Venture Pulse q4 2022 PDF

Venture Pulse
Q42022
Global analysis of venture funding
January 18, 2023
Welcome to the Q4’22 edition of Venture Pulse — KPMG raised $450 million, China-based SPIC Hydrogen Energy
Private Enterprise’s quarterly report highlighting the key raised $631 million, China-based Voyah Car Technology raise
trends, opportunities, and challenges facing the VC market $631 million, Estonia-based Sunly raised $196 million, and You know KPMG. You might not know
globally and in key jurisdictions around the world. Belgium-based Tree Energy Solutions raised $129 million. KPMG Private Enterprise.
Fintech also remained highly attractive to VC investors
It was a challenging 2022 for VC investment globally, despite KPMG Private Enterprise advisers in
globally, in addition to B2B solutions and healthcare and
strong fundraising activity and a major amount of dry power KPMG firms around the world are
biotech.
available in the market. The ongoing conflict in the Ukraine, dedicated to working with you and your
rapidly rising interest rates, high levels of inflation, and Heading into Q1’23, VC investment globally is expected to business, no matter where you are in
concerns about a global recession all combined to drive VC remain subdued given the uncertainty in the market. Down your growth journey — whether you’re
investment down, particularly in the second half of the year. rounds will likely become more prevalent as companies are looking to reach new heights, embrace
Global VC investment in Q4’22 was down significantly quarter- forced to raise capital despite the less-than-optimal market technology, plan for an exit, or manage
the transition of wealth or your business
over-quarter — and less than half the record level set during conditions. M&A activity could also pick up as companies
to the next generation.
Q4’21. begin to run out of cash and fail to attract new investment.
VC investment in all regions fell quarter-over-quarter. The In this quarter’s edition of Venture Pulse, we examine these
Americas continued to account for the largest share of VC and a number of other global and regional trends, including: Jonathan Lavender
Global Head
investment globally during Q4’22, with the US accounting for KPMG Private Enterprise
• The continued focus on cost-cutting and cash preservation
the vast majority of this investment. Asia came a distant KPMG International
• The relative resilience of early-stage funding activity
second, despite attracting six $500 million + megadeals this
• The funding challenges faced by unicorn companies
quarter. Europe experienced the sharpest drop in VC Conor Moore
• The continued strength of fundraising globally
investment compared to Q3’22, dropping almost 40 percent in Head of KPMG Private Enterprise in the
Americas,
Q4’22. Global Leader, Emerging Giants, KPMG
We hope you find this edition of Venture Pulse insightful. If Private Enterprise, KPMG International &
The alternative energy and electric vehicles spaces attracted Partner, KPMG in the US
you would like to discuss any of the results in more detail,
significant interest from investors in all regions during Q4’22. Lindsay Hull
please contact a KPMG adviser in your area.
In addition to large raises by GAC Aion ($2.56 billion), US- Senior Director, Emerging Giants Global
Network, KPMG Private Enterprise,
based TerraPower raised $830 million and Form Energy KPMG International
Unless otherwise noted, all currencies reflected throughout this document are in US dollar.
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. #Q4VC
2
Global US
• VC investment slows to $75.6 billion • VC deal value plummets to $36 billion across
across 7641 deals 2935 deals
• Corporate VC participation dropped • Investment in B2B, software and energy hold
for 4th consecutive quarter steady
• Venture backed exit activity remains • Corporate VC drops to lowest levels since Q4’19
subdued • Exits slide to lowest quarterly tally in years
• Global fundraising slows year • $1 billion+ Mega-funds experience record year
over year
• Chinese companies attract 6 of top
10 deals globally
Americas Asia
• VC-backed companies fall to • Venture Capital investment drops
$39.2 billion across 3322 deals slightly $22.6 billion across 2157
• Down-rounds decline as deals
investors wait on sidelines • Later stage valuations cool on a
• Canadian VC remains resilient, YoY basis
propelled by mega deals • First-time funds grow their
• VC deal value in Brazil drops for proportion of volume
4th consecutive quarter • Australia continues to attract
• Largest 10 deals in Americas all significant deal value —
come from the United States outperforms Q3
Europe
• Chinese companies raise 7 of
largest 10 deals in Asia
• Investment drops again — to $12.9 billion invested on 1936 deals
• VC invested in Series A remains remarkable strong
• Corporate VC participation cools for 3rd consecutive quarter
• Exits slide to record lows
• VC Fundraising remains remarkably robust
• Top 10 deals spread among 7 different countries
#Q4VC
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved.
3
Global US | Americas | Europe | Asia
#Q4VC
4
VC investment globally dropped for the fourth straight quarter in Q4’22. While the total of VC investment looked particularly weak compared to the record
quarterly high set during the same quarter last year, it remained comparable to investment levels seen prior to the onset of the COVID-19 pandemic.
Challenging global macroeconomic conditions drive trends across regions Cost-cutting becomes a key priority as companies preserve cash and VC investors
focus on profitability
The war in the Ukraine, high rates of inflation, rapidly rising interest rates, soaring energy prices,
the looming threat of a global recession, and other macroeconomic factors combined to create a In Q4’22, numerous global technology companies, announced significant cost-cutting measures —
storm of challenges both within the global VC market and more broadly during Q4’22. These primarily headcount reductions and the reduction of real estate footprints. In the VC market, such
concerns drove a significant amount of alignment in major investment trends across regions, efforts also became the norm this quarter as startups worked to preserve cash, delay new funding
overshadowing many more localized concerns during the quarter. rounds, and respond to pressure from their investors to become more efficient. The prioritization on
cost-cutting extended across companies operating in a wide variety of sectors.
VC investment declines in key regions
B2B and business productivity solutions — already a strong area of VC investment — will likely
VC investment in both the Americas and Asia dropped for the fourth straight quarter in Q4’22, continue to gain steam over the next few quarters as both corporates and more mature startups
while Europe experienced a third quarter of declining investment. Late stage VC investment saw look for ways to streamline their operations, bring more efficiencies into their business, and get
the sharpest drop amidst falling valuations and concerns about the profitability and sustainability more value from every dollar.
of business models given worsening global economic conditions. China accounted for the
majority of $500 million+ megadeals this quarter, including a $2.56 billion raise by GAC Aion, a Energy sector very robust among global VC investors
$1 billion raise by SHEIN, a $631 million deal by SPIC Hydrogen Energy, a $631 million deal by
Voyah Car Technology, a $562 million deal by ESWIN Material and $537 million going to Fei 2022 saw global VC investor interest in everything energy-related grow very rapidly, driven in part
Hong Technology. by a number of governments moving to prioritize energy independence and numerous companies
considering energy alternatives and ways to become more efficient amidst soaring energy costs. In
Fundraising activity remains strong in 2022 Q4’22, energy was an incredibly hot sector for VC investment, with numerous subsectors attracting
large ticket sizes, including alternative energy vehicles, battery technologies, and alternative power
2022 was the third-highest year for global fundraising activity, driven by robust fundraising in the generation and distribution technologies. Broader cleantech and ESG-related solutions also saw
US and very strong fundraising activity in Europe. Fundraising in Asia was the polar opposite, strong interest from VC investors.
falling for the fourth-straight year — to the lowest level seen since 2014.
The number of VC funds dropped considerably during 2023, while average fund size grew
considerably. The shift reflects LPs focusing their investments on funds managed by proven
fund managers with extended track records of success rather than on first time funds.
#Q4VC
5
China attracted several of the largest funding rounds in the Energy sector during Q4’22, with EV Unicorn companies facing significant pressure as IPO window remains shut and
and EV battery companies attracting the largest deals, including: GAC Aion ($2.56 billion), SPIC valuations tumble
Hydrogen Energy ($631 million), Voyah Car Technology ($631 million), BYVIN Auto
Given the challenging market conditions, IPO activity among VC-backed companies globally stalled
($444 million), Hithium ($280 million). Other jurisdictions saw a broader range of energy
significantly over the course of 2022, including in the Americas, Europe, and much of Asia. China
companies attracting VC investment. In the US, innovative nuclear power company TerraPower
was a major exception, likely due to its capital market being less interconnected with the global
raised $830 million, while Seattle-based battery manufacturer Group 14 landed $614 million and
economy.
renewable energy battery storage company Form Energy raised $450 million. In Europe,
Sweden-based electric freight vehicle company Einride raised $500 million, followed Volta The lack of IPO opportunities has caused many unicorn companies to struggle, particularly those
Trucks ($295 million), France-based battery company Verkor ($245.9 million), Estonia-based that had been planning for exits. During Q4’22, numerous unicorns laid off significant percentages of
renewable energy infrastructure company Sunly ($196 million), and Belgium-based hydrogen employees, reduced their real estate footprint, and undertook other cost-reduction initiatives in order
energy company Tree Energy Solutions ($122 million). to free up and conserve cash, improve profitability, and delay the need to raise additional funding at
potentially much lower valuation levels.
In wake of FTX meltdown, crypto-focused VC investments come under intense
scrutiny Trends to watch for in Q1’23
The bankruptcy of Americas-based FTX in the later half of Q4’22 put a significant amount of Looking ahead to Q1’23, the VC market globally is expected to remain challenged, with consumer-
scrutiny on the diligence processes of VC firms and investors with respect to their investments in focused businesses expected to see the most strain. The IPO window, particularly in the US will
crypto-focused companies — and enhanced calls for regulations to govern sector activities in likely remain closed well into 2023, with little to suggest it will reopen fully in the first half of the
many jurisdictions. The sudden collapse of a highly valued company backed by smart money will year. As companies run out of cash, there will likely be an increasing number of down rounds and
likely have a ripple effect on the VC market — with many VC firms expected to re-evaluate their an in increase in M&A activity. Globally, there could also be a number of unicorn deaths over the
due diligence and investment decision-making, not only for investments in crypto companies, but next few quarters.
on a broader basis as well.
Given the ongoing energy crisis in Europe and concerns about sustainability and climate change,
Existing crypto-focused startups are also expected to feel significant pressure to prove their the broader energy sector will likely remain very hot, with investors continuing to make big bets
business case and value as VC investors become more gun shy about writing checks. The next on alternative energy technologies, electric and hydrogen powered vehicles, and battery storage.
few quarters could see a shakeout in the space as less proven crypto companies fail to survive.
On a global basis, cybersecurity, B2B solutions will likely remain very attractive areas of VC
investment in Q1’23, in addition to health and biotech, regtech, and solutions with military
applications. Investments in artificial intelligence are also expected to grow long-term, particularly
in game changing areas like generative AI and conversational AI.
#Q4VC
6
“
Global venture financing
2015–Q4'22
2022 ended with the VC market
$250 16,000
2022 concluded with a continuation of the
globally still weathering quite the
inexorable decline in venture dealmaking
worldwide. As volatility in public equities storm of challenges — from rising
14,000 surged and monetary regimes tightened, interest rates, depressed
concerns around economic growth prospects valuations, and the lack of IPO exits
$200 and the level of valuations began to exert a
12,000
to the ramifications of the ongoing
toll throughout all of last year. Now, as in any
downturn, it remains to be seen which arenas geopolitical issues. But there were
remain active as venture fund managers some bright spots. Soaring energy
10,000
$150 grapple with complex, murky scenarios. Key costs sparked a significant uptick in
trends to look for include:
VC investment in new energy
8,000 • How much geopolitical turmoil will continue alternatives, electric vehicles, and
to impact key production and supply
cleantech. Regtech and business
$100 chains, as well as close off markets
6,000 productivity also saw strong VC
• Navigation of the complicated valuation
investment in Q4’22, along with
environment given high dry powder levels
4,000 yet materially slowing business conditions cybersecurity and defence.
$50 Heading into 2023, the acceleration
• Still-intense competition for talent even
2,000 amid an increasingly choppy labor market of investment in energy alternatives
$100.2
$113.6
$155.8
$175.2
$193.8
$205.7
$170.0
$145.7
$102.2
is particularly exciting as such
$41.1
$40.6
$57.5
$40.6
$51.2
$61.9
$41.9
$39.7
$39.4
$52.3
$58.6
$77.6
$94.1
$77.8
$98.1
$78.3
$72.1
$88.9
$85.8
$77.7
$76.0
$75.6
$58.4
• Challenging technical frontiers advancing

investment is critical for meeting the
”
$0 0 that require implementation across product
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 and service suites, e.g., cybersecurity world’s climate change targets.
concern ratcheting up further
2015 2016 2017 2018 2019 2020 2021 2022
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth
Source: Venture Pulse, Q4’22. Global Analysis of Venture Funding, KPMG Private Enterprise. Data provided by PitchBook, January 18, 2023
Jonathan Lavender #Q4VC

© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Global Head
KPMG Private Enterprise
KPMG International
7
Global median deal size ($M) by stage Global up, flat or down rounds
2015–2022* 2015–2022*
100%
$30
90%
$25 80%
70%
$20
60%
$16.6
50%
$15
40%
$10 30%
$7.9
20%
$5 $5.0
10%
$1.55
0%
$0 2015 2016 2017 2018 2019 2020 2021 2022*
2015 2016 2017 2018 2019 2020 2021 2022*
Up Flat Down
Angel & seed Early VC Later VC Venture growth
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by PitchBook, January 18, 2023
#Q4VC
8
Global median deal size ($M) by series

2015–2022*
$120
$100.0
$100
$80
$60
$45.0
$40
$25.0
$20
$10.5
$2.0
$0 $0.35
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
#Q4VC
9
Global median pre-money valuation ($M) by series

2015–2022*
$1,000
$900
$800.0
$800
$700
$600
$500
$400
$250.0
$300
$200
$100.0
$100
$33.6
$8.3
$0 $3.0
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
#Q4VC
10
Global deal share by series Global deal share by series

2015–2022*, number of closed deals 2015–2022*, VC invested ($B)
35,000 $700
30,000 $600
25,000 $500
20,000 $400
15,000 $300
10,000 $200
5,000 $100
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
Series D+ Series C Series B Series A Angel & seed Series D+ Series C Series B Series A Angel & seed
#Q4VC
11
“
Global financing trends to VC-backed companies by sector Global financing trends to VC-backed companies by sector
There’s been a real proliferation
of energy companies among the
100% Transportation 100% top deals in Q4’22. There are
two reasons for this. First, if
90% 90%
Commercial there’s a space that VC
Products &
Services
investors globally continue to
80% 80%
Consumer believe they should be putting
Goods &
70% Services money into, it’s energy or
70%
Software climate-related tech. And
60% 60%
second, because a number of
Pharma & other sectors have been
Biotech
50% 50% depressed, the acceleration in
Other the energy space is particularly
”
40% 40% noticeable.
Media
30% 30%
IT Hardware
20% 20%
HC Services &
10% Systems
10%
HC Devices &
0% Supplies Conor Moore
0%
Head of KPMG Private Enterprise in the Americas,
2015
2016
2017
2018
2019
2020
2021
2022*
2015
2016
2017
2018
2019
2020
2021
2022*
Energy Global Leader, Emerging Giants,
KPMG Private Enterprise,
KPMG International & Partner, KPMG in the US
#Q4VC
12
Corporate VC participation in global venture deals Global first-time venture financings of companies
2015–Q4'22 2015–2022*
$120 4,000 $80 18,000
3,500 $70 16,000

$100
3,000 14,000
$60
$80 12,000
2,500 $50
10,000
$60 2,000 $40
8,000
1,500
$40 $30
6,000
1,000
$20
$20 4,000
$103.3
$108.0
500
$17.5
$18.0
$31.0
$17.3
$39.3
$19.5
$15.6
$23.9
$30.2
$24.0
$37.5
$57.9
$41.2
$49.9
$33.9
$33.1
$38.2
$41.1
$40.5
$39.1
$51.9
$77.6
$82.1
$86.0
$70.1
$49.2
$36.5
$26.1
$18.1
$58.0
$10 2,000
$30.0
$27.7
$24.9
$36.8
$33.6
$36.2
$70.7
$53.5
$0 0
$0 0
Q3
Q2
Q2
Q1
Q2
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2015 2016 2017 2018 2019 2020 2021 2022*
2015 2016 2017 2018 2019 2020 2021 2022
Deal value ($B) Deal count Deal value ($B) Deal count
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by
PitchBook, January 18, 2023 PitchBook, January 18, 2023
Note: The capital invested is the sum of all the round values in which corporate venture capital investors participated, not the amount that corporate
venture capital arms invested themselves. Likewise, deal count is the number of rounds in which corporate venture firms participated.
Corporate players joined in the fewest rounds in close to two years amid the general pullback, Volatility and subsequent caution took a toll on first-time VC financing volume, although it is
largely due to growing caution and reassessment of strategic priorities. important to stress that VC invested in such deals still remained quite high.
#Q4VC
13
Global unicorn rounds Global venture-backed exit activity

2015–Q4'22 2015–Q4'22
$80 300 $500 1,200
$450
$70
250 1,000
$400
$60
$350
200 800
$50 $300
$40 150 $250 600
$200
$30
100 400
$150
$20
$100
50 200
$124.9
$113.5
$177.9
$171.7
$235.4
$301.2
$434.7
$302.2
$389.3
$119.1
$23.8
$36.5
$32.2
$44.0
$27.0
$26.5
$67.3
$22.3
$46.3
$36.5
$70.0
$30.1
$54.0
$63.6
$77.6
$58.8
$44.8
$73.1
$82.6
$69.3
$37.9
$38.6
$10
$18.7
$13.3
$28.1
$11.8
$17.1
$13.7
$22.0
$28.2
$22.3
$39.7
$21.1
$18.0
$25.6
$20.8
$21.4
$31.1
$33.4
$53.8
$66.3
$70.3
$66.4
$49.2
$42.2
$19.9
$15.9
$31.9
$50
$8.8
$6.6
$8.3
$6.8
$4.0
$4.9
$0 0 $0 0
Q4
Q3
Q1
Q2
Q3
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
Q1
Q2
Q3
Q4
Q2
Q2
Q3
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q4
2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022
Deal value ($B) Deal count Exit value ($B) Exit count
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by
PitchBook, January 18, 2023 PitchBook, January 18, 2023
Note: PitchBook defines a unicorn venture financing as a VC round that generates a post-money valuation of $1 billion or more. These are not necessarily first- Note: Exit value for initial public offerings is based on post-IPO valuation, not the size of the offering itself.
time unicorn financing rounds, but also include further rounds raised by existing unicorns that maintain at least that valuation of $1 billion or more.
Unicorn rounds fell to their lowest level in terms of volume and aggregate financing value in Exits closed last year on a very subdued note in terms of count and aggregate value, primarily
quite some time, on par roughly with early 2020 and 2019 levels. This decline is a telltale sign due to caution in public markets and retrenching by maturing VC-backed companies that were
of marked caution. preparing for significant liquidity events.
#Q4VC
14
Global venture-backed exit activity (#) by type Global venture-backed exit activity ($B) by type
2015–2022* 2015–2022*
$1,600
4,500
4,000 $1,400
3,500 $1,200
3,000
$1,000
2,500
$800
2,000
$600
1,500
$400
1,000
$200
500
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
Acquisition Buyout Public Listing Acquisition Buyout Public Listing
The bulk of exit value’s decline was driven by a slide in public listings by count, while buyouts held a bit more resiliently due to opportunistic buying
by PE firms. Market volatility will continue to exert an impact on public listings in general for some time until some stability occurs, while M&A is going
to become the primary driver of aggregate exit value in all likelihood.
#Q4VC
15
Global venture fundraising

2015–2022*
For some time now, the exposure to private markets has been
$350 3,000 a key theme for allocators of capital worldwide, and VC is no
exception, even during a year of marked volatility. 2022 caps
an elevated period for allocations since 2018, although it is
$300
2,500 worth noting fund counts dropped this year signaling a
potential coming retrenching.
$250
2,000
At the end of the year, allocators still
$200
kept piling into exposure to venture,
with just over $250 billion
1,500
$150
committed to the asset
class.
1,000
$100
500
$50
$145.4
$187.3
$193.9
$304.1
$242.9
$229.5
$284.5
$251.8
$0 0
2015 2016 2017 2018 2019 2020 2021 2022*
Capital raised ($B) Fund count
#Q4VC
16
Global venture fundraising (#) by size Global first-time vs. follow-on venture funds (#)
2015–2022* 2015–2022*
100%
2,500
90%
80%
2,000
70%
60%
1,500
50%
40%
1,000
30%
500 20%
10%
0 0%
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
Under $50M $50M-$100M $100M-$250M $250M-$500M $500M-$1B $1B+ First-time Follow-on
#Q4VC
17
Top 10 global financings in Q4'22
1. GAC Aion — $2.6B, Guangzhou, China — Automotive — Series A
2. Anduril — $1.5B, Costa Mesa, US — Aerospace & defense — Series E

10
3. SHEIN — $1B, Nanjing, China — Retail — Series F
4 7 8 9
5 4. TerraPower — $830M, Bellevue, US — Cleantech — Late-stage VC
2 3
1 6 5. SPIC Hydrogen Energy — $631M, Beijing, China — Cleantech — Series B
6. Voyah Car Technology — $630.8M, Wuhan, China — Cleantech — Series A
7. Group14 Technologies — $614M, Woodinville, US — Cleantech — Series C
8. ESWIN Material — $562.1M, Xi’an, China — Semiconductors— Series C
9. Fei Hong Technology — $537.5M, Beijing, China — Robotics — Early-stage VC

Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise.
*As of December 31, 2022. Data provided by PitchBook, January 18, 2023
10. Einride — $500M, Stockholm, Sweden — Automotive — Series C
#Q4VC
18
Global US Americas | Europe | Asia
#Q4VC
19
Both the number of VC deals and the total of VC investment in the US continued to fall in Q4’22, with VC investment dropping to less than a third of the amount
raised during the record quarter experienced during Q4’21. While there continued to be a wealth of dry powder in the VC market, many VC investors pulled back
from making major investments.
Increasing focus on energy, and ESG investments VC fundraising in US reaches record high in 2022
Over the past year, the US government has implemented legislation quite favourable to the Fundraising activity in the US reached a record high in 2022, although the number of funds being
development of the EV ecosystem and to the development of energy infrastructure more broadly. raised sank dramatically compared to 2022. This likely reflects both established VC firms raising
This support has helped spur additional interest and VC investment in the space. During Q4’22, larger funds and LPs making bigger bets on proven VC firms and fund managers rather than on
alternative energy and battery storage saw significant interest from VC investors in the US. riskier first time fundraising opportunities. During Q4’22, the time horizon for fundraising
Aerospace and Defense company Anduril raised $1.5 billion followed by Nuclear innovation noticeably moved out, with funds taking longer to fully capitalize than has been seen in recent
company TerraPower raised $830 million during the quarter, while energy storage company years. As a result, total fundraising will likely begin to fall heading into 2023.
Form Energy raised $450 million.
Cost reduction becoming normal for late stage companies; early stage companies
Renewed interest in cleantech and ESG has also helped drive investment in the US, both directly less affected
in ESG-focused solutions and in regtech solutions as companies look for better ways to
understand and report on their energy efficiency and ESG activities and, in certain cases, After an extended period of time where growth was king and revenue was the top concern, many
manage their regulatory reporting requirements. late stage and unicorn companies in the US have been forced to rein in their costs during 2022
and to heighten their focus on profitability. Q4’22 was no exception as tech companies laying off
Other sectors that remained attractive to VC investors during Q4’22 included military and space- significant percentages of their workforces became normal rather than noteworthy as they
focused solutions, B2B solutions, and health and biotech. worked to conserve their cash while delaying their next funding round or waiting for the IPO
window to open again. This focus on cash management, combined with the downward pressure
Threshold-valued unicorns working to avoid down rounds on valuations, has likely led to the big drop in investment for late stage deals.
During Q4’22, the US VC market continued to see startups looking for ways to obtain funds By comparison, the drop in VC investment at earlier deal stages was much less significant. This
without taking a hit to their valuations. A number of companies held flat rounds or conducted an likely reflects the inability of many Series A and B companies to delay funding rounds given they
extension of an existing funding round in order to raise bridge funding and potentially avoid the are often operating in a bare-bones capacity aimed to get the most from every dollar.
negativity associated with holding a true down round. The pressure to maintain an existing
valuation is particularly true among companies hovering at the $1 billion unicorn company
threshold given the negative publicity and employee morale that would likely result from losing
unicorn status. The quest to maintain a valuation could lead companies to accept much more
stringent deal terms, such as multiple liquidation preferences or ratchets, heading into Q1’23.
#Q4VC
20
Exit activity drops to five-year low as IPOs remain non-existent and bump in Trends to watch for in Q1’23
M&A fails to materialize
Looking forward to Q1’23, VC investment in the US is expected to remain subdued, except in
Exit activity took a significant hit over the course of 2022, dropping to a multi-year low by the high priority sectors, including energy and B2B solutions. We could also see large pension and
end of Q4’22. IPO activity in the US remained stalled as the public markets continued to sovereign wealth funds examining their investment allocations — which could affect VC
weather the storm of high inflation, rising interest rates, and macroeconomic uncertainty and the investment levels later in 2023.
valuations of many late stage companies faced continued downward pressure.
Given the number of tech sector layoffs occurring in the US, particularly in Silicon Valley, talent
M&A activity remained far more subdued than predicted last quarter, likely driven by investors will likely be an area to watch over the next few quarters to see how talent costs are affected or
holding back to see if valuations drop further and companies undertaking significant cost-cutting whether there is an upswell in new startups.
activities in order to avoid running out of cash and being forced to sell under less-than-optimal
IPO activity is expected to remain dead well into 2023 in the US as companies continue to delay
conditions. exits. Down rounds will likely become more common as late stage companies run out of runway
to delay new funding rounds. This could cause a number of unicorn companies to lose their
status as their valuations drop below the $1 billion threshold — or accept less-than-optimal deal
conditions (e.g., rachets) in order to maintain their position.
#Q4VC
21
Venture financing in the US

