In the second quarter of 2023, VC spending on early-stage tech startups in the U.S. significantly dropped, with American investors backing 3,011 startup deals, a third lower than the same period in 2022. The total amount spent was just under $40 billion, almost half of the previous year's expenditure. The largest decrease in funding occurred in angel or seed deals for startups in the concept phase.
Key takeaways:
- Venture capital firms are reportedly reducing their megafunds after years of growth, reflecting a scaling back of goals despite a rebound in tech stocks due to the AI boom.
- Many opportunities in the AI sector are centered around small startups, with fewer opportunities involving later-stage companies.
- There has been an increase in tech startups looking for buyers among larger companies, with a wave of consolidation predicted in the tech and software sectors.
- VC spending on early-stage tech startups in the U.S. has significantly dropped, with the total amount spent in Q2 2023 almost half of what was spent the previous year.