According to data from analytics company CB Insights, VC-backed firms have raised far fewer fundraising rounds during the last three months than they did in the more volatile days of late last year and early this year.
The second quarter saw a 23 percent decline in global transaction activity, which is a sharp contrast to the first quarter’s 1.4 percent decline.
Unrest in Crypto and Public Markets Affects Private Companies
The environment for investing in the technology sector has drastically shifted over the last several months of this year. A new remote world that requires digital communication rather than face-to-face communication has caused startup investment activity to soar after a brief period of uncertainty at the beginning of the coronavirus epidemic.
In early 2022, there were so many businesses obtaining financing of $1 billion or more as a result of this frenzy that new unicorn companies were being created on average twice daily. In 2021, this frenzy caused an unprecedented rush of capital into startups.
The number of agreements and total investment raised, however, have decreased to their lowest levels since the end of 2020 over the last three months.