2015–Q4'22
Even if Q4 2022 figures tick upward somewhat in coming
$100 6,000 months, as further data is processed that currently is
unavailable or unknown, 2022 will turn in the first down year in
$90
some time for US venture. Given the maturation of the industry
5,000 as well as the unicorn phenomenon, any correction or cooling
$80
in valuations is likely to still result in some larger financings to
$70 serve as transitional rounds, or bridges of capital in the worst
4,000 case. The slowdown spans all stages, indicating a general
$60 aura of caution pervading the venture landscape for the time
being.
$50 3,000
$40
2,000
$30
$20
1,000
$10
$21.2
$21.5
$22.7
$21.0
$21.4
$27.0
$18.8
$16.9
$18.6
$22.8
$25.4
$48.1
$40.6
$37.4
$38.3
$33.7
$38.7
$37.8
$48.7
$46.0
$78.7
$83.5
$88.6
$93.9
$79.8
$75.5
$46.8
$36.2
$23.4
$30.7
$32.0
$35.0
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
22
Median deal size ($M) by stage in the US Up, flat or down rounds in the US
2015–2022* 2015–2022*
$35 100%
90%
$30
80%
$25
70%
60%
$20 $18.6
50%
$15
40%
$10.0
$10 $9.6 30%
20%
$5
10%
$2.0
$0
2015 2016 2017 2018 2019 2020 2021 2022* 0%
2015 2016 2017 2018 2019 2020 2021 2022*
Angel & seed Early VC Later VC Venture growth Up Flat Down
#Q4VC
23
“
Median deal size ($M) by series in the US
2015–2022*
A lot of companies that
achieved unicorn status
$120
($1 billion+ valuation) in the US
$110.8 are going to face challenges in
$100 H1’23, particularly those right
at the $1 billion mark. These
companies worked hard to
$80 reach that valuation and
resulting status in the market.
Now they’ll be working as hard,
$60 if not harder, to maintain their
$50.00 position in the herd. Investors
may likely to have all the
$40
leverage and it will likely
$30.0 require companies looking to
raise more funding and keep
$20
their unicorn status to give up a
$12.1
lot including added voting rights
”
$2.7
$0 $0.25 and liquidation preferences.
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
Note: Figures rounded in some cases for legibility.
Jules Walker
Senior Director
Business Development #Q4VC
KPMG in the US
24
“
Median pre-money valuation ($M) by series in the US
2015–2022*
On a global basis, we continue
to see downward pressure on
$1,200
valuations however, the
overall number of recorded
down-rounds remains low
$1,000
relative to previous years.
Many companies continue to
hold off new fundraising efforts
$800 $800.0
in hopes of better times and
higher valuations. We
anticipate there will likely be
$600
an increase in down-rounds
during the first half of 2022, as
these companies exhaust their
”
$400
cash reserves.
$265.0
$200
$120.0
$40.0
$0 $10.0 $4.8
2015 2016 2017 2018 2019 2020 2021 2022*
Sam Lush
Seed Angel A B C D+ Director, Private Equity
Group
KPMG in the US
Note: Figures rounded in some cases for legibility.
#Q4VC
25
Deal share by series in the US Deal share by series in the US

14,000 $350
12,000 $300
10,000 $250
8,000 $200
6,000 $150
4,000 $100
2,000 $50
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
26
Venture financing by sector in the US Venture financing by sector in the US

100% 100%
Transportation
90% 90%
Commercial
Products &
80% Services 80%
Consumer Goods
& Services
70% 70%
Software
60% 60%
Pharma & Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
10% Systems 10%
HC Devices &
0% Supplies 0%
2015
2016
2017
2018
2019
2020
2021
2022*
2015
2016
2017
2018
2019
2020
2021
2022*
Energy
#Q4VC
27
“
Corporate participation in venture deals in the US First-time venture financings of companies in the US
2015–Q4'22 2015–2022*
One interesting question
$50 1,200 $30 6,000 here in the US is ‘what will
happen with all the newly
$45
unemployed developers,
1,000
$40 $25 5,000 technologists, and the like?’
Will they start their own
$35 companies? Will they accept
800
$20 4,000
$30 lower salaries? Will they
move to some other location
$25 600 or embrace remote work?
$15 3,000
$20
We don’t have the answer
400
right now, but it could be
$15 $10 2,000 quite exciting, particularly if it
means a new cohort of
”
$10
200 startups appear in 2023.
$5 $5 1,000
$11.0
$15.2
$10.3
$13.0
$15.5
$16.9
$26.2
$16.5
$15.8
$16.9
$11.8
$18.7
$24.0
$19.6
$38.9
$40.0
$43.9
$36.7
$35.7
$14.2
$19.5
$37.4
$21.6
$9.2
$9.2
$8.8
$9.6
$7.9
$6.5
$6.8
$8.8
$9.7
$10.0
$15.9
$15.5
$15.1
$25.5
$23.4
$9.6
$9.8
$0 0
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 $0 0
2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022*
Peter Kehrli
Partner
KPMG in the US
#Q4VC
28
Venture-backed exit activity in the US

2015–Q4'22
After the lofty heights of exits in 2020 and 2021, a potentially

$300 600 likely regression has now developed further into a skid. The
final quarter of 2022 saw the lowest count of exits completed
in years, culminating in lower exit value than recorded in a
$250 500 single quarter since the start of 2015. Should this trend persist,
liquidity concerns may become even more of a crunch going
forward, but for now the slowdown in exits is not yet overly
concerning until it stretches further along.
$200 400
$150 300
$100 200
$50 100
$148.3
$103.7
$173.6
$268.9
$201.7
$197.8
$12.3
$19.4
$23.6
$13.1
$18.6
$22.0
$11.0
$33.6
$20.6
$16.3
$31.7
$19.7
$36.8
$34.9
$36.7
$51.5
$45.1
$24.3
$16.8
$31.9
$84.8
$34.0
$17.3
$14.8
$22.1
$5.2
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Exit value ($B) Exit count
#Q4VC
29
Venture-backed exit activity (#) by type in the US Venture-backed exit activity ($B) by type in the US
2015–2022* 2015–2022*
$800
2,500
$700
2,000
$600
$500
1,500
$400
1,000 $300
$200
500
$100
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
Acquisition Buyout Public Listing
#Q4VC
30
US venture fundraising
2015–2022*
Regardless of budding concerns around the asset class’s
$180 1,400
performance durability, capital allocators continue to pledge
commitments to VC fund managers at such a clip that 2022
$160 ended up with a record sum even as the number of fund
1,200
closures slid significantly. More experienced and larger
$140 managers are winning out in processes for now, but it is worth
noting first-time funds also still closed healthy sums.
1,000
$120
… even as fundraising volume has
$100 800
slowed drastically, 2022 has
$80
already set a new high for
600
capital committed,
$60 surpassing $160 billion.
400
$40
200
$20
$154.1
$162.6
$43.2
$51.4
$44.9
$60.5
$71.4
$93.3
$0 0
2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
31
Venture fundraising (#) by size in the US Venture fundraising ($B) by size in the US
2015–2022* 2015–2022*
1,200 $180
$160
1,000
$140
800 $120
$100
600
$80
400 $60
$40
200
$20
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
Under $50M $50M-$100M $100M-$250M $250M-$500M $500M-$1B $1B+ Under $50M $50M-$100M $100M-$250M $250M-$500M $500M-$1B $1B+
#Q4VC
32
First-time vs. follow-on funds (#) in the US First-time vs. follow-on funds ($B) in the US
2015–2022* 2015–2022*
100% 100%
90% 90%
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
First-time Follow-on First-time Follow-on
#Q4VC
33
Global | US Americas Europe | Asia
#Q4VC
34
Both VC investment and the number of VC deals in the Americas fell for the fourth consecutive quarter in Q4’22 as the level of investment fell in most jurisdictions,
including the US, Brazil, and Mexico. Similar to VC investment trends seen globally, ongoing concerns related to high inflation, rising interest rates, declining valuations,
and a potential recession continued to affect VC investor sentiment across the Americas during the quarter.
Number of megadeals falls in Americas, particularly in the US Credit-focused fintechs gaining attractiveness in Brazil
Despite a significant amount of dry powder, VC investors in the Americas took a conservative Given rising interest rates, geopolitical uncertainties, the Q4’22 national election, and an
approach to their investments during Q4’22. This likely contributed to a much smaller number of economic slowdown, many companies in Brazil have started to face credit and balance sheet
very large funding rounds, including $100 million+ megadeals. As the largest VC market in the challenges. This has led to growing VC investor interest in credit-focused fintech companies,
world, the US bore the brunt of this decline; during Q4’22, the US only attracted three deals over including startups looking to provide better credit tools and structures, new credit business
$500 million: a $1.5 billion deal by Anduril, an $830 million raise by alterative energy innovator models, and data analytics to support credit decision making.
TerraPower and a $614 million deal by Seattle-based battery manufacturer Group14
Technologies. Fintech more broadly continued to be the most attractive area for investment in Brazil during
Q4’22, followed by cloud and cyber solutions and agritech. Interest in cross-sector offerings also
Outside of the US, few companies attracted large funding rounds. Brazil-based exchange grew, such as companies focused on agri-fintech or agri-biotech.
receivables company Cerc raised $101 million during Q4’22 — the only startup in Latin America
to attract a $100 million+ funding round. The largest deal in Canada was a $318 million raise by VC investment in Canada remains relatively solid in Q4’22 as government
emissions adsorption solutions provider Svante, while the largest deal in Mexico was $60 million enhances startup supports
of funding for expense management software maker Mendel.
VC investment in Canada increased slightly quarter-over-quarter. While the level of investment
Crypto companies facing stronger scrutiny and due diligence from VC investors was much lower in Q4’22 compared to the same quarter in 2021, the total remained in line with
investment levels seen in quarters prior to 2021.
Over the past two years, crypto companies in the Americas have received a significant amount of
interest and funding from VC investors in the Americas, including follow-on investors and those Canada continued to see strong government support for the VC market ecosystem this quarter.
motivated by the fear-of-missing-out (FOMO). The well-publicized collapse of Bahamas-based The Business Development Bank of Canada launched several new funds in Q4’22: a $400 million
digital exchange FTX — once valued at $32 billion — in Q4’22 put a significant amount of climate tech fund focused on supporting the development and growth of technologies needed for
scrutiny on investor decision-making related to the space. It has also driven many VC investors Canada to achieve Net Zero and a $300 million fund focused on supporting women entrepreneurs
in the US, Americas, and globally to review, improve, and enhance their due diligence platforms with companies at the Seed and Series A and B levels.
and processes.
#Q4VC
35
Disparate maturity of VC markets in region causing unique variations in Trends to watch for in Q1’23
investment trends
Heading into Q1’23, VC investment across the Americas is expected to remain relatively soft
The US is the most mature VC market in the world; during Q4’22, late stage deals there saw the given ongoing global macroeconomic concerns. Deals will likely take more time to complete as
biggest decline in funding as companies worked to push back new funding rounds to 2023 and VC investors conduct more due diligence and put a laser focus on profitability and business
VC investors took more time to evaluate potential deals — while earlier deal stages showed model sustainability.
some resilience to the investment pullback.
The change in government in Brazil could see investors acting with more caution in Q1’23,
Comparatively, VC investment in Brazil and across much of Latin America focused primarily on while they get a stronger sense of what the new regime’s priorities will be. Fintech is expected
companies raising Series A and later rounds, while companies looking for Seed and Pre-Seed to remain the hottest sector for investment in Brazil, followed by cybersecurity, B2B cloud
funding continued to struggle. Macroeconomic conditions will be challenging in 2023 the vast solutions, and agritech.
difference in the maturity between the VC markets in the US, Brazil, and other countries in the
region is likely contributing to the unique investment priorities seen within individual countries.
#Q4VC
36
Venture financing in the Americas

