KPMG Venture Pulse q1 23 Report

Venture Pulse
Q12023
Global analysis of venture funding
April 19, 2023
Welcome message
Welcome to the Q1’23 edition of KPMG Private Enterprise’s In addition to alternative energy, defense-focused companies
Venture Pulse — a quarterly report highlighting the major continued to attract attention. B2B productivity also remained
trends, opportunities, and challenges facing the venture capital front of mind for investors given the growing pressure on You know KPMG. You might not know
market globally and in key jurisdictions around the world. companies to become more efficient and the continuing KPMG Private Enterprise.
challenges of hybrid work. Artificial Intelligence generated the
What a difference a year makes. After reaching a peak of over KPMG Private Enterprise advisers in
most buzz this quarter, if not investment, as the ripples from
$200 billion in Q1’22, global VC investment fell in each KPMG firms around the world are dedicated
OpenAI’s launch of ChatGPT made their way through all
subsequent quarter. In Q1’23, total VC investment globally was to working with you and your business, no
markets. Generative AI will likely be a space to watch for the
well under $60 billion. With the level of uncertainty in the global matter where you are in your growth
rest of 2023.
market intensifying — from increasing interest rates to domestic journey — whether you’re looking to reach
and geopolitical challenges, significant economic concerns, war With no end in sight to the uncertainty in the market, Q2’23 is new heights, embrace technology, plan for
in Ukraine, and concerns about the stability of the global expected to be another tough quarter for VC investment an exit, or manage the transition of wealth
banking system — no region was particularly immune to the globally — although there is some hope for a more positive or your business to the next generation.
shifting market forces. second half of the year, particularly in Asia.
Both startups and corporates continued to batten down the In this quarter’s edition of Venture Pulse, we look at these and a Jonathan Lavender
hatches in Q1’23, prioritizing cost-cutting and operational number of other global and regional trends, including: Global Head
KPMG Private Enterprise
efficiencies and laying off staff in order to reduce their spend. KPMG International
• The strong interest in alterative energy and EV solutions
VC investors also tightened their purse strings, enhancing their
scrutiny of potential deals quite significantly. The alternative • The continued focus on cost-cutting and finding efficiencies
energy and EV sectors were the brightest lights of the quarter, Conor Moore
with companies from these interconnected sectors attracting the • The relative resilience of early-stage deals Head of KPMG Private Enterprise
in the Americas,
largest share of big funding rounds, including Generate ($880.6 • The growing focus on generative AI Global Leader, Emerging Giants,
million), Zeekr ($750 million), Xpansiv ($525 million), KPMG Private Enterprise,
KPMG International & Partner
SolarSpace ($442 million), and EcoCeres ($400 million). We hope you find this edition of Venture Pulse insightful. If you KPMG in the US
would like to discuss any of the results in more detail, please
Funding for pre-seed and Series A deals showed the most contact a KPMG adviser in your area. Lindsay Hull
resilience this quarter as VC investors focused on making Senior Director, Emerging Giants Global
smaller bets on startups with less questionable valuations. Network, KPMG Private Enterprise,
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. #Q1VC
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Contents
Global US
• VC investment slows to $57.3 billion • VC deal value plummets further to $31.7 billion
across 6030 deals across 2217 deals
• Median deal size for series D+ • Median deal size for early series rounds remain
plummets to $47.6 million resilient
• Funding to healthcare and energy • late-stage valuations plummet from $800+ million to
4 19
startups remain more resilient only $250 million
• Corporate VC participation falls for • Exits slide to lowest quarterly tally in years
5th consecutive quarter • LP’s concentrate capital on proven VC funds
• Global venture fundraising stalls
following strong 2022
• Top 10 deals dominated by Fintech
(3) and cleantech (3) startups Asia
• Venture Capital investment falls to
Americas •
$13.5 billion across 1773 deals
Median deal sizes begin to slide —
• VC-backed investment falls to particularly for later rounds
$33.1 billion across 2542 deals • Earlier-stage deals stay surprisingly
34 47 72
• After relative resilience, resilient
dealmaking slides in Canada • First-time fundraising remains more
• VC deal value and volume fall in resilient than other regions
Mexico, mirroring global trends • Chinese companies pull in 8 of the
• Brazil sees slight bump in volume, top 10 deals in Asia
while deal value drops in Q1
• Largest 10 deals in Americas all Europe
come from the United States
• Investment drops again — to $9.8 billion invested on 1533 deals
• VC down-rounds increase as a percentage of all deals
• Median deal size for series D+ drops to $60.5 million
• Median pre-money valuations slide — particularly for later stage rounds
• UK sees overall slowdown despite outlier rounds
• Deal value falls in the Nordics following robust 2022
#Q1VC
© 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
Globally, in Q1’23
VC-backed companies
raised $57.3B across
6,030 deals
#Q1VC
4
Challenging start to the year for VC investment globally

Global VC investment fell to $57 billion in Q1’23 — a particularly low note when compared to the high of $200+ billion seen in the same quarter just one year ago.
A myriad of factors combined to buffet the global VC market, from the protracted war in Ukraine and other geopolitical uncertainties to concerns about the global
banking system following the sudden turbulence seen in Q1’23. Stubbornly high inflation and still-increasing interest rates have also posed their own challenges.
Both VC investment and deal volume decline in major regions as large megadeals Alternative energy companies account for the largest VC deal in every region during Q1’23
disappear
Alternative energy, including electric vehicles, was by far the biggest ticket sector in Q1’23 —
The Americas, Europe, and Asia all saw VC investment decline further in Q1’23 as VC accounting for many of the largest deals of the quarter, including the largest deal in every region.
investors continued to shy away from large, late-stage deals. During the quarter, only one In the Americas, US-based alternative energy infrastructure company Generate raised $880.6
jurisdiction attracted a $1 billion+ megaround. Deal activity on the other end of the spectrum million; in Asia, China-based EV company Zeekr raised $750 million; and in Europe, Germany-
showed far more resilience, with investment and deals activity remaining quite robust for based alternative energy leasing company Enpal raised $228 million.
pre-Seed and Series A deals.
With the war in Ukraine and energy costs being a major contributor to inflation, the focus of
Generative AI comes into the spotlight investors on alternative energy wasn’t surprising. Whether investment will continue to increase or
reach a plateau as Europe becomes more self-reliant will be worth watching, although the sector
In the wake of the immense buzz created by the release of ChatGPT by OpenAI, interest in has attracted quite a diversity of investments — which could keep investment in the space robust
generative AI grew significantly. While this interest will likely take time to translate into for some time.
additional investment, the excitement for the space was quite marked. The large global tech
giants were particularly quick to announce their own generative AI offerings. During Q1’23, Cybersecurity remains top of mind for VC investors
Google announced that it was integrating AI-powered writing features into Google Workspace1,
while Microsoft announced plans to integrate AI into its Microsoft 365 offerings2. Globally, the risks associated with cyber attacks and data breaches continued to evolve and grow
in Q1’23, with no expectation that they will wane at any point in the foreseeable future. As a result,
Generative AI is still very much an emerging area, with applicability across many different the cybersecurity space is expected to remain quite resilient despite the rocky VC market
sectors and customer activities. It is likely that the next few quarters will see an explosion of conditions being experienced by almost every jurisdiction in the world. The US continued to
activity in the space as companies look to transform activities like customer loyalty, marketing attract the largest VC deals in the cybersecurity space; during the quarter, US-based cloud
automation, back-office management, and chatbot type offerings. Some aspects of generative security firms Netskope and Wiz raised $401 million and $300 million respectively, while all-in-one
AI could also however, come under increasing scrutiny due to the possible legal ramifications security firm Aura raised $205 million.
associated with the use of generative AI produced work.
1 https://workspace.google.com/blog/product-announcements/generative-ai
2 https://www.cnbc.com/2023/03/16/microsoft-to-improve-office-365-with-chatgpt-like-generative-ai-tech-.html
#Q1VC
5
Challenging start to the year for VC investment globally, cont’d.

