A slow-down in activity at the lower end of the investment market is terrific news for established companies (fewer challengers) but is not healthy for the overall market.
But perhaps all is not lost, with a plethora of emerging technologies and techniques entering the market that will inspire a new generation of companies that can then win the hearts of investors.
Amid record amounts of capital raised by VCs worldwide, and a sharp rise in the number of private “unicorns” valued at $1 billion-plus, there has been a quiet, barely noticed implosion in early-stage VC activity worldwide.
Since 2014, the number of VC rounds in technology companies worldwide has nearly halved, from 19,000 to 10,000, according to PitchBook.
During that time, the drop in VC funding amount has been nowhere near as dramatic, highlighting that VCs are concentrating investment into fewer later-stage companies.