The Big VC Pullback everyone was expecting is here and it's bad for startups 😔; Decentralised exchanges are a major source of fraud 🚨; Perfect timing: Mastercard launches crypto anti-fraud tool ⏰

FinTech is Eating the World, 7 October

Hey Everyone,

TGIF! Today’s issue isn’t something I would like to end a good week with but you can’t blame the messenger if the message is unpleasant. But we must talk about this, so today we’re looking at the big VC pullback that’s finally here (5 illustrative graphs & why it’s bad news for startups), decentralized exchanges that are a major source of fraud (DeFi has a security issue & it’s huge), and Mastercard and its perfect timing launching the crypto anti-fraud tool (why I’m bullish & you’d be too). Bonus is a read on why the future of payments is open and why the future of investing is social. So let’s jump straight into the incredible stuff:

The Big VC Pullback everyone was expecting is here and it's bad for startups 😔

This is it? 😬 There's no more denying what's going on in the VC industry. The pullback has now begun and it's going to be a terrifying winter for all startups.

More on this 👉 Venture and growth investors in private companies scaled back their investment pace substantially as the drop in the public markets stretched into the third quarter.

VC funding for the third quarter of 2022 totaled $81 billion. This is down by $90B (53%) year over year and by $40B (33%) quarter over quarter, according to Crunchbase. This is a massive drop in funding compared to prior quarters. In fact, this past quarter is the lowest quarterly funding amount since the first quarter of 2020, with $70.6B in VC funding. 

Let’s look at this closer and see how the funding differs across stages as well as try to unlock the potential implications for the future.