VC investment in consumer retail and real estate hit hard; shakeouts on the horizon Trends to watch for in Q2’23
VC investors continued to shy away from the consumer retail sector in Q1’23. The real estate Globally, VC investment will likely remain soft heading into Q2’23 as VC investors across
sector also took a hit given the impact of high interest rates on the real estate market more jurisdictions continue to show caution given the significant degree of uncertainty in the market.
broadly. If VC investment remains focused elsewhere, hard hit sectors could see both Investment in consumer retail and D2C companies will likely remain very dry. Alternative energy
traditional companies and startups beginning to fail — or being pressured by their investors to and greentech, defense, cybersecurity, and B2B services will likely be the most resilient areas of
sell in order to avoid failure. Given the robust funding environment of the last couple of years, investment globally, while generative AI could see a spike in investment given the strong spotlight
this shakeout of the market could separate out the winners in the harder hit industries in shone on the space in Q1’23. Longer term, drone technologies could also see strengthening
different regions, with only the best companies managing to weather the storm while others fall interest and VC investment — not only in the defense and logistics spaces, but also in emerging
by the wayside. areas like agtech.
IPO window could stay closed through the end of the year; Asia may be the exception VC investors have become more comfortable investing in developing nations over the past few
years — with areas like South America, Latin America, and Africa increasingly attracting funding.
The IPO window remained firmly shut in Q1’23, with very little indication that a reopening will be While these regions many not be a priority for investment in the short term, they will likely
on the horizon within the next few months. Investor sentiment, particularly in the Americas and continue to grow on the radar of VC investors long term.
Europe suggests that the IPO window won’t open until late in the year or, quite possibly, not
until 2024. Given their unique position globally, China and Hong Kong could be the exceptions.
While Q1’23 saw IPO activity decline in both cases, there is some positive sentiment that
regulatory changes in both locations could spark some renewed interest. This is particularly true
with respect to the new 18C listing rules in Hong Kong — which make it easier for companies
focused on next gen technologies, advanced hardware and software, new energy solutions, and
agritech to list on the HKSE3.
3 https://www.mayerbrown.com/en/perspectives-events/publications/2023/03/hong-kongs-new-listing-regime-for-specialist-technology-companies-takes-effect-on-31-march-2023
#Q1VC
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Venture investment continues to face significant headwinds
“
Global venture financing
2015–Q1'23 There are so many things
The first quarter of 2023 recorded an even happening at once right now that
$250 16,000
steeper downturn in the volume of venture it’s difficult to even try to predict
financing worldwide, across all stages. where the world is going. It’s not
14,000 Although the downturn has been ongoing for only the geopolitical challenges.
some time now, markets and players are still It’s also the way the world reacted
$200
grappling with assessing overall conditions to those, to rising gas prices, and
12,000
and various factors, which has led to a lack to the impact of inflation on
of resolution thus far. Key challenges still everything. For the VC market,
10,000 include:
$150 the rise in interest rates is also an
• Any further economic slowing to the point enormous factor. Cash is quickly
8,000 of recession in the US and the UK, and becoming more expensive.
any other economic slowdowns in Heading into the second quarter
$100 emerging economies such as China and the strong interest in alternative
6,000
India energy, EV solutions and the
”
• The ongoing ramifications of international growing focus on generative AI
4,000
tensions, especially as they pertain to will be areas to watch.
$50
trade and collaboration
$100.5 2,000
$113.2
$158.7
$177.6
$194.0
$210.7
$177.6
$151.7
$104.0
$41.4
$40.9
$57.4
$40.8
$51.0
$62.5
$42.3
$40.4
$39.3
$53.3
$59.3
$58.7
$79.3
$94.9
$78.5
$99.8
$79.5
$72.8
$89.3
$86.2
$78.2
$76.4
$86.0
$57.3
• Volatility in financial markets leading to an
unwelcoming climate for public listings
$0 0
Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 • Changes in regulations and other policies
2015 2016 2017 2018 2019 2020 2021 2022 2023 that could impede cross-border
dealmaking or complexify M&A
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth Jonathan Lavender
Global Head
KPMG Private Enterprise
KPMG International
Source: Venture Pulse, Q1'23. Global Analysis of Venture Funding, KPMG Private Enterprise. Data provided by PitchBook, April 19, 2023
#Q1VC
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Financing metrics begin to show impact of caution

Global median deal size ($M) by stage Global up, flat or down rounds
2015–2023* 2015–2023*
$30 100%
90%
$25 Up
80%
70%
$20
60%
$13.8
$15 50%
Flat
40%
$10
30%
$6.0
$5 20%
$4.4
10% Down
$1.5
$0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Angel & seed Early VC Later VC Venture growth
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023
#Q1VC
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The latest stages continue to see the greatest impact

Global median deal size ($M) by series
2015–2023*
$120
$100
$80
$60
$47.6
$40
$34.0
$20 $20.00
$9.2
$0.3
$0 $2.1
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
#Q1VC
9
Some earlier-stage metrics remain somewhat healthier

Global median pre-money valuation ($M) by series
2015–2023*
$1,000
$900
$800
$700
$600
$500
$400 $394.3
$300
$200
$143.0
$100
$68.3
$28.1
$0 $2.6 $9.1
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
#Q1VC
10
Investors retreat from the riskier stages

Global deal share by series Global deal share by series
2015–2023*, number of closed deals 2015–2023*, 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 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
Series D+ Series C Series B Series A Angel & seed Series D+ Series C Series B Series A Angel & seed
#Q1VC
11
Healthcare & energy see gradual increases
“
Global financing trends to VC-backed companies by sector Global financing trends to VC-backed companies by sector
Generative AI is a hugely
100% 100% exciting space. More and more
Transportation companies are launching with
various offerings so I would
90% 90%
Commercial expect increased investment in
Products & the space and the development
80% Services 80%
Consumer
of a robust ecosystem for how
Goods & to use generative AI for good.
70% Services 70% At the same time, we’re also
Software
going to see a lot of focus on
60% 60% the more concerning facets of
Pharma & generative AI including both
Biotech legal and ethical. It’ll definitely
50% 50%
Other be an interesting space to
watch over the next few
”
40% 40%
quarters.
Media
30% 30%
IT Hardware
20% 20%
HC Services &
10% Systems 10%
HC Devices &
0% Supplies 0% Conor Moore
Head of KPMG Private Enterprise
2023*
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2015
2016
2017
2018
2019
2020
2021
2022
Energy in the Americas,

Global Leader, Emerging Giants,
KPMG Private Enterprise,
KPMG International & Partner
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 KPMG in the US
#Q1VC
12
Corporates & first-time deal flow pull back as well

Corporate VC participation in global venture deals Global first-time venture financings of companies
2015–Q1'23 2015–2023*
$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
4,000
$20
500 1,906
$105.8
$110.7
$17.9
$18.3
$30.9
$17.6
$26.3
$39.7
$19.7
$18.9
$16.1
$25.2
$30.7
$24.4
$39.2
$59.7
$41.8
$50.5
$35.1
$33.4
$38.3
$42.9
$41.3
$39.7
$52.0
$57.5
$81.4
$82.6
$88.1
$75.1
$50.6
$42.1
$22.8
$10 2,000
$30.0
$28.1
$25.7
$37.5
$33.8
$37.0
$69.6
$56.0
$5.8
$0 0
$0 0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
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Q1
Q2
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Q1
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Q3
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Q1
Q2
Q3
Q4
Q1
2015 2016 2017 2018 2019 2020 2021 2022 2023*
2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Deal value ($B) Deal count
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 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.
#Q1VC
13
Unicorn rounds diminish as liquidity prospects dim

Global unicorn rounds Global venture-backed exit activity
2015–Q1'23 2015–Q1'23
$80 300 $500 1,200
$70 $450
250 1,000
$400
$60
$350
200 800
$50
$300
$40 150 $250 600
$200
$30
100 400
$150
$20
$100
50 200
$10
$125.5
$112.1
$158.2
$171.9
$239.8
$304.7
$439.2
$302.5
$405.9
$18.5
$12.7
$28.3
$11.8
$17.3
$13.8
$22.0
$28.0
$22.6
$39.6
$21.4
$18.5
$31.9
$25.9
$20.8
$21.1
$30.8
$33.8
$55.8
$64.2
$70.3
$69.2
$50.5
$44.8
$18.6
$18.8
$11.9
$23.8
$37.1
$32.3
$46.0
$26.9
$30.0
$69.3
$23.6
$46.5
$39.4
$37.1
$72.0
$30.0
$55.8
$65.0
$78.1
$58.4
$45.4
$76.9
$83.9
$73.7
$89.6
$46.4
$20.3
$50
$8.9
$6.7
$8.4
$6.8
$4.0
$4.9
$0 0 $0 0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
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Q1
Q2
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Q4
Q1
Q2
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Q1
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Q2
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Q1
2015 2016 2017 2018 2019 2020 2021 2022 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Exit value ($B) Exit count
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook,
April 19, 2023 April 19, 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 Note: Exit value for initial public offerings is based on pre-IPO valuation, not the size of the offering itself.
first-time unicorn financing rounds, but also include further rounds raised by existing unicorns that maintain at least that valuation of $1 billion or more.
#Q1VC
14
M&A remains most prolific route in sluggish first quarter

Global venture-backed exit activity (#) by type Global venture-backed exit activity ($B) by type
2015–2023* 2015–2023*
4,500 $1,600
4,000 $1,400
Public listing Public
listing
3,500
$1,200
3,000
$1,000
2,500
$800 Buyout
Buyout
2,000
$600
1,500
$400
1,000
500 Acquisition $200 Acquisition
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
15
After an exceptional period, a slowdown

Global venture fundraising
2015–2023*
The denominator effect of the 2010s has transformed into the
$350 3,500 numerator effect of the 2020s, wherein equities’ decline has
led to the need to rightsize private market allocations at the
portfolio level among institutional managers. That, and
$300 3,000
remaining concerns around venture’s outperformance as an
asset class persisting plus current volatility, have led to a
$250 2,500 slowdown in the pace of commitments worldwide.
The start of 2023 saw a significant

$200 2,000
slowdown in sums committed while the
$150 1,500 volume of completed fundraises
continued its cooling, with just over
$100 1,000
$20 billion committed to the
$50 500
asset class.
$147.0
$191.3
$210.3
$326.8
$268.4
$241.5
$308.4
$280.9
$20.5
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Capital raised ($B) Fund count
#Q1VC
16
Follow-on funds remain more popular while $1B+ vehicles disappear

Global venture fundraising (#) by size Global first-time vs. follow-on venture funds (#)
2015–2023* 2015–2023*
3,000 100%
Under $50M
90%
2,500
80%
$50M-$100M
70%
2,000
$100M- 60%
$250M
1,500 50%
$250M- 40%
$500M
1,000
30%
$500M-$1B
20%
500
10%
$1B+
0 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 Follow-on First-time
#Q1VC
17
Cleantech & fintech remain popular

Top 10 global financings in Q1'23
1. Stripe — $6.5B, San Francisco, US — Fintech — Series I
2. Generate — $880.6M, San Francisco, US — Cleantech — Late-stage VC
3. Zeekr — $750M, Ningbo, China — Mobility tech — Series A

5 8
2 4. Zwift — $620M, Long Beach, US — Specialty retail — Late-stage VC
1
6 3
7 5. Abound — $602M, London, UK — Fintech — Early-stage VC
4
9
10
6. Xpansiv — $525M, San Francisco, US — Fintech — Late-stage VC
7. PhonePe — $445.6M, Bengaluru, India — Mobile/fintech — Late-stage VC
8. SolarSpace — $442M, Xuzhou, China — Cleantech — Series B
9. Netskope — $401M, Santa Clara, US — Cybersecurity — Late-stage VC

Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise.
*As of March 31, 2023. Data provided by PitchBook, April 19, 2023
10. EcoCeres — $400M, Hong Kong — Cleantech — Series B
#Q1VC
18
Global US Americas | Europe | Asia
In Q1’23, USVC-backed
companies raised
$31.7B across
2,217deals
#Q1VC
19
Market challenges stifle VC investment in the US in Q1’23

VC investment in the US remained very subdued for the third consecutive quarter, falling from $40,75 billion in Q4’22 to $31.7 billion in Q1’23. The decline was driven by a
number of factors, including the protracted geopolitical uncertainty globally, the continued rise in interest rates, the ripples caused by the FTX bankruptcy and other
crypto sector challenges in 2022, ongoing concerns about tech sector valuations, and the recent turbulence experienced by the global banking system.
Q1’23 VC investment in the US less than half the amount seen in Q1’22 Startups working to maximize efficiencies, negotiate bridge funding
Given the significant amount of uncertainty in the market both in the US and globally, it was no During Q1’23, startups of all sizes continued to cut costs and conduct significant layoffs in a bid to
surprise that US-based VC investors continued to pull back from making large deals in Q1’23. conserve cash, maximize operational efficiencies, and extend their financial runway to delay
While the decline in VC investment was relatively modest quarter-over-quarter, the level of VC potential fundraising activities. Startups valued at the $1 billion unicorn threshold were particularly
investment in the US was less than 50 percent of the total amount invested during the same reticent about new funding rounds given concerns about valuation cuts and the potential negative
quarter in 2022. The decline in the total number of VC deals was even more pronounced — impacts associated with losing unicorn status. This led to a spate of inside deals during the
from a peak of 5196 deals in Q1’22 to a low of 2217 in Q1’23. quarter, with companies giving up concessions in order to obtain additional funding to bridge the
gap until market conditions hopefully improve, valuations rebound, and the IPO window reopens.
Alternative energy and greentech attracted some of the largest rounds in Q1’23, including an
$800 million raise by low carbon infrastructure company Generate Capital and a $525 million Defense technologies remain attractive to VC investors in US
raise by carbon and environmental commodities trading company Xpansiv.
Over the past several quarters, defense related technologies gained significant traction among
Despite availability of dry powder, VC investors in US extremely cautious VC investors in the US, with investments going into a wide range of related technologies,
including AI powered defense platforms, autonomous military vehicles, and smart monitoring
While VC investors continued to have a large contingency of dry powder available to them as a technologies. During Q1’23, the sector continued to attract large funding rounds, including a
result of the robust funding environment in the US during 2021 and 2022, Q1’23 saw investors $230 million raise by autonomous drone manufacturer Skydio.
showing significant caution with respect to their investments. Deal speeds slowed significantly
as many VC investors conducted additional due diligence on potential deals in light of current Consumer-focused technology companies continued to bear the brunt of the pullback in VC
market challenges and the ever-changing market conditions. In particular, VC investors investment during Q1’23, although a few companies bucked the trend, including gamification-
enhanced their scrutiny of the valuations of startups looking to attract funding, their profitability, focused online cycling and running platform Zwift — which raised $620 million.
and the long-term sustainability of their business models. VC investors in the US also held off
from supporting first time deals during the quarter, with many focusing primarily on companies
within their existing portfolios.
#Q1VC
20
Market challenges stifle VC investment in the US in Q1’23, cont’d.
IPO door remains shuttered; take private activity strengthens M&A activity remains soft
IPO activity in the US remained effectively dead during Q1’23, with little to suggest an imminent M&A activity remained soft in Q1’23 as potential buyers juggled competing business priorities and
rebound. While a number of companies remained IPO ready, having already filed confidentially concerns about target company valuations. M&A activity is still expected to rebound as valuations
over the past twelve months, these companies have effectively pressed pause on their plans. stabilize, companies in hard-hit sectors run out of cash, and strategic investors look to acquire
Should the market and valuations stabilize, there could be some renewed IPO activity towards companies at more economical valuations.
the end of 2023, although it could take time before a startup is confident enough to lead the way
out the door. Trends to watch for in Q2’23
Health modernization remains strong focus for investors With no end in sight to the current market uncertainty, VC investment in the US is expected to
remain weak heading into Q2’23. Energy, cybersecurity, and defense will likely continue to attract
The COVID-19 pandemic shone a spotlight on the need to modernize the US healthcare sector. investment, while generative AI will likely see investor interest grow significantly. In the wake of
In the post pandemic world, both health system modernization and personalized medicine have the unexpected banking challenges experienced during Q1’23, fintech could also see renewed
continued to attract interest and VC investment, particularly in areas like physician interfaces, interest as startups look to elevate fintech-as-a-function solutions.
practice management, care management, and revenue and billing. During Q1’23, Monogram
Health — a company focused on benefits management and care delivery for patients with
kidney disease — raised $375 million4, while Paradigm — a company focused on improving
the integration of clinical trials into the broader health system in the US — raised $203 million5.
4 https://www.monogramhealth.com/press/monogram-health-closes-375m-growth-capital-raise-to-support-continued-expansion-of-innovative-in-home-kidney-and-polychronic-care-model
5 https://www.beckershospitalreview.com/digital-health/clinical-trial-platform-paradigm-debuts-with-203m-in-funding-dr-stephen-klasko-on-board.html
#Q1VC
21
The first quarter of 2023 sees continuation of slide in the pace of investing
Venture financing in the US
2015–Q1'23
Multiple economic and financial indicators still remain mixed
$100 6,000 as to whether the US is likely to enter a recession in the next
several months, or perhaps even early 2024. That overlying
$90 economic backdrop is just one more factor that is leading to
5,000 significant concern on the part of venture investors right now,
$80 which is why the pace of investing has slowed considerably. In
addition, even though financing metrics are reversing
$70 somewhat for the first time in years, the competitive landscape
4,000
also remains both intense and murky, as incumbents are
$60 holding onto market share especially with the reserves to
spend in a down market, yet regulatory action and the latest in
$50 3,000
tech policies continues to exert ripple effects across the entire
tech landscape, however slowly. Given the array of risks,
$40
investors are pulling back and battening down the hatches to
2,000 the extent they can with their existing portfolio companies.
$30
$20
1,000
$10
$21.4
$21.5
$22.7
$21.1
$21.6
$26.9
$18.8
$16.8
$18.7
$22.8
$25.2
$23.3
$30.7
$32.0
$35.1
$48.7
$40.4
$37.4
$38.3
$33.8
$38.8
$37.8
$48.5
$46.2
$78.8
$83.1
$88.6
$94.7
$81.3
$76.6
$46.8
$40.7
$31.7
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Angel & seed Early VC Later VC Venture growth
#Q1VC
22
Flat rounds nearly double in proportion as metrics drop

Median deal size ($M) by stage in the US Up, flat or down rounds in the US
2015–2023* 2015–2023*
$35 100%
90%
$30
Up
80%
$25
70%
60%
$20
50%
Flat
$15
40%
$10.3
$10 30%
$6.3 20%
$5.6
$5
10% Down
$2.1
$0 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
23
Earlier series remain a bit more resilient
“
Median deal size ($M) by series in the US
2015–2023*
The need for cybersecurity is
never going away. Every day
$120 brings news of new attacks and
that’s just the ones made public.
New attack technologies are
$100 going to keep coming out and
new solutions will continue to be
developed to thwart them.
Cybersecurity definitely has one
$80
of the highest upsides of any
subsector. Another interesting
one that I think will continue to
$60 grow — although it likely has
$54.3 some ebbs and flows ahead —
is the whole area of space
$40 exploration and space related
offerings. It’s a long term play,
$30.0 but I do think it’s a technology
”
$24.0 and investment trend that’s
$20 going to continue.
$10.0
$3.0
$0 $0.2
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The Series D+ figure is based on non-normative sample sizes for 2023 YTD.
Jules Walker
Note: Figures rounded in some cases for legibility. Senior Director
Business Development
KPMG in the US
#Q1VC
24
Valuations plummet at the latest stages
“
Median pre-money valuation ($M) by series in the US
2015–2023*
There’s been a significant drop in
VC fundraising in Q1’23 for
$1,200
certain. And there’s still a lot of
money that needs to be put to
work in existing VC funds and PE
$1,000 funds, so it’s not surprising that
fundraising has fallen off.
Fundraising targets are no longer
$800
oversubscribed — unlike in
previous years. Investors see
debt as a more attractive asset
class given that rates rises are
$600 now baked in. So, we’re seeing a
bit of a flight to assets higher up
the pecking order, and an
$400 increase in the popularity of
$250.0
private credit over riskier equity
”
capital which will be challenging
for VCs.
$200 $135.5
$70.0
$13.00 $30.0
$0 $4.03
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Sam Lush
Director, Private Equity
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The angel and Series
D+ figures for 2023 YTD are based on non-normative sample sizes.
Group
KPMG in the US
Note: Figures rounded in some cases for legibility.
#Q1VC
25
Proportions revert to align more with historical norms, with angel & seed sliding
Deal share by series in the US Deal share by series in the US
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 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
Series D+ Series C Series B Series A Angel & seed Series D+ Series C Series B Series A Angel & seed
#Q1VC
26
Perceived recession-resilient areas continue to draw investment

Venture financing by sector in the US Venture financing by sector in the US
100% Transportation 100%
90% Commercial 90%

