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Global VC investment during Q1â€�22 reached $144.8 billion, higher than all, but the four consecutive record-breaking quarters seen during 2021 â€� making for a robust result, despite the decline, according to the ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø’s Venture Pulse report, covering Q1â€�2022.

The quarterly report, published by ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø Private Enterprise, analyses key VC deals and trends globally in key jurisdictions around the world. While total investment remained strong, the number of VC deals dropped considerably â€� from 10,775 deals in Q4â€�21 to 9,349 in Q1â€�22 â€� as geopolitical and economic factors combined to create a storm of uncertainty in the market.

The Russia-Ukraine war, rising inflation and interest rates, turbulence in the global capital markets, ongoing supply chain challenges, and surging cases of COVID-19 in a number of jurisdictions likely contributed to a slowdown in deal-making activity as VC investors enhanced their caution and focused more on due diligence.

VC investment declined in both the Americas and Asia during Q1�22. VC investment in the Americas fell from $103.3 billion in Q4�21 to $77.6 billion in Q1�22, while VC investment in Asia dropped from $55.2 billion to $32.6 billion. Only Europe bucked the downward trend, experiencing a modest increase from $31.5 billion in Q4�21 to $31.7 billion in Q1�22.

After a record year for exits, Q1�22 saw exit value drop more than 60% quarter-over-quarter - with just $122.3 billion in exit value across 684 deals, compared to $344.2 billion in exit value across 941 deals in Q4�21.

• Global VC investment dropped from a high of $191.9 billion across 10,775 deals in Q4â€�21 to $144.8 billion across 9,349 deals in Q1â€�22.
• VC investment in the Americas fell from $103.3 billion across 4,628 deals in Q4â€�21 to $77.6 billion across 4,138 deals in Q1â€�22. The US accounted for $70.7 billion of Q1â€�22 investment the Americas ($95.4 billion of investment in Q4â€�21).
• VC investment in Asia dropped from $55.2 billion across 3,139 deals in Q4â€�21 to $32.6 billion across 2,712 deals in Q1â€�22.
• Europe saw a slight increase in VC investment during Q1â€�22, attracting $31.7 billion across 2,219 deals, compared to $31.5 billion across 2,705 deals in Q4â€�21.
• Global first-time VC financing was soft in Q1â€�22, accounting for just $12.6 billion.
• CVC-affiliated investment rose in Europe, accounting for $14.4 billion in Q1â€�22 compared to $12.5 billion in Q4â€�22. CVC-participant investment in Americas dropped from $43.7 billion to $30.8 billion, while Asia-based CVC also declined â€� from $33.3 billion to $18.2 billion quarter-over-quarter.
• Exit value dropped considerably quarter-over-quarter, with $122.3 billion in exit value in Q1â€�22, compared to $344.2 billion in exit value in Q4â€�21.ÌýÌý

The number of $1 billion+ megadeals fell to 2 during Q1�22 (Altos Labs, Checkout.com) � with both deals occurring during the first three weeks of the quarter, before the crisis in Ukraine began. The drop in $1 billion+ deals helped showcase the breadth of countries now attracting large VC deals. Companies from seven countries attracted the top ten largest deals this quarter, including the US.

The AmericasÌýsaw $77.6 billion in investment during Q1â€�22. The US accounted for $70.7 billion of this total â€� and for the top three largest deals in the Americas this quarter, including a $3 billion raise by cellular regeneration-focused biotech Altos Labs, a $935 million raise by logistics company Flexport, and a $750 million raise by corporate management company Ramp.

EuropeÌýattracted $31.7 billion in VC investment during Q1â€�22, a minor increase compared to the $31.5 billion in deal value seen in Q4â€�21. Six different countries attracted the top 6 funding rounds in Europe this quarter. UK-based payments company Checkout.com’s $1 billion raise was the largest in Q1â€�22, followed by an $768 million raise by Turkey-based delivery company Getir, a $710 million raise by Estonia-based checkout platform Bolt, a $566 million raise by Finland-based business productivity company Relex, and a $557 million raise by France-based healthtech Doctolib.

Meanwhile, VC investment inÌýAsiaÌýdropped to a six-quarter low of $32.6 billion in Q1â€�22, driven by global geopolitical uncertainty, macroeconomic factors, and ongoing regulatory concerns in China. The region saw no $1 billion+ deals during the quarter. The largest deals included $800 million raises by both India-based edtech Byju and China-based proptech JD Property, a $784 million raise by China-based Changan New Energy Vehicles Technology, and a $700 million raise by India-based food delivery company Swiggy. Outside of India and China, Singapore-based Princton Digital Group ($505 million) and Korea-based Megazone Cloud ($442.1 million) also raised big rounds this quarter.

Despite the significant uncertainty plaguing the VC market globally, VC investment is expected to remain relatively stable in Q2�22 thanks to a significant amount of dry powder. VC investors will likely continue to be cautious, focusing on late stage companies and proven bets. This could cause concern for startups looking for first-time financing or at early stages of their growth trajectory.

Daniel Caines
Senior Manager, Global External Communications
E:ÌýDaniel.Caines@kpmg.co.uk

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