Most active investors continue investing despite the crash 💸; Open Banking is coming to Canada, & it will transform country forever 🇨🇦; "Risk-off" sentiment in crypto markets & a look at H2 2022 👀
Good Morning FinTech, 9 August
Good day Everyone,
Happy Tuesday! Today’s issue is super interesting as we’re going to look at the most active VCs that continue investing despite the market crash (& why it makes sense + powerful template to make VCs eager to invest in your startup), Open Banking coming to Canada (& how it will transform the country for the better), and risk-off sentiment in the crypto markets (H1 recap & brief look at H2). So let’s jump straight into the intriguing stuff:
Most active investors continue investing despite the crash 💸
Spotting trends in a downtrend 🔍 While some countries might debate whether we’re in a recession or not, one thing is clear for sure - we are currently in an investment downturn. Global VC funding has declined in the second quarter this year by around 25% (the deal count is also trending downward), according to various data sources.
But there’s one positive trend nobody is talking about - most active venture investors haven’t slowed down by much and they continue investing despite the market crash.
More on this 👉 40 most active VCs that Crunchbase has tracked reveal some interesting data. Here’s what you need to know:
In the first half of 2022, the 40 tracked firms invested actively in new portfolio companies on par with 2021.
For the perspective, in 2021, this cohort had upped its pace by more than 50% YoY compared to 2020.
The proportion of investments in new portfolio companies compared to follow on in the first half of 2022 was higher at 55%, compared to 50% in the first half of 2021.
Yet, follow-on fundings (investing in existing portfolio companies) for this group of investors are down compared to 2021.
Overall, VCs are investing more actively at Seed and Series A.
Round sizes at Series A have not come down but for Series C stage investments and later, averages were down with fewer fundings above the $100M mark.
At first sight, it might seem counterintuitive but it all makes sense once you start thinking about it. Here’s the takeaway (+ a powerful template to make VCs eager to invest in your startup):