Products &
Services
80% Consumer Goods & 80%
Services
70% Software 70%
60% 60%
Pharma & Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems 10%
10%
HC Devices &
0% Supplies 0%
2023*
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2015
2016
2017
2018
2019
2020
2021
2022
Energy
#Q1VC
27
First-timers & corporates pull back in tandem
“
Corporate participation in venture deals in the US First-time venture financings of companies in the US
2015–Q1'23 2015–2023*
One interesting question here
in the US is ‘what will happen
$50 1,200 $30 6,000
with all the newly unemployed
developers, technologists, and
$45
the like?’ Will they start their
1,000 $25 5,000 own companies? Will they
$40
accept lower salaries? Will
$35 they move to some other
800 $20 4,000 location or embrace remote
$30 work? We don’t have the
answer right now, but it could
$25 600 $15 3,000 be quite exciting, particularly if
”
it means a new cohort of
$20 startups appear in 2023.
400
$15 $10 2,000
$10
200
$5 1,000
$5
$11.0
$15.4
$10.4
$13.3
$15.5
$17.1
$26.3
$16.6
$16.0
$16.9
$12.3
$19.8
$18.8
$23.5
$19.9
$38.9
$38.0
$40.7
$44.5
$37.3
$36.5
$21.7
$17.0
$10.4
$9.4
$9.3
$8.9
$9.8
$8.0
$6.6
$6.9
$9.1
$9.8
$15.9
$15.5
$15.1
$25.5
$24.5
$9.5
$9.8
$9.9
$3.0
$0 0
Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 $0 0 Peter Kehrli
2015 2016 2017 2018 2019 2020 2021 2022 2023* Partner
2015 2016 2017 2018 2019 2020 2021 2022 2023 KPMG in the US
#Q1VC
28
Exits slide to lowest quarterly tally in years

Venture-backed exit activity in the US
2015–Q1'23
$300 600
$250 500
$200 400
$150 300
$100 200
$50 100
$128.5
$104.5
$173.3
$267.8
$200.6
$213.0
$12.3
$19.3
$23.7
$22.2
$13.1
$18.7
$22.0
$11.0
$33.3
$20.7
$16.5
$31.7
$19.6
$36.9
$33.3
$38.1
$51.5
$45.1
$24.3
$16.8
$35.6
$86.9
$32.2
$18.0
$16.4
$6.2
$5.7
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Exit value ($B) Exit count
#Q1VC
29
Exit value shrunk to virtually nothing in Q1

Venture-backed exit activity (#) by type in the US Venture-backed exit activity ($B) by type in the US
2015–2023* 2015–2023*
2,500 $900
$800
Public
Public listing
listing
2,000
$700
$600
1,500
$500
Buyout
Buyout
$400
1,000
$300
$200
500
Acquisition
Acquisition $100
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
30
After recent highs, a new slowdown for fundraising

US venture fundraising
2015–2023*
After a record year, fundraising activity finally slowed down in
$180 1,600 the first quarter of 2023. It remains to be seen how the
combined effects of so many negative macro factors across
$160 markets and economies will continue to impact venture
1,400
fundraising, but the sheer heft of commitments in the prior two
years also complicate matters.
$140
1,200
$120
1,000
… as fundraising volume has slowed
$100 drastically, 2023 starts off with
800 just $11.7 billion, back to a
$80
quarterly pace reminiscent
$60
600
of pre-2018.
400
$40
$20 200
$158.5
$170.8
$43.5
$51.0
$45.6
$62.1
$72.5
$91.6
$11.7
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
31
Allocators seek refuge in smaller funds, in quirk of timing

Venture fundraising (#) by size in the US Venture fundraising ($B) by size in the US
2015–2023* 2015–2023*
1,200 $180
Under Under
$50M $50M
$160
1,000
$50M- $140 $50M-

$100M $100M
800 $120
$100M- $100M-
$250M $100 $250M
600
$80
$250M- $250M-
$500M $500M
400 $60
$500M-$1B $40 $500M-$1B

200
$20
$1B+ $1B+
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
32
Capital commitments concentrate in proven players

First-time vs. follow-on funds (#) in the US First-time vs. follow-on funds ($B) in the US
2015–2023* 2015–2023*
100% 100%
90% 90%
80% 80%
Follow-on Follow-on
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% First-time 20% First-time
10% 10%
0% 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
33
Global | US Americas Europe | Asia
In Q1’23, VC-backed
companies in the
Americasraised
$33.1B across
2,542 deals
#Q1VC
34
VC investment in the Americas drops to low not seen since Q4’17

VC investment in the Americas continued to decline in Q1’23 amid deepening concerns about rising interest rates, high levels of inflation, and ongoing geopolitical
challenges. The unexpected turbulence in the global banking sector during the quarter likely also sparked concern among VC investors in the region.
US remains key driver of VC investment in Americas in Q1’23 Canada’s health and biotech sector continues to attract deals
While the US continued to account for the vast majority of VC funding in the Americas this Within Canada, a number of sectors saw significant drops in VC investment during Q1’23,
quarter, the country was not immune to the worsening macroeconomic conditions; both VC including fintech and ecommerce. By comparison, health and biotech showed more resilience,
investment and the number of VC deals in the US declined for the fifth straight quarter in Q1’23. with a variety of companies attracting funding — if at relatively smaller deal sizes. During the
Canada attracted the largest deals outside of the US during Q1’23, including a $125 million quarter, Toronto-based Smile Digital Health raised $30 million, while Westmount-based LAmAb
raise by blockchain-based Bitcoin infrastructure company Blockstream and a $100 million raise and Montreal-based Puzzle Medical Devices raised $25 million each. Interest in the agtech space
by small business-focused operations management company Jobber. VC investment in Latin continued to grow in Canada during Q1’23, although it is still considered a very emerging area of
America was relatively quiet to start the year. Brazil, in particular, saw VC investment drop for investment. During the quarter, Vancouver-based Terramera — a startup focused on removing
the sixth straight quarter, with mobile application delivery company Daki raising the country’s synthetic chemicals from agriculture — raised $7.5 million.
largest round ($50 million) in Q1’23.
Pre-seed and seed deals maintain traction in Brazil
Fundraising activity falls off a cliff in Q1’23
VC investment in Brazil was soft in Q1’23, driven both by global macroeconomic circumstances
After a stellar fundraising environment in 2021 and 2022, fundraising activity by VC firms fell and by uncertainties related to change in government. While large deals were virtually absent in
sharply in the Americas during Q1’23. Despite the drop-off in fundraising, VC firms continued to Brazil this quarter, pre-seed and seed deal activity remained active as VC investors focused on
have a wealth of capital at their fingertips, although the speed at which they deployed this companies with good growth and return potential and that had more realistic valuations
capital slowed considerably during the first quarter of 2023 due to the heightened level of compared to later stage startups. VC investments in Brazil during the quarter were spread out in
market uncertainty and the growing pressure to strengthen their due diligence processes. In a number of sectors, with largest rounds in grocery retail delivery, “green” mobility, healthcare,
contrast to many other jurisdictions, Brazil saw its number of new funds increase in recent financial software and logtech companies. The Web3 gaming space also came into the spotlight
quarters, suggesting that the country, and the Latin American region more broadly, will remain in Brazil for the first time during the quarter thanks to a $6 million raise by blockchain-enabled
attractive to VC investors long-term despite the current slowdown. gaming development company Jungle.
#Q1VC
35
Americas sees VC investment and the number of VC deals slide for the fourth-straight quarter
Corporates increasingly willing to work together Trends to watch for in Q2’23

Corporate VC investment in the Americas fell for the fifth straight quarter in Q1’23 as With the level of uncertainty expected to remain through mid-year, VC investment across the
corporates focused on other priorities, including improving the efficiency of their own Americas will likely remain subdued heading into Q2’23. In the US, energy is expected to remain
operations. While the continued pullback in CVC funding was expected given the changing a big ticket for investors. In Canada, VC deal activity is expected to remain relatively stable
market conditions, corporate activity is expected to remain a key contributor to overall VC quarter-over-quarter, with activity likely to center around small and mid-sized deals rather than on
funding in the region given how many corporates use strategic VC investment to drive their larger deals. In Brazil, startups will likely remain focused on the rationalization of their operations,
R&D activities. teams and costs in Q2’23. M&A activity among Brazil-based startups could also see an increase.
One growing trend seen in recent quarters in the Americas is the willingness of corporates to
pull together to support certain startups given their similar technology needs and requirements.
While competitors historically may have supported different startups, they are now more willing
to buy into the same opportunities. This has led to VC funds being set up to work as the
investment arm of like-minded corporates.
Governments remain supportive of VC investment and ecosystem growth
Governments across the Americas continued to support VC market activity and the evolution
and maturation of tech ecosystems. BNDES, the Brazilian Development Bank participated in
one of the largest funding rounds in the quarter — making it one of the country’s most relevant
investors during 2023. In Canada, the federal government announced $700 million in funding
during Q1’23 to support the growth of identified global innovation clusters in the country,
including advanced manufacturing, protein industries (i.e., plant-based food and feed), digital
technologies, AI, and ocean-focused solutions aimed at improving the health of the planet6.
6 https://www.canada.ca/en/innovation-science-economic-development/news/2023/02/government-of-canada-announces-renewed-funding-for-the-global-innovation-clusters.html
#Q1VC
36
All venture volume continues to decline

Venture financing in the Americas
2015–Q1'23
After softening to levels seen pre-2021 boom, now venture
$120 7,000
dealmaking appears to have plummeted to new lows. Although
those figures may tick up somewhat, activity definitely has
cooled to resemble pre-2018 figures, even, in some measures.
6,000
$100
5,000 … itnow remains to be seen

$80
just how much more
4,000
dealmaking may cool; 2022
$60
saw softening in the pace of
3,000
dealmaking overall, and now
$40
2,000 figures are approaching
pre-2018 levels.
$20
1,000
$102.7
$22.2
$22.5
$23.6
$21.6
$22.3
$27.5
$19.5
$17.7
$19.6
$24.3
$26.5
$24.5
$32.6
$33.8
$36.4
$51.0
$42.1
$40.3
$41.5
$36.2
$41.1
$39.8
$50.9
$48.9
$83.1
$92.7
$98.3
$91.1
$81.7
$49.9
$44.0
$33.1
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
37
Metrics slide while flat rounds proliferate

