Linas's Newsletter

Linas's Newsletter

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Linas's Newsletter
Linas's Newsletter
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 👀

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

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Linas Beliūnas
Aug 09, 2022
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Linas's Newsletter
Linas's Newsletter
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 👀
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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):

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