Crunchbase Inc. reveals continued decline in global venture capital funding in April due to macroeconomic issues, high interest rates, and the Ukraine war.
All funding stages were affected, resulting in a 59% YoY drop in total investments, with seed, early-stage, and late-stage funding dropping by 50%, 48%, and 67%, respectively. New unicorns were also affected, with only a few emerging in the month compared to 40 in April 2022.
According to a recent report, VC funding in April experienced a significant decline compared to March, although the previous month’s figure was skewed due to the large investment of $6.5 billion into payment technology company Stripe Inc. The total VC funding for April amounted to $21 billion, marking a 56% decrease from the same period in 2022. This figure is also the second-lowest amount since July 2022, when global venture capital investments dropped below $30 billion.
Despite the overall decline in venture capital funding, two sectors showed resilience in April: healthcare and artificial intelligence. Healthcare attracted over $5 billion in venture capital investment, while AI received $2.5 billion. Several notable AI rounds included OpenAI LP raising $300 million, CoreWeave Inc. securing $221 million, and Pinecone Systems Inc. and AlphaSense Inc. both raising $100 million, and Replit Inc. raising $97 million. On the other hand, funding for fintech experienced a significant decline, dropping from $7.7 billion in April 2022 to $2.7 billion in April 2023.
After reporting a 53% drop in funding in the first quarter of 2023, Crunchbase has revealed a further 59% decline in global venture capital investments in April, affecting all funding stages. This was attributed to macroeconomic issues, high-interest rates, and the conflict in Ukraine. However, healthcare and Artificial Intelligence sectors saw promising investment rounds, while fintech funding dropped significantly. Notably, the downturn in funding was also seen in the cybersecurity sector, with investment at decade lows across all stages.