Median deal size ($M) by stage in the Americas Up, flat or down rounds in the Americas
2015–2023* 2015–2023*
$35 100%
90%
$30
Up
80%
$25
70%
$20 60%
$15 50%
Flat
$10.4
40%
$10
30%
$6.2 $5.7
$5
20%
$2.0
$0 10% Down
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Angel & seed Early VC Later VC Venture growth 0%

2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
38
Earlier financing sizes slide less, likely due to lower inflation rates
Median deal size ($M) by series in the Americas
2015–2023*
$120
$100
$80
$60
$55.0
$40
$30.0
$23.8
$20
$10.0
$2.8
$0 $0.2
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The Series D+ figure is based on non-normative sample sizes for 2023 YTD.
#Q1VC
39
Valuations decline at the highest levels

Median pre-money valuation ($M) by series in the Americas
2015–2023*
$1,200
$1,000
$800
$600
$400
$250.0
$200
$136.0
$70.0
$12.7 $30.0
$0 $3.7
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The angel and Series D+ figures are based on non-normative sample sizes for 2023 YTD.
#Q1VC
40
Riskier stages see proportionate pullback

Deal share by series in the Americas Deal share by series in the Americas
16,000 $350
Series D+ Series D+
14,000
$300
12,000
Series C $250
Series C
10,000
$200
8,000 Series B
Series B
$150
6,000
$100
Series A
4,000 Series A
$50
2,000
Angel & seed

Angel & seed
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
41
Software remains predominant amid mild growth in energy & healthcare

Venture financing of VC-backed companies by sector in the Americas Venture financing of VC-backed companies by sector in the Americas
2015–2023*, # of closed deals 2015–2023*, VC invested ($B)
90% Commercial 90%

Products &
Services
80% Consumer Goods 80%
& Services
70% Software 70%
60% 60%
Pharma & Biotech
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
0% Supplies 0%
2023*
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2015
2016
2017
2018
2019
2020
2021
2022
Energy
#Q1VC
42
After relative resilience, dealmaking finally slides
“
Venture financing in Canada
2015–Q1'23
While I was glad to see a
couple of larger deals earlier in
$6,000 450
this quarter here in Canada, I
think these bigger deals aren’t
400 going to happen as frequently
$5,000 during the rest of 2023 given
350 how much uncertainty is in the
market and how much interest
$4,000 300 rates are rising. Instead, we’re
going to see VC investors
250 focusing on smaller, mid-sized
”
$3,000 deals involving companies that
200 have more trusted valuations.
$2,000 150
100
$1,000 $1,403.6
$1,161.5
$1,151.4
$1,875.1
$1,490.2
$1,405.9
$1,141.2
$1,247.2
$2,680.9
$5,032.9
$2,537.5
$3,186.2
$4,637.1
$2,263.0
$1,649.8
$2,116.8
50
$537.4
$526.9
$529.1
$418.3
$573.9
$469.2
$545.7
$676.7
$335.4
$776.6
$963.2
$895.0
$902.4
$728.2
$927.8
$867.4
$907.3
$0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Ryan Forster
Partner,
2015 2016 2017 2018 2019 2020 2021 2022 2023
KPMG in Canada
Deal value ($M) Deal count
#Q1VC
43
Mexico sees similar downturn in venture activity

Venture financing in Mexico
2015–Q1'23
$1,800 80
$1,600 70
$1,400
60
$1,200
50
$1,000
40
$800
30
$600
20
$400
$1,154.1
$1,624.0
$200 10
$143.9
$320.7
$146.7
$274.5
$203.5
$652.5
$284.8
$570.9
$865.5
$714.8
$270.6
$193.7
$25.7
$32.3
$21.8
$13.4
$54.5
$71.9
$18.3
$26.3
$69.2
$22.6
$13.7
$52.2
$70.5
$56.4
$81.5
$80.1
$52.9
$63.0
$89.7
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
44
Brazil sees slight bump in venture financing volume
“
Venture financing in Brazil
2015–Q1'23
One trend, not only here in
200
Brazil but globally, is that
$3,000
investors are looking for
180 returns right now rather than
high growth. And when you
$2,500
160 look at pre-seed and seed
companies — valuations
140 generally are more realistic
$2,000 and the ticket sizes are
120 usually significantly lower.
When you put these two
$1,500 100 factors together, you see
some good companies with
80 nice profiles of growth versus
$1,000 return. We saw the great
60
”
majority of the Q1 rounds
taking place in these stages.
40
$500
$1,080.6
$2,586.5
$1,954.9
$2,504.2
$2,051.5
$157.9
$275.1
$135.3
$119.2
$124.7
$103.2
$149.2
$239.4
$214.6
$257.0
$460.3
$112.3
$281.9
$978.3
$126.8
$542.9
$368.4
$507.5
$574.9
$874.7
$672.1
$957.7
$992.3
$620.1
$240.7
$163.9
20
$70.0
$85.0
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($M) Deal count Rodrigo Guedes

Managing Director
KPMG in Brazil
#Q1VC
45
Key sectors of cleantech, security & AI hold strong

Top 10 financings in Q1'23 in Americas
1. Stripe — $6.5B, San Francisco, US — Fintech — Series I

7 8
9 2. Generate — $880.6M, San Francisco, US — Cleantech — Late-stage VC
1 2 4 3. Zwift — $620M, Long Beach, US — Specialty retail — Late-stage VC

6
5
3 4. Xpansiv — $525M, San Francisco, US — Fintech — Late-stage VC
10
5. Netskope — $401M, Santa Clara, US — Cybersecurity — Late-stage VC
6. Monogram Health — $375M, Brentwood, US — Healthtech — Series C
7. Adept — $350M, San Francisco, US — AI & ML — Series B
8. ONE — $300M, Novi, US — Cleantech — Series B
9. Wiz — $300M, New York, US — Cybersecurity — Series D
10. Anthropic — $300M, San Francisco, US — AI & ML — Early-stage VC
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31,
2023. Data provided by PitchBook, April 19, 2023
#Q1VC
46
Global | US | Americas Europe Asia
In Q1’23, European
VC-backed companies
raised $9.8B across
1,533deals
#Q1VC
47
VC investment in Europe sinks to four-year low in Q1’23

Both the number of VC deals and the total VC investment in Europe fell for the fourth straight quarter, dropping from $15.7 billion in Q4’22 to $9.8 billion in Q1’23.
The decline was particularly stark when set against the record number of VC deals and VC investment seen during the same quarter in 2022.
Consumer-focused businesses take big hit Governments enhancing supports for startups
Macroeconomic conditions, the ongoing war in Ukraine, high levels of inflation, and sky-high Several government-backed initiatives were initiated in Europe during Q1’23 to support startup
energy costs created a perfect storm of challenges for both companies and consumers in growth. The UK’s budget included £3.5 billion to help the country become a scientific and
Europe. Many D2C businesses that thrived under pandemic conditions found their business technologic superpower, including funding to support next-gen supercomputing and AI research7.
models much less resilient within the current market climate. Several consumer-focused The UK also released a whitepaper on the regulation of AI8. During the quarter, the German
sectors saw VC investors pull back significantly during Q1’23, including ecommerce, BNPL, and government also launched a €1 billion fund to support growth stage deeptech and climatetech
last mile delivery. B2B-focused SaaS and AI companies continued to attract investor interest, in companies9, while the European Investment Bank Group and five EU member states announced
addition to companies focused on Energy, ESG, and mobility. Even in these sectors, however, the European Technology Champions Initiative: a $3.75 billion fund to address funding gaps and
deal sizes dropped compared to recent quarters. support late-stage growth companies in the region10.
VC investors more stringent with portfolio companies Q1’23 VC investment in UK pales compared to Q1’22
VC investors in Europe were increasingly cautious in Q1’23, taking a heavier hand with their After slowing down significantly in Q4’22 as a result of both global issues and an unsettled
portfolio companies — scrutinizing their internal budgets, pressuring them to cut costs and domestic political environment, VC investment in the UK remained subdued in Q1’23, particularly
become more efficient, and holding them accountable to agreed-upon milestones. Over the next compared to Q1’22. A $601 million raise by fintech player Abound (Consumer Finance) was the
couple of quarters, VC investors could begin to pick and choose between their portfolio UK’s largest deal of Q1’23, followed by a $160 million raise by B2B focused fintech the Bank of
companies, pulling back from making follow-on investments in companies they don’t believe London, a $149 million raise by EV automotive company One Moto, and a $140.3 million raise by
can survive. This could spur M&A activity as startups look to sell in order to avoid failing. autonomous vehicle software firm Oxbotica. Carmoola rounded out the largest of deals with a
$126 million series A deal. Business services and energy transition continued to attract significant
attention from VC investors in Q1’23, while interest in consumer retail and real estate remained
dry. Looking forward, B2B technology enablement is likely to remain a key driver of investment,
not only in areas like financial and health services but across every sector imaginable.
7 https://www.gov.uk/government/news/government-commits-up-to-35-billion-to-future-of-tech-and-science
8 https://www.gov.uk/government/news/uk-unveils-world-leading-approach-to-innovation-in-first-artificial-intelligence-white-paper-to-turbocharge-growth
9 https://sifted.eu/articles/germany-1bn-deeptech-climate-fund-news/
10 https://www.eib.org/en/events/european-tech-champions-initiative
#Q1VC
48
VC investment in Europe sinks to four-year low in Q1’23, cont’d.