2015–Q4'22
All in all, dealmaking in the Americas has slowed back to
$120 7,000
historical averages after the record-breaking run across 2021
and the first half of 2022. Caution is on the rise across the
board as economic prospects and global uncertainty.
6,000
$100
5,000 … although figures are still

$80
healthy compared to even
4,000 2020 levels, 2022 saw softening in
$60 the pace of dealmaking overall, back
3,000 to quarterly tallies
$40 reminiscent of the late
2,000
2010s.
$20
1,000
$102.0
$21.9
$22.6
$23.6
$22.2
$27.5
$19.5
$17.8
$19.4
$24.2
$26.6
$24.4
$32.6
$33.7
$36.4
$50.3
$42.4
$40.3
$41.4
$36.1
$40.9
$39.7
$51.0
$48.8
$93.0
$88.7
$80.4
$49.6
$39.2
$21.6
$83.0
$98.3
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
37
Median deal size ($M) by stage in the Americas Up, flat or down rounds in the Americas
2015–2022* 2015–2022*
$35 100%
90%
$30
80%
$25
70%
60%
$20
$18.6
50%
$15
40%
$10 $10.0 30%

$8.4
20%
$5
10%
$2.0
$0 0%
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
38
Median deal size ($M) by series in the Americas

2015–2022*
$120
$110.8
$100
$80
$60
$50.0
$40
$29.85
$20
$12.0
$2.5
$0 $0.25
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
#Q4VC
39
Median pre-money valuation ($M) by series in the Americas

2015–2022*
$1,200
$1,000
$825.0
$800
$600
$400
$270.0
$200
$120.0
$40.0
$0 $4.9
2015 2016 2017 2018 2019 2020 2021 2022* $10.0
Seed Angel A B C D+
#Q4VC
40
Deal share by series in the Americas Deal share by series in the Americas
16,000 $350
14,000 $300
12,000
$250
10,000
$200
8,000
$150
6,000
$100
4,000
$50
2,000
$0
0
2015 2016 2017 2018 2019 2020 2021 2022*
2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
41
Venture financing of VC-backed companies by sector in the Americas Venture financing of VC-backed companies by sector in the Americas
2015–2022*, # of closed deals 2015–2022*, VC invested ($B)
100% Transportation 100%
90% Commercial 90%

Products &
80% Services 80%
Consumer Goods
& Services
70% 70%
Software
60% 60%
Pharma &
Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
Supplies
0% 0%
Energy
2015
2016
2017
2018
2019
2020
2021
2022*
2015
2016
2017
2018
2019
2020
2021
2022*
#Q4VC
42
“
Venture financing in Canada
2015–Q4'22
VC investment in Canada rose
$6,000 450 slightly quarter-over-quarter,
showing resilience compared to
400 many other jurisdictions around
$5,000
the world. Strong seed and
350
early-stage deals--a mainstay
$4,000 300 of Canada's VC market this
year--likely helped keep VC
250
investment relatively stable.
$3,000
200
While US investors continue to
drive much of the VC
$2,000 150 investment in Canada, it's
hoped new government
100
investment funds will help
”
$1,000
$1,397.3
boost investment in 2023.
$1,227.5
$1,155.2
$1,875.0
$1,495.3
$1,286.3
$1,137.0
$1,279.2
$2,729.6
$4,984.5
$2,513.5
$3,052.1
$4,639.4
$2,231.4
$1,559.2
$1,866.3
$487.6
$527.4
$534.5
$420.3
$600.8
$344.3
$541.1
$682.5
$317.7
$786.3
$949.5
$772.6
$915.9
$705.9
$920.6
$804.7
50
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Deal value ($M) Deal count
Sunil Mistry
Partner, KPMG Private Enterprise,
Technology, Media &
Telecommunications (TMT)
KPMG in Canada #Q4VC
43
Venture financing in Mexico

2015–Q4'22
$1,800 70
$1,600
60
$1,400
50
$1,200
$1,000 40
$800 30
$600
20
$400
10
$1,139.7
$1,618.9
$200
$143.9
$320.6
$146.7
$274.4
$204.7
$645.8
$285.0
$859.9
$864.1
$684.4
$285.1
$230.1
$25.7
$31.8
$21.8
$12.9
$54.0
$71.9
$18.3
$26.4
$66.4
$22.6
$51.9
$70.5
$56.6
$81.5
$80.0
$60.3
$13.7
$52.9
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
44
“
Venture financing in Brazil
2015–Q4'22
Startups in Brazil shifted
$3,000 180 their priorities from driving
growth to generating cash
160 and cash preservation
$2,500
during Q4’22. VC investors
140
helped drive some of this
$2,000 120 shift, putting a higher
priority on the sustainability
100 of business models and on
$1,500 the ability of startups to
80 grow in a consistent manner
given current economic
”
$1,000 60
conditions.
40
$500
$1,081.7
$2,549.3
$1,944.4
$2,408.5
$1,619.2
$1,015.3
20
$157.7
$282.0
$135.3
$119.2
$123.9
$103.1
$148.9
$232.4
$214.0
$256.6
$456.8
$111.3
$281.8
$974.4
$152.6
$539.4
$351.3
$506.0
$568.5
$875.1
$694.0
$917.2
$547.0
$242.1
$70.0
$85.0
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Deal value ($M) Deal count Rodrigo Guedes

Managing Director
KPMG in Brazil
#Q4VC
45
Top 10 financings in Q4'22 in Americas
2 3
7
1. Anduril — $1.5B, Costa Mesa, US — Aerospace & defense — Series E
8 5
2. TerraPower — $830M, Bellevue, US — Cleantech — Late-stage VC
10
3. Group14 Technologies — $614M, Woodinville, US — Cleantech — Series C
4 1 9
4. Atlantic Holding — $485.1M, Menlo Park, US — B2B — Series A 6
5. Form Energy — $450M, Somerville, US — Cleantech — Series E
6. Tryllian — $414.6M, Los Angeles, US — Fintech — Late-stage VC
7. Arctic Wolf — $401M, Eden Prairie, US — Cybersecurity — Late-stage VC
8. Queen of Raw — $400M, New York, US — Fintech — Late-stage VC
9. ServiceTitan — $365M, Glendale, US — Fintech — Series H
10. Cyara — $350M, Redwood City, US — Marketing tech — Series B
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31,
2022. Data provided by PitchBook, January 18, 2023
#Q4VC
46
Global | US | Americas Europe Asia
#Q4VC
47
VC investment in Europe plummeted to a two-year low in Q4’22, amidst an environment of high inflation, rising interest rates, the ongoing war in the Ukraine, and skyrocketing
energy prices. Compared to recent quarters, the largest deals in Europe during Q4’22 were substantially smaller — although still sizeable and geographically diverse — led by
three deals in the electric vehicle and mobility ecosystem - a $500 million raise by Sweden-based Einride, a $295 million raise by Sweden’s Volta Trucks and a $245.9 million rase
by French battery producer Verkor.
VC investors in Europe prioritizing companies in their own portfolios After big drop in Q3’22, VC investment in the UK remains subdued
During Q4’22, VC investors across Europe showed increasing caution, putting a significant Investor sentiment in the UK remained subdued during Q4’22, driven both by global
amount of pressure on their portfolio companies to cut costs and reduce their spend. While macroeconomic factors and by the uncertain domestic political situation experienced during the
mature startups undertook the most publicised cost-cutting measures in Europe during the quarter. While many sectors saw VC investment plummet, the UK saw several pockets of strong
quarter, primarily major headcount reductions and reductions in real estate, the later part of Q4’22 activity, including sustainability, gaming, and health and biotech. A number of fintech subsectors
saw a wave of smaller VC backed startups starting to follow suit. also continued to attract VC investors and corporates — including regtech, cybersecurity, and B2B
solutions — while others, including BNPL, struggled. With BNPL regulations expected in the UK
Average Seed stage deal size in Europe grows significantly in 2022 during 2023, the BNPL space could see smaller startups fail or be acquired by larger players over
Over the course of 2022, the average Seed stage deal size in Europe soared quite significantly the next few quarters.
as US investors found real value in European companies. US investors in the region typically VC investment slows in Germany; B2C takes biggest hit
invested larger amounts into deals than their European counterparts because of the
comparatively low valuations of companies to be had in Europe. The declining value of the Euro Germany saw VC investment slow considerably in Q4’22 as valuations dropped and more
against the US dollar also offered a unique opportunity for US investors to buy European companies accepted flat rounds. The largest deal of the quarter was quite small compared to
companies at very reasonable prices. recent quarters: a $101.7 million raise by travel search engine platform company Holidu.
Energy crisis creates VC market winners and losers The B2C and D2C spaces in Germany felt enormous pressure in Q4’22, forced to juggle rising
interest rates, high inflation, and declining demand. The B2B space faired much better among VC
The ongoing energy crisis in Europe continued to put a major spotlight on companies operating in investors, with investment particularly focused on solutions aimed at helping companies digitize,
the renewable energy and energy storage spaces, spurring strong investment in a wide range of become more efficient, or reduce costs. Fintech and energy were also strong areas of VC
companies. In addition to the large raise by Verkor, Estonia-based renewable energy investment in Q4’22. With funding becoming harder to attract, some startups have started looking
infrastructure company Sunly raised $196 million, Belgium-based hydrogen energy company for strategic buyers, which could lead to more M&A activity in Q1’23. Longer term, Germany could
Tree Energy Solutions raised $129 million, and Norway-based renewable energy financing see additional investment as corporates look to conduct more value creation domestically.
company Empower New Energy raised $74 million.
Europe also saw significant investments in ESG and energy-adjacent businesses during Q4’22,
including a $113 million raise by Norway-based Reetec — which manufactures minerals used in
EV motors and wind turbines in an environmentally sustainable way.
#Q4VC
48
VC investment in Israel remains relatively quiet in Q4’22 Nordics region remains attractive to VC investors in Q4’22
VC investment in Israel remained relatively quiet in Q4’22 as a number of companies held down The Nordics region continued to attract solid interest from VC investors in Q4’22 in terms on deal
rounds or made serious efforts to cut headcount in order to reduce costs in order to appease value, most prominently in the energy and electric vehicle space, despite a drop in total VC
their investors. Such cost-cutting was industry agnostic, with companies even in highly resilient investment. In addition to Sweden’s Einride($500 million) and Volta Trucks ($295 million),
sectors like cybersecurity making reductions. Some founders in Israel closed down companies Norway-based food delivery platform Oda raised $151 million — although the latter was at a
entirely, returning funding to their investors in order to sustain their future credibility. M&A activity substantially lower valuation than the company’s previous funding round. Trends in the Nordics
in Israel was almost dead in Q4’22; if this trend continues, there could be a major impact on the region are lagging a bit behind vs. for example the US. This could result in softer investment in
startup economy in Israel as it is quite reliant on new money coming in — particularly from US Q1’23 as the VC market in the region sees more impact from the global downturn and the
investors and corporates. Despite challenges, several industries will likely continue to see runways of the companies start to shorten.
investment in Israel, including any solutions with military applications.
Trends to watch for in Q1’23
Ireland’s tech ecosystem remains strong despite some setbacks
Looking forward to Q1’23, VC investment in Europe is expected to remain relatively soft, with no
VC investment in Ireland remained steady quarter-over-quarter, led by a raise by Tines, Carrick end in sight to many of the challenging factors affecting the VC market. While many sectors will
Therapeutics and Vaultree. The country was not, however, immune to industry cost-cutting — likely face challenges over the next quarter, VC investment will likely continue apace in high
particularly from large corporates looking to reduce headcount and their global real estate priority areas, including energy, energy security, and ESG. While interest over the near-term is
footprint. In Q4’22, Meta announced plans to reduce headcount in Ireland by approximately 350 expected to focus on energy independence and energy alternatives, interest in cleantech will
as part of a global initiative, and plans to scale back the real estate footprint of its EMEA likely accelerate as countries in the region work to meet their decarbonization targets.
headquarters in Dublin.
Interest in lending solutions could also pick up as companies struggle to access cash and startups
look for innovative options to avoid down rounds.
#Q4VC
49
Venture financing in Europe

