Venture Capital funding has fallen off a cliff 😳; Goldman Sachs ditches their branded credit card 💳; Worrying layoffs at Polygon ✂️
FinTech is Eating the World, 22 February
Hey Everyone,
Good morning! The latest issue is coming with a slight delay but it’s 100% worth the wait as it’s really, really hot🔥 We’re going to look at Venture Capital funding that has fallen off a cliff (what can & should you do + 2 bonus reads on how significantly improve your chances of getting funded), Goldman Sachs that ditched their branded credit card (RIP Marcus), and worrying layoffs at Polygon (this came unexpected and is really concerning). Let’s jump straight into the awesome stuff 🌶
Venture Capital funding has fallen off a cliff 😳
New data 📊 Venture Capital funding has fallen off a cliff and hit a 9-year low in the fourth quarter of 2022 😳 That’s according to the newest data from global analytics firm Preqin. Let’s take a look.
More on this 👉 VC firms raised $20.6 billion in new funds in Q4. That's a 65% drop from the same quarter last year and the lowest Q4 amount since 2013. Wow.
The crazy part?
The amount was also less than half the level raised in the preceding 3 months. This marks the first time fundraising volumes decreased from Q3 to Q4 since 2009 🤯
Wait, but why? 🤔 The trends driving the decline in VC funds are the same ones that impacted tech startups last year — fewer companies going public through IPOs, stocks, and valuations are falling rapidly, and interest rates and inflation rising.
In response to the lower demand, VC firms are thus raising funds more slowly, so they have longer to raise the next one, reducing the fees they charge their investors and cutting back on their goals for fundraising.
Limited partners are making changes, too. They are becoming more selective and are less likely to back funds run by a first-time manager.
The impact 👉 The impact of this massive drop can already be seen, especially when looking at FinTech investment in EMEA. Here’s more on this and what you should do to navigate the storm (+ 2 bonus reads on how significantly improve your chances of getting funded):