Investor sentiment in the UK appeared to turn slightly during Q1’23 with some cautious Ireland continues to attract diverse range of investments
positivity that the worst of the market turbulence might be over. While VC investment is
expected to remain soft into Q2’23, there is hope that some renewed activity will be seen in the A diverse range of startups continued to attract VC funding in Ireland during Q1’23, although at
second half of the year. relatively small deal sizes. Arterial closure medical device company Vivasure Medical raised the
largest deal in Ireland during the quarter ($32 million)11, followed by AI-powered digital pathology
Alternative energy remains big ticket in Germany company Deciphex ($16 million), social media tracking and predictions company NewsWhip
($13 million), and cybersecurity firm Siren ($12 million).
VC investment in Germany remained soft relative to historical norms in Q1’23, despite
attracting two of Europe’s largest deals in the quarter, including a $228 million raise by Nordics region has quiet start to the year
alternative energy leasing company Enpal and a $151 million raise by PE investment platform
Moonfare. Corporates in Germany remained active, although they showed far more caution Q1’23 was a very quiet quarter of VC investment in the Nordics. Denmark-based biotech
than in recent quarters — focusing their energy, attention, and investments only on startups company Hemab Therapeutics’ $135 million raise was the largest round of the quarter,
with very clear value. highlighting the growing biotech sector in the region. Other VC deals during Q1’23 were much
smaller — primarily under $20 million — as less International late-stage investments occurred
Alterative energy continued to be a big draw for VC investors in Germany, driven not only by and local investors completed primarily smaller early-stage deals. Given the uncertain geopolitical
regional energy concerns but also by the German government’s decision to shut down its and macroeconomic environment, many late-stage companies in the Nordics have adjusted their
nuclear plants and by the growing focus of domestic automotive companies on new energy plans to defer new equity funding rounds in to late 2023 or 2024.
vehicles.
Trends to watch for in Q2’23
Uncertainty in Israel causing VC investors to hold back
Q2’23 will likely be another challenging quarter for VC investment in Europe, given the unrelenting
VC investment in Israel remained subdued in Q1’23 as both global and domestic amount of uncertainty permeating the market. Traditional VC investors will likely remain cautious,
macroeconomic, and market challenges caused a significant amount of uncertainty. Among the scrutinizing deals carefully to assess whether business models will be resilient, while also putting
companies that attracted investment in Israel this quarter were hypertension-focused medtech more pressure on their portfolio companies to cut costs. Some well-capitalized corporates may
SoniVie ($60 million), subsurface imaging platform Exodigo ($41 million), cloud security start to see the current environment as an opportunity rather than a challenge, particularly when it
company. Sentra ($30 million) and B2B productivity company Titan DXP ($30 million). Given comes to making acquisitions. Non-core carveouts and bolt-on deals could also increase. Should
the uncertain policy environment in Israel, VC investment in the country will likely remain soft market challenges intensify over the next few quarters, governments in Europe could step up their
heading into Q2’23. supports for startups.
11 https://www.gaebler.com/VC-Funding-48E2BE6F-1C03-4750-8207-5B29255A795E-Vivasure-Medical-03-13-2023
#Q1VC
49
VC activity cools further

Venture financing in Europe
2015–Q1'23
After record-breaking highs, venture financing volume has slid
$45 4,000 in both count and VC invested to lows last seen in 2018. It is
important to stress that fact, while also being mindful that
$40 3,500 multiple factors driving caution on the part of investors as well
as concern around the health of growth prospects remain
$35 intact, so it remains to be seen whether or not further cooling
3,000 can be anticipated.
$30
2,500 … the impact of volatility both
$25 economic and political is now
apparent, yet European startup
2,000
$20
1,500 ecosystems have not seen
$15
1,000
cataclysmic declines as of
$10
yet…
$5 500
$10.5
$10.5
$11.6
$12.0
$11.0
$11.4
$11.4
$12.0
$17.0
$17.1
$29.2
$38.8
$30.1
$34.4
$39.0
$34.6
$21.8
$15.7
$5.3
$5.1
$5.8
$5.3
$6.2
$5.0
$4.7
$5.6
$5.7
$7.4
$7.1
$9.5
$8.4
$7.8
$9.8
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
50
Down rounds jump up somewhat

Median deal size ($M) by stage in Europe Up, flat or down rounds in Europe
2015–2023* 2015–2023*
$12 100%
90%
$10.5
$10 Up
80%
70%
$8
60%
$6 50%
Flat
$5.1
40%
$4
30%
$2.5 20%
$2 $1.6
10% Down
$0
0%
2015 2016 2017 2018 2019 2020 2021 2022 2023*
2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
51
Financing metrics begin to show unmistakable decline

Median deal size ($M) by series in Europe
2015–2023*
$160
$140
$120
$100
$80
$60 $60.5
$54.3
$40
$24.7
$20
$9.4
$0 $2.15 $0.6
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The Series C and D+ figures for 2023 YTD are based on non-normative sample sizes.
#Q1VC
52
Valuations begin to slide at the highest level

Median pre-money valuation ($M) by series in Europe
2015-2023*
$1,200
$1,000
$800 $735.9
$600
$450.0
$400
$200
$43.8
$4.9 $26.91
$0 $3.9
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The figures for Series D or later valuations in 2015 and 2023 to date are based on non-normative sample sizes. Q1 2023 figures for Series B and C are also based on
non-normative sample sizes.
#Q1VC
53
Relative proportions revert to normalcy

Deal share by series in Europe Deal share by series in Europe
8,000 $100
Series D+ Series D+
7,000 $90
$80
6,000
Series C $70 Series C
5,000
$60
4,000 $50
Series B Series B
$40
3,000
$30
Series A Series A
2,000
$20
1,000
$10
Angel & seed Angel & seed
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
54
Healthcare shows some resilience

European venture financings by sector European venture financings by sector
90% Commercial 90%

Products & Services
80% Consumer Goods & 80%
Services
70% Software 70%
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
2023*
2023*
2015
2016
2017
2018
2019
2020
2021
2022
2015
2016
2017
2018
2019
2020
2021
2022
#Q1VC
55
First-time financiers & corporates press pause

Corporate VC participation in venture deals in Europe First-time venture financings of companies in Europe
2015–Q1'23 2015–2023*
$18 900 $14 5,000
$16 800 4,500

$12
$14 700 4,000
$10 3,500
$12 600
3,000
$10 500 $8
2,500
$8 400
$6
2,000
$6 300
$4 1,500
$4 200
1,000
$2
$2 100 500
$12.2
$14.0
$17.0
$14.0
$14.7
$16.7
$16.5
$10.3
$3.1
$3.1
$4.0
$5.0
$4.3
$4.6
$7.9
$1.2
$2.2
$1.5
$1.6
$2.8
$2.2
$1.8
$2.0
$1.9
$3.1
$2.2
$2.8
$3.5
$3.3
$3.6
$4.3
$4.1
$5.4
$5.2
$4.0
$4.4
$6.3
$8.1
$7.7
$7.6
$4.0
$0.9
$0 0 $0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023*
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
Q1
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
56
Exit volume continues to diminish as value remains very low

Venture-backed exit activity in Europe
2015–Q1'23
Exits remained significantly sluggish in Q1, thanks to ongoing
$80 400
volatility and concerns around broader economic growth
prospects going forward. As of yet, it remains to be seen if
$70 350 things will cool even further.
$60 300
… after a strong stretch for exit
$50 250
value, a clear slowdown is
$40 200
evident, while prospects
$30 150 remain murky.
$20 100
$10 50
$38.7
$12.7
$11.1
$10.8
$34.7
$31.7
$66.7
$29.5
$15.8
$16.6
$5.8
$5.2
$4.1
$8.2
$6.8
$6.5
$4.2
$2.6
$5.3
$7.5
$3.4
$4.3
$1.9
$5.5
$3.3
$2.6
$5.2
$8.5
$1.8
$5.5
$3.4
$5.2
$1.8
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Exit value ($B) Exit count
#Q1VC
57
M&A remains primary avenue in a moribund market

Venture-backed exit activity (#) by type in Europe Venture-backed exit activity ($B) by type in Europe
2015–2023* 2015–2023*
1,400 $180
$160
1,200
Public listing Public listing
$140
1,000
$120
800
$100
Buyout Buyout
$80
600
$60
400
$40
200
$20 Acquisition
Acquisition
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
58
Fundraising finally takes a blow
“
European venture fundraising
2015–2023*
We’re seeing some boldness
After a record-breaking stretch for capital creeping into the corporate world.
$35 400 committed, the slowdown has finally hit the The larger corporates, having
European continent, with the pace of navigated the multiple challenges of
350 commitments slowing dramatically and total COVID, perceive the current
$30 capital pledged on pace for tallies similar in environment as relatively benign —
2015. although an inflationary environment
300 is not plain sailing, through the
$25 pandemic many corporates
strengthened their balance sheets
... at $3.7 billion, 2023 is

250 and changed their operating
$20 models — they now feel more
200
off to a slow start, although in confident about themselves, if not
the economy overall. On the other
$15
the direct wake of significant hand with institutional investors
constrained by the availability of
150 recent tallies. credit and more fearful of the
investment environment, could it be
$10
100
a buyers’ market for corporates right
now? Any corporate boldness will
not be enough to make up for the
$3.7
”
$5 reduced participation of private
50
equity, but it is very interesting.
$12.8
$18.8
$25.3
$19.9
$24.2
$29.0
$30.9
$28.8
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 Robert Baxter
Head of Corporate Finance
KPMG in the UK
#Q1VC
59
Allocators seek refuge in follow-on, experienced managers