2015–Q4'22
A sustained six-quarter stretch of elevated venture activity has
$40 4,000
concluded with the diminishing tallies during the back half of
2022. Caution is on the rise although the environment remains
$35 3,500 complex with still-elevated levels of dry powder contrasted
against a volatile array of risks and murky economic
prospects.
$30 3,000
$25 2,500 … the impact of volatility both

economic and political is finally being
$20 2,000
felt, yet European startup
$15 1,500 ecosystems still saw a
$10 1,000 healthy quarter of activity
relative to longer-term
$5 500
averages…
$10.6
$11.2
$11.1
$10.4
$11.3
$11.9
$16.9
$16.8
$28.5
$35.8
$30.1
$32.2
$34.4
$31.3
$21.2
$12.9
$12.0
$5.5
$5.3
$5.1
$5.8
$5.3
$6.2
$4.9
$4.6
$5.5
$7.4
$6.5
$9.3
$9.8
$8.5
$7.7
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
50
Median deal size ($M) by stage in Europe Up, flat or down rounds in Europe
2015–2022* 2015–2022*
$12 100%
90%
$10
80%
$8.6 70%
$8
60%
$6 50%
$5.0 40%
$4
30%
$2.2 20%
$2
$1.3
10%
$0 0%
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
51
Median deal size ($M) by series in Europe

2015–2022*
$140
$123.0
$120
$100
$80
$60
$57.9
$40
$30.0
$20 $10.3
$1.7
$0.5
$0
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
#Q4VC
52
Median pre-money valuation ($M) by series in Europe

2015-2022*
$1,400
$1,200 $1,200.0
$1,000
$800
$600
$400
$257.4
$200
$82.7
$25.2
$0 $3.1 $6.0
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by PitchBook, January 18, 2023. The figures for Series D or later valuations in 2015 and 2017 are based on non-normative population sizes.
#Q4VC
53
Deal share by series in Europe Deal share by series in Europe

8,000 $100
$90
7,000
$80
6,000
$70
5,000
$60
4,000 $50
$40
3,000
$30
2,000
$20
1,000
$10
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
54
European venture financings by sector European venture financings by sector

100% 100%
Transportation
90% 90%
Commercial
Products &
80% Services 80%
Consumer Goods &
Services
70% 70%
Software
60% 60%
Pharma & Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
10% Systems 10%
HC Devices &
0% Supplies 0%
2015
2016
2017
2018
2019
2020
2021
2022*
2015
2016
2017
2018
2019
2020
2021
2022*
Energy
#Q4VC
55
Corporate VC participation in venture deals in Europe First-time venture financings of companies in Europe
2015–Q4'22 2015–2022*
$18 900 $14 4,500
$16 800 4,000

$12
$14 700 3,500
$10
$12 600 3,000
$10 500 $8 2,500
$8 400
$6 2,000
$6 300
1,500
$4 200 $4
1,000
$2 100
$12.7
$16.7
$13.9
$14.1
$16.2
$13.6
$10.8
$2
$1.7
$7.4
$1.3
$2.2
$1.5
$1.5
$2.8
$2.2
$2.0
$1.9
$3.1
$2.1
$2.9
$3.0
$3.4
$3.5
$4.1
$4.1
$5.4
$5.2
$3.9
$4.4
$6.1
$7.9
$6.1
500
$12.3
$3.1
$3.1
$4.0
$5.0
$4.0
$4.6
$7.4
$0 0
Q2
Q2
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q3
Q4
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
56
Venture-backed exit activity in Europe

2015–Q4'22
Exit volume and value both remained subdued at best in the
$80 400
back half of 2022. It remains to be seen how protracted this
stretch of sluggish selling may be, due to the uptick in caution
$70 350 on the part of fund managers and executives alike.
$60 300
… after a strong stretch for exit
$50 250 value, a clear slowdown is
$40 200
evident, while prospects
remain murky.
$30 150
$20 100
$10 50
$38.7
$12.6
$11.1
$10.4
$34.6
$31.7
$68.2
$28.8
$16.1
$16.4
$5.3
$6.8
$3.3
$8.2
$3.1
$4.2
$2.5
$5.3
$7.5
$3.3
$4.5
$2.0
$5.2
$2.5
$5.2
$8.9
$1.8
$5.5
$3.6
$5.0
$4.1
$5.8
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
57
Venture-backed exit activity (#) by type in Europe Venture-backed exit activity ($B) by type in Europe
2015–2022* 2015–2022*
1,400 $180
$160
1,200
$140
1,000
$120
800
$100
600 $80
$60
400
$40
200
$20
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
Acquisition Buyout Public Listing Acquisition Buyout Public Listing
#Q4VC
58
“
European venture fundraising
2015–2022*
Investors in the UK are definitely
The past three years have seen healthy tallies
$35 400 for capital commitments to venture coffers, being more cautious — not just
which could still exert an upward pressure on funds, but also family offices and
350
dealmaking metrics going forward. even individuals — and debt has
$30
been much more expensive as
well. This is a challenge as there
$25
300 ... at nearly $27 billion, are a lot of businesses out there
2022 still saw fund managers looking for funding at the
250
$20
rake in plenty of capital moment. That said, we’re still
200
commitments to fuel seeing startups raising money
and funds putting money out.
dealmaking in years to come.
$15 But there’s definitely been a
150 flight to quality. Unless a
$10
company can really prove the
100 strength of their story and
technology play, they are going
”
$5 to struggle.
50
$12.4
$25.3
$18.9
$23.2
$28.2
$29.9
$26.9
$18.3
$0 0
2015 2016 2017 2018 2019 2020 2021 2022*
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by PitchBook, January 18, 2023 Robert Baxter
Head of Corporate Finance
KPMG in the UK
#Q4VC
59
Venture fundraising (#) by size in Europe First-time vs. follow-on venture funds (#) in Europe
2015–2022* 2015–2022*
300 100%
90%
250
80%
70%
200
60%
150 50%
40%
100
30%
20%
50
10%
0 0%
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
60
“
Venture financing in the United Kingdom
2015–Q4'22
Thinking about 2023, there is
$12 1,200 some sense that IPO activity
could make a broad return in
the second-half of the year,
$10 1,000 with some pockets of activity
even before that. ESG
businesses could be
$8 800 particularly compelling; while
we might not see IPOs in the
space right away, we could
$6 600
start to see companies
beginning the work required to
”
become IPO ready.
$4 400
$2 200
$10.1
$3.2
$8.7
$8.5
$1.6
$1.1
$2.3
$2.1
$1.7
$1.6
$1.5
$1.7
$1.5
$2.8
$2.4
$4.4
$3.1
$2.6
$2.7
$3.8
$3.9
$3.5
$3.3
$3.2
$3.7
$4.4
$5.3
$8.6
$9.7
$9.1
$5.4
$3.7
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 Warren Middleton
Deal value ($B) Deal count Lead Partner for Emerging Giants,
Center of Excellence in the UK
KPMG in the UK
#Q4VC
61
Venture financing in London

2015–Q4'22
$9 700
$8
600
$7
500
$6
$5 400
$4 300
$3
200
$2
100
$1
$1.2
$1.3
$6.1
$1.0
$0.5
$1.1
$0.9
$1.0
$0.9
$0.9
$0.7
$2.1
$1.5
$3.5
$2.0
$1.7
$2.4
$2.1
$2.7
$1.7
$2.0
$1.8
$2.4
$3.1
$3.1
$5.7
$6.9
$6.0
$7.8
$6.3
$3.6
$2.4
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Deal value ($B) Deal count
#Q4VC
62
“
Venture financing in Ireland
2015–Q4'22
While VC investment has
$800 200 returned to the levels seen prior
to 2021, the market itself hasn’t
180
$700 simply returned to the way it
160
was in 2019 or 2020. Our
$600 geopolitical and economic
140 circumstances have changed
$500
fundamentally and in an
120 incredibly short period of time.
Both companies and VC
$400 100
investors are working to
80 understand what those shifts
$300
mean and how best to
”
60 respond.
$200
40
$100
$175.1
$234.5
$136.2
$304.9
$168.1
$238.0
$187.0
$100.5
$178.4
$131.1
$390.5
$368.0
$440.2
$108.3
$131.9
$126.0
$119.4
$103.9
$232.8
$291.5
$586.7
$385.7
$707.4
$346.2
$418.3
$442.9
$393.4
$132.0
$191.8
20
$41.3
$90.0
$51.5
$0 0
2015 2016 2017 2018 2019 2020 2021 2022

Anna Scally
Partner, Head of Technology &
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022. Data provided by PitchBook, January 18, 2023 Media & Fintech Lead
KPMG in Ireland
#Q4VC
63
“
Venture financing in Germany
2015–Q4'22
In the coming year, I believe
$7,000 400 we are going to see more
value creation in Germany.
$6,000
350 Historically, a lot has been
designed here and produced
300 elsewhere, but now we have
$5,000
technologies like 3D printing
250 and moulding techniques.
$4,000 Companies don’t need
200 hundreds of people; they just
$3,000 need space. In 2023 we
150 should see more investment
in this space — in smart
$2,000
100 manufacturing that capitalizes
on German engineering
”
$1,000 capabilities.
$1,708.6
$1,460.3
$1,190.4
$1,480.7
$1,982.2
$1,594.9
$1,334.9
$1,897.5
$2,271.8
$1,944.0
$3,307.4
$3,987.1
$4,040.4
$6,654.0
$2,718.5
$5,387.7
$3,781.7
$1,312.3
$1,062.2
$1,273.0
50
$642.4
$868.1
$817.6
$621.4
$575.0
$540.6
$632.9
$549.4
$897.9
$892.7
$968.3
$818.2
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Dr. Ashkan Kalantary

Deal Advisory,
M&A GrowthTech & Ventures #Q4VC
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. KPMG in Germany
64
Venture financing in Berlin

