout Public listing Acquisition Buyout Public listing

$180 1,600 The sheer decline in fundraising activity speaks to multiple

Capital raised ($B) Fund count

First-time Follow-on First-time Follow-on

Venture financing in the Americas

5,000 … dealmaking may have

Angel & seed Early VC Later VC Venture growth

Median deal size ($M) by series in the Americas

Median pre-money valuation ($M) by series in the Americas

100% Transportation 100%

90% Commercial 90%

70% Software 70%

60% Pharma & Biotech 60%

50% Other 50%

40% Media 40%

30% IT Hardware 30%

20% HC Services & 20%

Deal value ($M) Deal count Ryan Forster