Venture fundraising (#) by size in Europe First-time vs. follow-on venture funds (#) in Europe
2015–2023* 2015–2023*
300 100%
Under $50M
90%
250
80%
$50M-
$100M Follow-on
70%
200
$100M- 60%
$250M
150 50%
$250M- 40%
$500M
100
30%
$500M-$1B
20% First-time
50
10%
$1B+
0 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
60
UK sees slowdown even amid some outlier rounds
“
Venture financing in the United Kingdom
2015–Q1'23
The end of 2021 and into
early 2022 was really an
$16 1,200
outlier period. Now, we’re
somewhat coming back to
$14 normal — except it’s being
1,000
compounded by a number of
$12 other factors that have come
up. So it looks like, more of an
800 adjustment than perhaps we
$10
would have seen if this would
have happened in isolation of
$8 600 the economic environment.
The dynamic of the two
”
$6 factors together is making the
400 disparity even bigger.
$4
200
$2
$10.2
$15.2
$1.6
$1.1
$2.3
$2.1
$1.7
$1.6
$1.5
$1.7
$1.6
$2.8
$2.8
$4.4
$3.6
$2.5
$2.8
$3.7
$4.0
$3.6
$3.2
$3.4
$3.2
$3.8
$4.3
$5.5
$8.7
$9.5
$9.5
$8.6
$6.6
$4.2
$3.6
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023 Warren Middleton
Lead Partner for Emerging Giants,
Center of Excellence in the UK
Deal value ($B) Deal count KPMG in the UK
#Q1VC
61
London sees tallies back to pre-2021 level

Venture financing in London
2015–Q1'23
$14 700
$12 600
$10 500
$8 400
$6 300
$4 200
$2 100
$12.8
$1.0
$0.6
$1.3
$1.1
$0.9
$1.0
$0.9
$0.9
$0.9
$2.1
$2.0
$3.5
$2.5
$1.2
$1.7
$2.3
$2.1
$2.8
$1.7
$2.4
$1.8
$2.5
$3.1
$3.2
$7.4
$5.7
$6.7
$6.4
$6.3
$4.7
$2.7
$2.4
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count
#Q1VC
62
Ireland has a slow quarter
“
Venture financing in Ireland
2015–Q1'23
One thing that is fairly positive
at the moment is that we
$800 200
haven’t seen a complete drop
180 off in early-stage deals.
$700 Notwithstanding the inherent
160 risks, and uncertainty about
$600 the future, VC’s realize that
140 still need to invest in early
$500 stage companies. Otherwise,
120 they risk missing out on the
”
next wave of growth
$400 100
companies.
80
$300
60
$200
40
$100
$176.1
$235.0
$134.7
$303.1
$168.1
$238.0
$187.0
$124.1
$178.4
$131.1
$415.8
$368.4
$440.2
$108.0
$125.2
$124.6
$118.1
$103.2
$215.3
$291.5
$589.2
$386.0
$707.3
$348.4
$431.7
$446.8
$472.6
$233.3
$124.6
20
$41.3
$51.5
$90.0
$73.0
$0 0 Anna Scally
Partner, Head of Technology & Media
KPMG in Ireland
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
63
VC invested evens out but volume remains down
“
Venture financing in Germany
2015–Q1'23
In the coming year, I believe
we are going to see more
$8,000 450
value creation in Germany.
Historically, a lot has been
$7,000 400 designed here and produced
elsewhere, but now we have
350 technologies like 3D printing
$6,000
and moulding techniques.
300 Companies don’t need
$5,000 hundreds of people; they just
250 need space. In 2023 we
$4,000 should see more investment in
200 this space — in smart
manufacturing that capitalizes
$3,000
”
150
on German engineering
capabilities.
$2,000
100
$1,069.9
$1,273.0
$1,750.6
$1,460.3
$1,209.0
$1,472.2
$1,988.6
$1,542.9
$1,343.8
$1,899.1
$2,168.4
$1,956.7
$3,375.1
$4,009.7
$3,960.3
$6,544.8
$2,620.1
$7,412.9
$3,856.4
$1,394.2
$1,079.8
$1,000 50
$642.4
$871.2
$829.9
$623.9
$578.7
$533.9
$668.0
$548.9
$899.7
$912.8
$938.7
$835.2
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023

Tim Dümichen
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 Partner
KPMG in Germany
#Q1VC
64
2023 sees slightest bump in VC invested in first quarter

Venture financing in Berlin
2015–Q1'23
$6,000 180
160
$5,000
140
$4,000 120
100
$3,000
80
$2,000 60
40
$1,000
$1,024.4
$1,211.6
$1,249.4
$1,256.2
$1,224.4
$1,870.9
$2,066.7
$2,273.9
$4,807.8
$1,540.8
$3,680.5
$1,044.7
20
$923.2
$538.1
$741.6
$332.6
$235.2
$352.7
$178.4
$395.2
$319.4
$409.4
$414.5
$406.5
$190.1
$830.3
$513.0
$417.1
$683.7
$639.1
$862.3
$380.2
$679.0
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
65
After bump in Q4 2022, Spain sees slowdown

Venture financing in Spain
2015–Q1'23
$1,800 200
$1,600 180
160
$1,400
140
$1,200
120
$1,000
100
$800
80
$600
60
$400
40
$1,539.7
$1,506.3
$1,142.9
$200
$127.5
$136.6
$221.3
$363.8
$162.2
$158.1
$282.6
$220.9
$153.6
$379.9
$265.7
$330.6
$188.1
$179.2
$502.1
$397.1
$385.2
$478.5
$317.9
$516.7
$498.5
$484.1
$694.6
$816.3
$670.2
$746.7
$370.0
20
$95.5
$96.1
$71.8
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
66
The general slowdown hits France, to a slightly lesser extent

Venture financing in France
2015–Q1'23
$7,000 500
450
$6,000
400
$5,000 350
300
$4,000
250
$3,000
200
$2,000 150
100
$1,000
$1,179.9
$1,364.6
$1,287.8
$1,490.0
$1,344.3
$1,196.9
$1,454.9
$1,916.5
$1,521.3
$2,807.3
$2,107.5
$2,119.7
$4,181.1
$4,042.2
$2,774.7
$6,181.1
$3,225.0
$2,873.5
$1,720.1
$1,412.6
$445.4
$544.3
$607.2
$350.0
$483.6
$549.6
$580.3
$983.4
$904.2
$738.3
$808.4
$965.8
$883.4
50
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
67
Paris sees proportion of deal value dwindle

Venture financing in Paris
2015–Q1'23
$4,000 250
$3,500
200
$3,000
$2,500
150
$2,000
100
$1,500
$1,000
50
$1,126.6
$1,163.4
$2,017.9
$1,111.3
$3,290.0
$2,248.3
$1,582.2
$3,500.0
$2,126.3
$2,251.5
$500
$134.5
$276.3
$367.2
$101.7
$285.5
$324.9
$378.8
$507.1
$443.9
$479.0
$493.0
$289.2
$706.0
$911.8
$448.1
$677.1
$828.3
$874.1
$660.5
$910.2
$924.3
$851.1
$447.3
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
68
After some outlier quarters, 2023 starts off slow
“
Venture financing in the Nordics
2015–Q1'23
We’re not seeing many
companies raising growth
$6,000 500
rounds at the moment in the
450 Nordics. The environment is
$5,000 far too uncertain for them. In
400 fact some are deferring any
new equity rounds until late
350
$4,000 this year or into 2024.
300 There’s more rounds being
raised at the early stages
$3,000 250 here right now — although
also the deployment of
200
capital for early-stage
$2,000
companies slowed down
”
150
somewhat in Q1’23.
100
$1,000
$1,310.2
$1,161.0
$2,099.1
$1,012.2
$1,577.2
$1,007.2
$2,390.5
$1,877.6
$4,206.6
$5,626.8
$2,143.6
$2,796.7
$2,705.2
$2,662.4
$2,588.8
$3,235.4
$442.5
$877.5
$375.3
$429.8
$302.6
$349.0
$568.6
$658.9
$548.8
$521.6
$825.6
$710.5
$808.4
$582.1
$813.4
$852.3
$740.7
50
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($M) Deal count Jussi Paski

Head of Startup & Venture
Services
KPMG in Finland
#Q1VC
69
After a record rise throughout 2021, the gradual slide continues
“
Venture financing in Israel
2015–Q1'23
Q1' 2023 saw the global
stagnation in venture activity also
$6,000 250
affecting Israel. This trend is
amplified due to the current
political uncertainty, raising
$5,000 concerns as to their economic
200
ramifications on the local market.
The number of investment deals
$4,000 decreased substantially
150 (approximately half of those in Q1
2022), the majority in early-stage
$3,000 rounds (Seed and Round A). M&A
deals dominate the exits scene
100 (several were large scale —
$2,000 $100M and more), while IPOs
have nearly diminished. Looking
forward to the next quarter, we
50
$1,000 believe that the instability in the
$1,036.8
$1,245.0
$1,087.6
$1,058.1
$1,097.0
$1,381.1
$1,028.1
$1,141.9
$1,457.4
$1,688.0
$2,444.0
$2,744.5
$3,074.0
$5,022.1
$3,217.7
$3,586.1
$1,666.7
$1,232.1
global banking sector, coupled
$784.8
$309.5
$307.9
$636.9
$773.0
$528.9
$528.7
$289.4
$645.6
$875.7
$738.6
$691.7
$855.2
$931.8
$698.3
with the local political unrest, will
have a major impact on local tech
$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 Q1 companies, at a scope yet to be
ascertained.
2015 2016 2017 2018 2019 2020 2021 2022 2023
Dina Pasca-Raz
Head of Technology, #Q1VC
© 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
Cleantech, fintech & healthcare dominate

Top 10 financings in Q1'23 in Europe
8 1. Abound — $602M, London, UK — Fintech — Early-stage VC