2015–Q4'22
$6,000 180
160
$5,000
140
$4,000 120
100
$3,000
80
$2,000 60
40
$1,000
$1,024.4
$1,207.6
$1,249.4
$1,254.9
$1,222.6
$1,871.6
$2,060.5
$2,403.8
$4,921.4
$1,679.2
$3,323.7
$1,044.8
20
$918.8
$538.1
$741.9
$332.6
$232.5
$354.6
$176.2
$385.6
$319.4
$407.6
$414.5
$436.2
$190.1
$832.4
$494.7
$412.4
$725.2
$636.6
$971.3
$347.0
$0 0
2015 2016 2017 2018 2019 2020 2021 2022

#Q4VC
65
Venture financing in Spain

2015–Q4'22
$1,600 200
180
$1,400
160
$1,200
140
$1,000
120
$800 100
80
$600
60
$400
40
$1,518.8
$1,501.9
$200
$127.5
$161.6
$102.0
$228.1
$354.4
$158.0
$150.9
$315.7
$186.9
$158.4
$339.3
$264.8
$376.6
$191.7
$179.5
$496.7
$398.6
$376.1
$420.9
$286.9
$566.7
$383.1
$475.7
$700.8
$874.8
$710.1
$628.5
$647.6
20
$97.9
$79.5
$0 0
2015 2016 2017 2018 2019 2020 2021 2022

#Q4VC
66
Venture financing in France

2015–Q4'22
$7,000 450
400
$6,000
350
$5,000
300
$4,000 250
$3,000 200
150
$2,000
100
$1,000
$1,171.5
$1,355.0
$1,275.1
$1,353.9
$1,460.4
$1,888.2
$1,533.4
$2,683.1
$2,091.4
$2,096.4
$4,146.2
$4,009.1
$2,718.8
$6,235.1
$3,297.5
$2,788.5
$1,622.4
$1,471.5
$1,176.6
50
$445.1
$609.0
$352.2
$478.6
$546.1
$549.9
$980.8
$884.3
$730.6
$794.9
$956.9
$868.9
$541.0
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
67
Venture financing in Paris

2015–Q4'22
$4,000 200
180
$3,500
160
$3,000
140
$2,500
120
$2,000 100
80
$1,500
60
$1,000
40
$1,071.6
$1,176.6
$1,899.3
$3,243.7
$2,221.3
$1,583.7
$3,383.7
$2,211.6
$2,222.5
$500
$133.9
$277.0
$367.2
$106.0
$285.2
$324.3
$375.9
$505.9
$658.0
$479.8
$481.8
$284.7
$704.7
$901.8
$460.7
$676.5
$812.5
$882.1
$650.0
$924.1
$918.0
$957.5
$797.4
20
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
68
“
Venture financing in the Nordics
2015–Q4'22
Q4’22 was quite reflective of
$7,000 500 the VC market in the Nordics
region historically with a
450 handful of bigger growth
$6,000 rounds. This was a bit
400 surprising, but the VC market
$5,000 here often lags a bit behind
350
the US trends-wise, so Q1’23
300
could also show more of a
$4,000 freeze in growth rounds. That
250 said, there shouldn’t be much
of a drop in first financings
$3,000
200 because there are quite a lot
of rather fresh local pre-
$2,000 150 seed/seed funds and the
valuations on this stage
100
haven’t been as high as
”
$1,000
$1,306.8
$1,169.9
$2,097.8
$1,597.0
$1,009.3
$2,376.3
$1,844.3
$4,255.2
$6,177.6
$2,065.0
$2,454.4
$3,625.4
$2,195.1
$3,427.7
$1,663.1
elsewhere.
$468.3
$891.4
$371.6
$410.5
$294.5
$343.8
$549.1
$612.5
$535.6
$508.6
$706.4
$709.3
$820.3
$570.9
$774.5
$972.2
$817.5
50
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Jussi Paski
Head of Startup Services
KPMG in Finland
#Q4VC
69
“
Venture financing in Israel
2015–Q4'22
Looking forward to 2023, we will
likely see a "new normal" emerging in
$4,500 250 terms of valuations and M&A.
Investment volumes will be adjusted
$4,000 to current companies' valuations,
while some of the dry powder
200 originally intended for the tech sector
$3,500
by institutional investors will be
shifted to more options. Proper path
$3,000
to profitability, as well as the business
150 model's sustainability, will take center
$2,500 stage in companies' valuations in
addition to growth of ARR. In
$2,000 addition, contrary to the trend of
100 2021, public companies may look to
$1,500 turn private, as their listed multiples
are significantly lower than those of
$1,000
similar private companies.
50 Nevertheless, challenging times can
produce innovative and resilient
$1,141.7
$1,231.7
$1,092.9
$1,077.6
$1,267.6
$1,032.5
$1,124.1
$1,339.4
$1,667.4
$2,654.3
$2,890.0
$3,010.9
$4,131.1
$3,347.4
$3,750.1
$1,594.7
$1,137.0
$1,064.3
$500
$785.3
$341.5
$304.9
$633.8
$781.4
$528.9
$526.4
$285.4
$632.9
$891.5
$721.8
$691.1
$857.8
$910.3 solutions. As such, 2023 may prove

to be a year of mid and long-term
$0 0
”
opportunities for investors and tech
companies alike.
2015 2016 2017 2018 2019 2020 2021 2022
Dina Pasca-Raz
Head of Technology, #Q4VC
© 2023 Copyright owned by one or more of the KPMG International entities. KPMG International entities provide no services to clients. All rights reserved. Head of International Tax
KPMG in Israel 70
Top 10 financings in Q4'22 in Europe
9
5
1
1. Einride — $500M, Stockholm, Sweden — Automotive — Series C 2
2. Volta Trucks — $295.25M, Stockholm, Sweden — Automotive — Series C 8 4

10
3. Verkor — $245.9M, Grenoble, France — Cleantech — Early-stage VC 6
4. Market Financial Solutions — $226.2M, London, UK — Fintech — Late-stage VC

3
5. Sunly — $196.4M, Tallinn, Estonia —Cleantech — Early-stage VC
6. Mews — $185M, Prague, Czech Republic — Business software — Series C
7. OpenWeb — $170M, Tel Aviv, Israel — Social/platform software — Series F
8. PragmatIC — $158M, Cambridge, UK — Semiconductors — Series C 7
9. Oda — $154.6M, Oslo, Norway — Retail — Late-stage VC
10. Pulmocide — $147.5M, London, UK — Drug discovery — Series C

Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31,
2022. Data provided by PitchBook, January 18, 2023
#Q4VC
71
Global | US | Americas | Europe Asia
#Q4VC
72
VC investment in Asia held relatively steady in Q4’22, driven by several large megadeals in China, including a $2.56 billion raise by new energy vehicle
company GAC Aion, a $1 billion raise by fast-fashion e-commerce platform SHEIN and a $631 million raise by SPIC Hydrogen Energy.
IPO activity remains soft in Hong Kong and Japan, strong in mainland China Energy and EV companies highly attractive to VC investors in China and Japan
IPO activity in Hong Kong (SAR) and Japan remained slow in Q4’22, bringing an end to a Following on trends seen earlier in 2022, VC investors in China continued to pour money into EV
lacklustre year for IPO exits. In Hong Kong (SAR), the industrials and EV related sectors showed and new energy companies during Q4’22. In addition to the $2.56 million raise by GAC Aion,
the most resilience compared to other sectors making up 7 of the top 10 IPOs in Hong Kong Voyah Car Technology raised $631 million, SPIC Hydrogen Energy raised $631 million, BYVIN
(SAR), but still saw a decline in IPO value. Among the IPOs that occurred in Japan over the Auto raised $444 million, and battery company Hithium raised $280 million.
course of 2023, many resulted in subsequent share price drops.
VC investors in Japan also showed significant interest in the energy and EV spaces. While VC
Relative to most other jurisdictions, the IPO market in China performed remarkably well in investment was quiet during Q4’22, there was a large, for Japan, PE deal during the quarter: a
2022 — with IPO activity and value comparable to 2021. Globally, Shanghai and Shenzhen $136.8 million investment by CPDQ into Shizen Energy Group. Japan’s energy and EV sector
were the top two fundraising exchanges globally this year, highlighting the uniqueness of ecosystems have also continued to evolve, with a strong stable of early-stage startups expected
China’s public markets compared to other, more integrated, global markets. The resolution to grow and attract larger funding rounds over time.
of the PCAOB audit inspection challenges related to China-based companies listed in the
US could see larger, global-focused companies in China considering US IPOs in 2023, VC investment in India subdued in Q4’22, but long-term outlook positive
although whether US IPOs will materialize will be dependent on market attractiveness VC investment in India remained slow quarter-over-quarter as VC investors, primarily investors
and price. from the US, continued to take a wait-and-see approach given global macroeconomic
China eases COVID-19 policy — bodes well for 2023 uncertainties. The largest VC deal in India during Q4’22, was a $370 million raise by B2B
ecommerce platform Udaan, followed by a $110 million raise by B2B payments company Progap.
VC investment in China was relatively consistent to previous quarters in Q4’22, with VC While VC was relatively sluggish, PE activity remained high in India during Q4’22, highlighting the
investors taking a conservative approach to funding. At the end of Q4’22, however, China’s ongoing attractiveness of India’s startup economy.
central government eased its stringent COVID-19 restrictions in mainland China considerably.
While this has led to a sharp increase in COVID cases, the policy changes are expected to spark VC investment was soft in both fintech and edtech during Q4’22, likely accounting for the low VC
additional economic activity and VC investment over time as travel and face-to-face dealmaking investment total given these sectors typically account for most of India’s largest funding rounds.
become easier. VC investment will likely remain relatively soft in Q1’23 as China deals with the VC investment in the unified payments solutions dried up considerably; while VC investors
new COVID-19 wave, but there is strong optimism that investment will grow heading into Q2’23. continued to invest in fintech areas like microlending and B2B payments, deal sizes were much
The relaxation of mainland China’s COVID-19 restrictions could also spark additional activity in smaller. Following on the Udaan raise, the B2B logistics and delivery is expected to see
Hong Kong. increasing interest over the next few quarters.
#Q4VC
73
Volume of Seed and Series A deals remains solid in Japan Trends to watch for in Q1’23
VC investment was soft in Japan during Q4’22, although there continued to be a solid amount of 2023 will be very interesting year for VC investment in China, in part due to the loosening of the
deal volume at the Seed and Series A deal stages. Concerns about rising interest rates, the Chinese mainland COVID-19 quarantine rules and restrictions and in part due to indications of
appreciation of the US dollar versus the Yen, and a US — and potentially global — economic potential central government policy changes that could see China becoming more open to cross-
downturn had many VC investors in Japan taking a cautious approach to their investments. In border investors and interactions with other economies.
addition to Electric vehicles, hot areas of investment in Japan during Q4’22 included healthtech,
blockchain, and gaming. VC investment in India is expected to remain soft in Q1’23, before starting to pick up in Q2’23 —
in part due to India’s strong growth and consumption expectations. VC investment in agtech is
Despite the slowdown in VC funding in Q4’22, CVC is not expected to decelerate to a significant expected to grow considerably over the next 12-24 months as startups in the space mature and
degree given the strategic factors driving many corporates to make investments. Given growing attract larger funding rounds.
concerns about IPO results, M&A exits have gained some traction in Japan, with some startups
being bought out by their corporate investors. In Q1’23, the Japanese government is expected to announce a number of programs focused on
encouraging startup growth. This could help spur VC investment and the further maturation of
As crypto comes under global scrutiny, Hong Kong poised to benefit Japan’s VC ecosystem in subsequent quarters.
In the wake of the bankruptcy of Bahamas-based FTX, Hong Kong (SAR) is well positioned to
gain some attention and interest from both crypto-focused startups wanting to gain the
confidence of increasingly skeptical investors and VC investors looking to validate investment
opportunities. In early 2022, Hong Kong (SAR) introduced a new licensing and regulatory regime
to regulate virtual asset service providers; it is also in the process of finalizing a licensing regime
for virtual asset service providers, which is expected to come into force on June 1, 2023.
#Q4VC
74
“
Venture financing in Asia
2015–Q4'22
Overall venture capital
VC invested remained relatively healthy,
$80 4,500 especially in the broader context of historical investment in China slowed
tallies, in the final quarter of 2022. However, considerably in 2022,
4,000 as completed financing volume continued to following similar patterns to
$70
slide, it is clear that 2022 in Asia also saw a what we’ve seen in other
marked cooling in the venture environment countries in Asia and across
3,500
$60 thanks to similar factors remarked upon the world. However, in spite
earlier. In addition, domestic retrenching by of this decline, several new
3,000 protective governments is playing a distinct
$50
age sectors ranging from
role in encouraging sector-specific
investment..
alternative energy to the
2,500
electric vehicle ecosystem
$40
continued to draw
2,000 significant investor
$30 attention, as reflected in a
1,500 series of mega-deals
”
closing out the year.
$20
1,000
$10 500
$13.7
$12.6
$27.9
$13.5
$22.3
$29.2
$17.7
$16.3
$14.2
$19.9
$25.4
$24.5
$34.9
$51.4
$33.5
$24.1
$19.5
$36.0
$38.8
$24.9
$23.9
$32.0
$47.3
$42.8
$45.2
$63.3
$69.6
$43.9
$31.2
$30.4
$22.6
$36.5
$0 0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
2015 2016 2017 2018 2019 2020 2021 2022
Egidio Zarrella
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth Partner, Clients and Innovation
KPMG China
#Q4VC
75
Median deal size ($M) by stage in Asia Up, flat or down rounds in Asia
2015–2022* 2015–2022*
$70 100%
90%
$60
80%
$50 70%
60%
$40
50%
$30
$24.5 40%
30%
$20
20%
$10 $10.0
10%
$5.1
$1.1 0%
$0
2015
2016
2017
2018
2019
2020
2021
2022*
2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
76
Median deal size ($M) by series in Asia

2015–2022*
$90
$80
$70
$60
$50 $50.2
$40
$30
$27.8
$20
$15.7
$10
$7.5
$1.2
$0 $0.4
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
#Q4VC
77
Median pre-money valuation ($M) by series in Asia

2015–2022*
$800
$700
$600
$565.6
$500
$400
$300
$200
$136.7
$100
$66.1
$22.3
$0 $4.3
$1.8
2015 2016 2017 2018 2019 2020 2021 2022*
Seed Angel A B C D+
#Q4VC
78
Deal share by series in Asia Deal share by series in Asia

10,000 $160
9,000
$140
8,000
$120
7,000
$100
6,000
5,000 $80
4,000
$60
3,000
$40
2,000
$20
1,000
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
79
Asia venture financings by sector Asia venture financings by sector

100% 100%
Transportation
90% 90%
Commercial
Products &
80% Services 80%
Consumer Goods
& Services
70% 70%
Software
60% 60%
Pharma & Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
Supplies
0% 0%
Energy
2015
2016
2017
2018
2019
2020
2021
2022*
2015
2016
2017
2018
2019
2020
2021
2022*
#Q4VC
80
Corporate participation in venture deals in Asia

2015–Q4'22
$50 1,600
$45
1,400
$40
1,200
$35
1,000
$30
$25 800
$20
600
$15
400
$10
200
$5
$18.2
$13.0
$21.6
$10.8
$17.3
$10.9
$20.6
$38.3
$20.1
$17.8
$12.5
$10.5
$14.4
$23.7
$15.7
$13.2
$18.4
$29.4
$23.8
$22.6
$41.3
$44.2
$26.8
$16.8
$15.2
$14.2
$6.8
$6.1
$6.8
$9.5
$9.3
$6.6
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
#Q4VC
81
“
Venture-backed exit activity in Asia
2015–Q4'22
Historically, a lot of the
Unlike elsewhere, exit volume has remained
$200 250 larger fundraising rounds in
choppy yet not terribly low relative to
historical levels, while exit values remain
Hong Kong have been
$180 muted but on the steadier side. This should fintech related. The FTX
ensure a trickle of liquidity back into the situation will likely see
$160 200 ecosystem, over time. That said, it remains to crypto investors pulling
be seen if exits grow choppier over the
back and scrutinizing deals
$140 coming year given the array of challenges
geopolitical issues to capital availability.
more, but this could actually
$120 150
be beneficial for Hong Kong
moving forward as the
$100 government has passed the
new regulatory and
$80 100 licensing regime for virtual
asset service providers to
$60
provide clarity on the
$40 50
regulatory requirements
and better protection to
”
users and investors.
$180.0
$128.2
$118.7
$20
$13.3
$41.0
$16.3
$33.0
$65.3
$11.4
$26.5
$26.5
$25.2
$22.9
$34.5
$55.7
$46.1
$29.1
$29.2
$28.2
$98.2
$47.6
$27.7
$5.4
$9.9
$4.2
$6.8
$4.5
$8.0
$6.7
$8.0
$6.9
$8.2
$0 0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
2015 2016 2017 2018 2019 2020 2021 2022

Irene Chu
Partner & Head of New Economy and
Life Sciences, Hong Kong (SAR)
KPMG China
#Q4VC
82
Venture-backed exit activity (#) by type in Asia Venture-backed exit activity ($B) by type in Asia
2015–2022* 2015–2022*
800 $500
$450
700
$400
600
$350
500
$300
400 $250
$200
300
$150
200
$100
100 $50
0 $0
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*

#Q4VC
83
Venture fundraising in Asia

2015–2022*
As is confirmed with final data, by now, it is clear that the domestic venture fundraising cycle in
$250 1,600 the region has slid in a systemic fashion for several years now. What remains to be seen is if
this is a cycle more affected by a more diverse set of capital sources than traditional venture
fundraising, or geopolitical tensions around international sources of capital commitments, or
1,400
some other factor.
$200
1,200 The fundraising cycle ended the year on a down note,
1,000
but now it remains to be seen how this
$150
systemic cycle plays affects on startup
800 financing down the line…
$100
600
400
$50
200
$114.7
$119.5
$206.4
$142.6
$102.7
$87.8
$94.1
$52.9
$0 0
2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
84
Venture fundraising (#) by size in Asia First-time vs. follow-on venture funds (#) in Asia
2015–2022* 2015–2022*
100%
1,600
90%
1,400
80%
1,200
70%
1,000 60%
800 50%
40%
600
30%
400
20%
200
10%
0 0%
2015 2016 2017 2018 2019 2020 2021 2022* 2015 2016 2017 2018 2019 2020 2021 2022*
#Q4VC
85
“
Venture financing in India
2015–Q4'22
There’s so much
$18 800 entrepreneurship in India and
investors see this. A lot have
$16 700 been betting on microfunds as
a way to get their feet on the
$14 ground to identify diamonds
600
early — and this has really
$12
500 worked well for some larger
VC funds. Given the dollar
$10
400
values involved, microfunds
$8 are also easier to raise.
300
Heading into 2023, there’s no
$6 doubt microfunds are here to
stay. They’ll be what helps
200
$4 incubate very early stage
companies and get them to
”
$2 100
that next level.
$16.2
$12.4
$1.7
$5.0
$1.8
$2.5
$4.1
$1.9
$0.9
$1.4
$1.0
$2.4
$2.2
$5.8
$2.2
$2.8
$1.7
$2.5
$2.9
$3.0
$3.4
$6.6
$3.2
$1.9
$4.5
$5.4
$3.9
$5.6
$9.6
$8.0
$3.0
$2.9
.
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Nitish Poddar
Partner and National Leader,
Private Equity
KPMG in India
#Q4VC
86
“
Venture financing in China
2015–Q4'22
China’s central government is
$50 2,500 very keen on boosting the
economy. There seems to be
$45 a real change in mindset,
which is going to make 2023
$40 2,000
a very interesting year.
$35 Investment will likely remain
cautious in Q1’23, but we’ll
$30 1,500 start to see how the lowering
of restrictions changes the
$25
investment climate, whether
$20 1,000 and how government policies
change, and the areas where
$15 cross border investment
comes up again. The real
$10 500
impact, however, will be seen
”
$5
in Q2’23 and beyond.
$10.7
$21.8
$10.0
$19.0
$27.0
$13.8
$13.8
$14.9
$14.3
$19.9
$25.0
$43.9
$25.5
$16.9
$12.1
$26.1
$21.1
$13.7
$17.1
$22.2
$35.8
$28.7
$25.6
$33.9
$20.9
$13.2
$18.8
$13.9
$26.4
$40.3
$9.3
$9.7
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Zoe Shi
Partner
KPMG China
#Q4VC
87
“
Venture financing in Australia
2015–Q4'22
It was another strong year for
$3,000 250 VC investment in Australia.
Despite the economic cooldown,
deal value was on par with 2021,
$2,500 but the volume of deals has
200
decreased. This shows that dry
powder is still being deployed —
$2,000
what’s changing is the way it’s
150
being invested. As we move into
$1,500 2023, VCs are increasingly
looking for startups that are
100 efficient, responsible with capital,
$1,000 and focused on revenue. When
they find them, they’re willing to
invest just as much as they have
”
50
$500
before, if not more.
$1,248.9
$2,102.5
$2,384.7
$1,306.3
$1,463.6
$1,519.4
$128.5
$122.1
$137.3
$227.0
$137.2
$258.4
$181.9
$135.0
$191.8
$255.8
$172.3
$297.1
$548.5
$320.8
$426.5
$533.5
$457.8
$396.1
$496.6
$638.2
$622.1
$585.6
$381.5
$601.6
$855.8
$692.0
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Amanda Price
Head of High Growth Ventures,
KPMG in Australia
#Q4VC
88
“
Venture financing in Japan
2015–Q4'22
Despite global macroeconomic
$2,500 400 trends, the prospects for large
corporates to invest are still
350 very strong in Japan, so the
$2,000
deceleration of CVC investment
300 has been very limited compared
to the slowdown in investment
250 from other investors.
$1,500
Corporates also remain a key
200 driver of exit activity given the
significant focus on open
$1,000
150
innovation here. Many startups
are eventually bought out by
100
their corporate investors — a
trend that will likely continue
”
$500
heading into 2023.
$1,026.0
$1,068.7
$1,017.7
$1,361.1
$1,151.6
$1,183.1
$1,383.9
$1,398.3
$1,975.0
$1,984.4
$1,565.6
$1,469.4
$1,737.8
$1,624.4
$1,133.3
$1,158.8
50
$229.0
$231.2
$203.0
$577.5
$495.2
$232.1
$342.3
$782.6
$356.5
$621.7
$537.1
$811.5
$566.0
$964.2
$933.6
$569.1
$0 0
2015 2016 2017 2018 2019 2020 2021 2022
Hiroshi Abe
Executive Board Member,
Partner
KPMG in Japan
#Q4VC
89
Top 10 financings in Q4'22 in Asia-Pacific
5 1. GAC Aion — $2.6B, Guangzhou, China — Automotive — Series A

3 8 6
2 2. SHEIN — $1B, Nanjing, China — Retail — Series F
1
3. SPIC Hydrogen Energy — $631M, Beijing, China — Cleantech — Series B
4
9 4. Voyah Car Technology — $630.8M, Wuhan, China — Cleantech — Series A
5. ESWIN Material — $562.1M, Xi’an, China — Semiconductors— Series C

10
6. Fei Hong Technology — $537.5M, Beijing, China — Robotics — Early-stage VC
7. BYVIN Auto — $444.5M, Weifang, China — Automotive — Series A
8. toss — $405M, Seoul, South Korea — Fintech — Series G
9. Udaan — $370M, Bengaluru, India — Business software — Late-stage VC
10. Amber Group — $300M, Singapore — Fintech — Series C
Source: Venture Pulse, Q4’22, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of December 31, 2022.
Data provided by PitchBook, January 18, 2023
#Q4VC
90
Global | US | Americas | Europe | Asia
From seed to speed, we’re here throughout your journey
Contact us:
Netherlands
Denmark
Germany
Sweden
Iceland Finland
Canada Norway Estonia
UK Latvia
Ireland Lithuania
Channel Islands Poland
Czech Republic
Conor Moore
Luxembourg Slovakia Head of KPMG Private Enterprise in the
France Americas,
Switzerland Ukraine China
US Romania South Korea Global Leader, Emerging Giants, KPMG
Portugal
Bermuda Turkey Japan Private Enterprise, KPMG International &
Spain Bangladesh Partner, KPMG in the US
Italy Greece Israel Taiwan
Mexico Austria Malta Cyprus (Jurisdiction)
Tunisia
India Hong Kong (SAR), China
Venezuela
Cambodia Vietnam
South Africa
Singapore
Peru Lindsay Hull
Brazil Senior Director, Emerging Giants
Global Network, KPMG Private
Enterprise, KPMG International
Chile Australia
Uruguay
New Zealand
#Q4VC
91
About KPMG Private Enterprise

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dedicated to working with you and your business, no matter where you are in your growth journey — whether you’re looking to reach new
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KPMG’s global resources through a single point of contact — a trusted adviser to your company. It is a local touch with a global reach.
KPMG Private Enterprise’s global network for emerging giants has extensive knowledge and experience working with the startup ecosystem.
Whether you are looking to establish your operations, raise capital, expand abroad, or simply comply with regulatory requirements — we can
help. From seed to speed, we’re here throughout your journey.
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#Q4VC
92
Acknowledgements
We acknowledge the contribution of the following individuals who assisted in the development of this publication:
• Jonathan Lavender, Global Head, KPMG Private Enterprise, KPMG International • Jussi Paski, Head of Startup Services, KPMG in Finland
• Conor Moore, Head of KPMG Private Enterprise in the Americas, Global Leader, • Lauren Taylor, Fintech Manager, KPMG in the UK
Emerging Giants, KPMG Private Enterprise, KPMG International & Partner, KPMG
• Lindsay Hull, Senior Director, Emerging Giants Global Network, KPMG Private
in the US
Enterprise, KPMG International
• Amanda Price, Head of High Growth Ventures, KPMG in Australia
• Melany Eli, Managing Director, Marketing and Communications, KPMG Private
• Amy Burnett, Head of KPMG Private Enterprise Access, KPMG in the UK Enterprise, KPMG International
• Anna Scally, Partner, Head of Technology & Media & Fintech Lead, KPMG in • Nicole Lowe, Head of Emerging Giants, KPMG in the UK
Ireland
• Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India
• Dr. Ashkan Kalantary, Deal Advisory, M&A GrowthTech & Ventures, KPMG in
• Peter Kehrli, Partner, KPMG in the US
Germany
• Robert Baxter, Head of Corporate Finance, KPMG in the UK
• Dina Pasca-Raz, Head of Technology, Head of International Tax, KPMG in Israel
• Rodrigo Guedes, Managing Director, KPMG in Brazil
• Diogo Garcia Correia, Venture Capital & Emerging Giants Business Development,
KPMG in Brazil • Samuel Lush, Director, Private Equity Group, KPMG in the US
• Hiroshi Abe, Executive Board Member, Partner, KPMG in Japan • Sunil Mistry, Partner, KPMG Private Enterprise, Technology, Media &
Telecommunications (TMT), KPMG in Canada
• Irene Chu, Partner & Head of New Economy and Life Sciences, Hong Kong (SAR)
Region, KPMG China • Tim Dümichen, Partner, KPMG in Germany
• Jonathan Boyers, Partner, Corporate Finance, KPMG in the UK • Warren Middleton, Lead Partner for Emerging Giants, Center of Excellence in the
UK, KPMG in the UK
• Jules Walker, Senior Director, Business Development, KPMG in the US
• Zoe Shi, Partner, KPMG China
#Q4VC
93
Methodology
KPMG uses PitchBook as the provider of venture data for the Venture Pulse report • Angel/seed: PitchBook defines financings as angel rounds if there are no PE or VC firms involved in the company to
date and we cannot determine if any PE or VC firms are participating. In addition, if there is a press release that
Please note that the MESA and Africa regions are NOT broken out in this report. Accordingly, if you add up the Americas, states the round is an angel round, it is classified as such. Finally, if a news story or press release only mentions
Asia-Pacific and Europe regional totals, they will not match the global total, as the global total considers those other regions. individuals making investments in a financing, it is also classified as angel. As for seed, when the investors and/or
Those specific regions were not highlighted in this report due to a paucity of datasets and verifiable trends. press release state that a round is a seed financing, or it is for less than $500,000 and is the first round as reported
by a government filing, it is classified as such. If angels are the only investors, then a round is only marked as seed if
In addition, particularly within the European region, the Venture Pulse does not contain any transactions that are tracked as it is explicitly stated.
private equity growth by PitchBook. As such rounds are often conflated with late-stage venture capital in media coverage,
there can be confusion regarding specific rounds of financing. The key difference is that PitchBook defines a PE growth round • Early-stage: Rounds are generally classified as Series A or B (which we typically aggregate together as early stage)
as a financial investment occurring when a PE investor acquires a minority stake in a privately held corporation. Thus, if the either by the series of stock issued in the financing or, if that information is unavailable, by a series of factors
investor is classified as PE by PitchBook, and it is the sole participant in the recipient company’s financing, then such a round including: the age of the company, prior financing history, company status, participating investors, and more.
will usually be classified as PE growth, and not included in the Venture Pulse datasets. However, as of the Q4 2022 edition, a • Late-stage: Rounds are generally classified as Series C or D or later (which we typically aggregate together as late
new stage for venture that was invented by PitchBook to account for growth at late-stage VC will be included, defined as stage) either by the series of stock issued in the financing or, if that information is unavailable, by a series of factors
venture growth. That same edition saw some minor updates to the wording of the methodology on this page. including: the age of the company, prior financing history, company status, participating investors, and more.
Also, if a company is tagged with any PitchBook vertical, excepting manufacturing and infrastructure, it is kept. Otherwise, the • Growth: Financings tagged as Series E or later or deals involving companies that are at least seven years old and
following industries are excluded from growth equity financing calculations: buildings and property, thrifts and mortgage have raised at least six VC rounds will be included in this category, as of the Q4 2022 edition of Venture Pulse
finance, real estate investment trusts, and oil & gas equipment, utilities, exploration, production and refining. Lastly, the released in January 2023.
company in question must not have had an M&A event, buyout, or IPO completed prior to the round in question. • Corporate: Corporate rounds of funding for currently venture-backed startups that meet the criteria for other
Fundraising PitchBook venture financings are included in the Venture Pulse as of March 2018.
PitchBook defines VC funds as pools of capital raised for the purpose of investing in the equity of startup companies. In • Corporate venture capital: Financings classified as corporate venture capital include rounds that saw both firms
addition to funds raised by traditional VC firms, PitchBook also includes funds raised by any institution with the primary investing via established CVC arms or corporations making equity investments off balance sheets or whatever other
intent stated above. Funds identifying as growthstage vehicles are classified as PE funds and are not included in this non-CVC method is employed.
report. A fund’s location is determined by the country in which the fund’s investment team is based; if that information is Exits
not explicitly known, the HQ country of the fund’s general partner is used. Only funds based in the United States that
have held their final close are included in the fundraising numbers. The entirety of a fund’s committed capital is PitchBook includes the first majority liquidity event for holders of equity securities of venture-backed companies. This
attributed to the year of the final close of the fund. Interim close amounts are not recorded in the year of the interim includes events where there is a public market for the shares (IPO) or the acquisition of majority of the equity by another
close. entity (corporate or financial acquisition). This does not include secondary sales, further sales after the initial liquidity
event, or bankruptcies. M&A value is based on reported or disclosed figures, with no estimation used to assess the value
Deals of transactions for which the actual deal size is unknown. IPO value is based on the premoney valuation of the company
at its IPO price. One slight methodology update is the categorical change from “IPO” to “public listings” to accommodate
PitchBook includes equity investments into startup companies from an outside source. Investment does not necessarily the different ways we track VC-backed companies’ transitions to the public markets. To give readers a fuller picture of
have to be taken from an institutional investor. This can include investment from individual angel investors, angel the companies that go public, this updated grouping includes IPOs, direct listings, and reverse mergers via SPACs.
groups, seed funds, VC firms, corporate venture firms, corporate investors, and institutions, among others. Investments
received as part of an accelerator program are not included; however, if the accelerator continues to invest in follow-on In the edition of the KPMG Venture Pulse covering Q1 2019 and all ensuing, PitchBook’s methodology regarding aggregate
rounds, those further financings are included. All financings are of companies headquartered in the US, with any exit values changed. Instead of utilizing the size of an IPO as the exit value, instead the prevaluation of an IPO, based upon
reference to “ecosystem” defined as the combined statistical area (CSA). PitchBook includes deals that include partial ordinary shares outstanding, was utilized. This has led to a significant change in aggregate exit values in all subsequent
debt and equity. editions yet is more reflective of how the industry views the true size of an exit via public markets. In the edition of the KPMG
Venture Pulse covering Q1 2021 and all ensuing, the IPO exit type was updated to include all types of public listings,
including special purpose acquisition companies (SPACs) and other reverse mergers.
#Q4VC
94
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information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information
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Venture Pulse

• Challenging technical frontiers advancing

Jonathan Lavender #Q4VC

Global median deal size ($M) by series

Global median pre-money valuation ($M) by series

Global deal share by series Global deal share by series

$120 4,000 $80 18,000

3,500 $70 16,000

Global unicorn rounds Global venture-backed exit activity

$80 300 $500 1,200

$40 150 $250 600

Acquisition Buyout Public Listing Acquisition Buyout Public Listing

Global venture fundraising

Under $50M $50M-$100M $100M-$250M $250M-$500M $500M-$1B $1B+ First-time Follow-on

Top 10 global financings in Q4'22

1. GAC Aion — $2.6B, Guangzhou, China — Automotive — Series A

2. Anduril — $1.5B, Costa Mesa, US — Aerospace & defense — Series E

6. Voyah Car Technology — $630.8M, Wuhan, China — Cleantech — Series A

7. Group14 Technologies — $614M, Woodinville, US — Cleantech — Series C

8. ESWIN Material — $562.1M, Xi’an, China — Semiconductors— Series C

9. Fei Hong Technology — $537.5M, Beijing, China — Robotics — Early-stage VC

Venture financing in the US

Note: Figures rounded in some cases for legibility.

Note: Figures rounded in some cases for legibility.

Deal share by series in the US Deal share by series in the US

Venture financing by sector in the US Venture financing by sector in the US

Venture-backed exit activity in the US

After the lofty heights of exits in 2020 and 2021, a potentially

Exit value ($B) Exit count

Capital raised ($B) Fund count

Venture financing in the Americas

5,000 … although figures are still

$10 $10.0 30%

Angel & seed Early VC Later VC Venture growth Up Flat Down

Median deal size ($M) by series in the Americas

Median pre-money valuation ($M) by series in the Americas

100% Transportation 100%

90% Commercial 90%

Deal value ($M) Deal count

Venture financing in Mexico

Deal value ($M) Deal count

Deal value ($M) Deal count Rodrigo Guedes

Top 10 financings in Q4'22 in Americas

5. Form Energy — $450M, Somerville, US — Cleantech — Series E

6. Tryllian — $414.6M, Los Angeles, US — Fintech — Late-stage VC

7. Arctic Wolf — $401M, Eden Prairie, US — Cybersecurity — Late-stage VC

8. Queen of Raw — $400M, New York, US — Fintech — Late-stage VC

9. ServiceTitan — $365M, Glendale, US — Fintech — Series H

10. Cyara — $350M, Redwood City, US — Marketing tech — Series B

Venture financing in Europe

$25 2,500 … the impact of volatility both

Median deal size ($M) by series in Europe

Median pre-money valuation ($M) by series in Europe

Deal share by series in Europe Deal share by series in Europe

European venture financings by sector European venture financings by sector

$18 900 $14 4,500

$16 800 4,000

$10 500 $8 2,500

Venture-backed exit activity in Europe

Capital raised ($B) Fund count

Venture financing in London

Deal value ($B) Deal count

Deal value ($M) Deal count