1
2. Enpal — $228.4M, Berlin, Germany — Cleantech — Series D
3 2
4
9 5 3. The Bank of London — $160M, London, UK — Fintech — Series C
10
4. Moonfare — $151.7M, Berlin, Germany — Fintech — Series C
7
6
5. One Moto — $148.9M, London, UK — Cleantech — Late-stage VC
6. Oxbotica — $140.3M, Oxford, UK — Mobility tech — Series C
7. Amolyt Pharma — $138M, Lyon, France — Drug discovery — Series C
8. Hemab Therapeutics — $135M, Copenhagen, Denmark — Biotechnology — Series B
9. Carmoola — $125.95M, London, UK — Fintech — Series A
10. Noema Pharma — $110.7M, Basel, Switzerland — Drug discovery — Series B

Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023.
Data provided by PitchBook, April 19, 2023
#Q1VC
71
Global | US | Americas | Europe Asia
In Q1’23, VC-backed
companies in the Asia
region raised $13.5B
across 1,773 deals
#Q1VC
72
Challenging time for VC investment in Asia during Q1’23

VC investment in Asia fell from $25.5 billion in Q4’22 to just $13.5 billon in Q1’23 — the lowest quarter of VC investment seen in the region since Q2’15. The quarter was
challenging from multiple angles, as several factors combined to stifle VC investment across the region. In China, a surging COVID-19 wave hindered VC activity in
advance of its New Year holidays, while Hong Kong felt the impact of rising interest rates and a slowdown in IPO activity, and India saw investors becoming pickier with
their investments. Only Japan saw increasing investment in Q1’23, although the total remained far below Q1’22.
Alternative energy hot across Asia, particularly in China and Hong Kong As VC investors questioned high valuations, late-stage funding in China dropped considerably in
Q1’23; by comparison, pre-seed and Series A funding was much more stable. Corporate VC
VC investment in alternative energy and electric vehicles remained very robust across Asia in investment in China also declined considerably during the quarter as corporates focused their
Q1’23, with China and Hong Kong accounting for the largest deals in the space, including a capital on supporting their own operations rather than on growth and expansion.
$750 million raise by EV vehicle manufacturer Zeekr, a $445 million raise by AI company
PhonePe, a $442 million raise by solar energy technology company SolarSpace, a $400 million VC investment in India remains subdued, but long-term outlook positive
raise by fossil fuels decarbonization company EcoCeres, and a $290 million raise by United
Aircraft. VC investment in India remained relatively soft in Q1’23 as VC investors intensified their scrutiny
of potential deals. While FOMO drove a lot of VC investment in India in 2021 and early 2022, VC
Interest in alternative energy also remained robust in India during Q1’23, with VC investors investors have since enhanced their focus on startup performance and profitability. Fintech
particularly focused on the two-wheel EV market. Given India’s role as a major automotive continued to drive many of the largest deals in India in Q1’23, including a $445 million raise by
manufacturing hub, it is expected that alternative energy will remain a key priority for VC PhonePe, a $218 million raise by NoBroker, a $200 million raise by KreditBee, and a $150 million
investors for some time. India’s government has also been very supportive of the EV space, raise by Insurance Dekho. India also saw growing interest in agtech and gaming during the
introducing subsidies to support EV adoption. quarter. After a long period of euphoria, interest in edtech in India died down considerably during
Q1’23.
VC investment in China falls sharply quarter-over-quarter
Despite the current slowdown in VC funding, macro factors in India remained relatively strong
VC investment in China was particularly hard hit this quarter as the country battled a major compared to other jurisdictions, which is driving optimism that the country will see a bounce back
COVD-19 wave in the wake of its autumn reopening, although VC activity picked up somewhat in VC investment in the later half of 2023.
in the second half of the quarter once the wave diminished. VC investment during Q1’23 totalled
only $7.4 billion — less than half of the $15 billion seen in Q4’22.
#Q1VC
73
Challenging time for VC investment in Asia during Q1’23, cont’d.

Japan sees slight uptick in VC investment in Q1’23 Trends to watch for in Q2’23
Japanese VC investment saw slight increase during the quarter compared to global downward There is cautious optimism across much of Asia heading into Q2’23, with several jurisdictions
trend in VC investment, although it remained soft compared to the level of investment seen seeing some positive signs for the future, if no actual pick-up in deals at present. While VC
during the same quarter in 2022. VC investors in Japan became more selective with respect to investment in the region is not expected to bounce back remarkably over the next quarter, should
post Series C deals during Q1’23, although appetite for seed and Series A deals remained quite the sense of positivity continue, VC activity could begin to see some recovery heading into the
robust. second half of the year.
The Government of Japan made a strong commitment to fostering innovation in its Integrated While IPO activity was slow in Asia during Q1’23, it could see some renewed interest as a result
Innovation Strategy 202212. In Q1’23, it moved forward with several of the initiatives included in of the new Chapter 18C listing rules in Hong Kong. China is also working to strengthen the
this strategy, including funding for R&D at universities and centers of excellence and funding to attractiveness of its mainland stock exchanges for tech-driven businesses in sectors like
support local governments as they establish startup hubs and clusters. In addition to Tokyo, deeptech, EV, and biotech.
Sapporo and Sendai have rapidly emerged as startup hubs in Japan. Osaka, Hiroshima, and
Fukuoka are also aggressively using funds to attract startups to their prefectures.
AI gaining significant attention, particularly in Hong Kong
Investor interest in AI has been relatively robust in Asia historically, although it increased further
in Q1’23 in the wake of the global buzz generated by ChatGPT. The applicability of AI to many
diverse sectors makes it a particularly attractive area for investment. In Hong Kong, AI solutions
are maturing quite rapidly, particularly in building management — such as the use of AI to
manage building operations, energy use, and security, and in health and biotech — including
the use of AI for drug discovery and the modeling of disease spread.
12 https://www.japan.go.jp/kizuna/2022/06/integrated_innovation_strategy.html
#Q1VC
74
2023 sees a slow start
“
Venture financing in Asia
2015–Q1'23 EV, alternative energy,
VC invested remained relatively Greentech — all of these
$80 5,000 healthy, especially in the broader areas are still doing very well
context of historical tallies, up to right now. Investment in the
4,500 the end of 2022. However, this space is quite big and I think
$70
year has begun in a markedly it’s just going to get bigger and
4,000 slow fashion, even if figures do bigger every day. It’s such a
$60 tick up somewhat. Given that positive area, such a good
multiple macro and market news story, that everyone is
3,500
factors are still in place that are trying to get in on it. The other
$50 producing an environment area that is getting a lot of
3,000
marked by caution, it remains to
attention right now is AI.
be seen how much further activity
$40 2,500 Not just the consumer
may diminish.
applications, but the real
”
2,000
deeptech solutions. It’s a
$30 really exciting space.
1,500
$20
1,000
$10
500
$13.7
$12.8
$27.8
$13.6
$21.9
$29.7
$17.9
$17.0
$13.8
$20.9
$25.5
$24.5
$35.9
$52.2
$34.0
$37.6
$25.2
$20.2
$36.5
$38.1
$25.1
$24.1
$32.3
$46.6
$45.6
$45.1
$63.5
$71.7
$44.6
$32.6
$31.1
$25.5
$13.5
$0 0
Egidio Zarrella
2015 2016 2017 2018 2019 2020 2021 2022 2023 Partner, Clients and Innovation
KPMG China
#Q1VC
75
Down rounds tick upward as metrics begin to subside

Median deal size ($M) by stage in Asia Up, flat or down rounds in Asia
2015–2023* 2015–2023*
$70 100%
90%
$60
Up
80%
$50
70%
$40 60%
50%
$30 Flat
40%
$20 $17.0 30%
20%
$10
$7.50
$4.6 10% Down
$0 $0.6
2015 2016 2017 2018 2019 2020 2021 2022 2023* 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. 2023 figures for up, down or flat rounds are based on non-normative sample sizes.
#Q1VC
76
Deal sizes begin to slide

Median deal size ($M) by series in Asia
2015–2023*
$90
$80
$70
$60
$50
$40
$30.0
$30 $29.3
$20
$14.6
$10
$7.3
$0.79
$0 $0.1
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The Series D+ figure for 2023 YTD is based on non-normative sample sizes.
#Q1VC
77
Although sample sizes introduce variability, some metrics have begun to slide
Median pre-money valuation ($M) by series in Asia
2015–2023*
$700
$600
$520.0
$500
$400
$323.0
$300
$200
$100
$75.0
$25.0
$0 $1.6 $3.5
2015 2016 2017 2018 2019 2020 2021 2022 2023*
Seed Angel A B C D+
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023. The 2023 YTD figures for Angel, Series B, C and D+ are all based on non-normative sample
sizes.
#Q1VC
78
Earlier-stage deals stay surprisingly resilient

Deal share by series in Asia Deal share by series in Asia
10,000 $160
9,000 Series D+ Series D+

$140
8,000
$120
7,000 Series C Series C
$100
6,000
5,000 $80
Series B Series B
4,000
$60
3,000
Series A $40 Series A
2,000
$20
1,000
Angel & seed Angel & seed

0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
79
VC invested increasingly flows to formerly less-active sectors

Asia venture financings by sector Asia venture financings by sector
90% Commercial 90%

Products &
Services
80% Consumer Goods 80%
& Services
70% Software 70%
60% Pharma & Biotech 60%
50% 50%
Other
40% 40%
Media
30% 30%
IT Hardware
20% 20%
HC Services &
Systems
10% 10%
HC Devices &
Supplies
0% 0%
Energy
2023*
2015
2016
2017
2018
2019
2020
2021
2022
2023*
2015
2016
2017
2018
2019
2020
2021
2022
#Q1VC
80
Corporates pull back in line with the general market

Corporate participation in venture deals in Asia
2015–Q1'23
$50 1,800
$45 1,600
$40
1,400
$35
1,200
$30
1,000
$25
800
$20
600
$15
400
$10
$5 200
$18.0
$13.0
$21.8
$10.0
$11.8
$17.5
$11.0
$21.6
$40.1
$20.4
$18.1
$13.5
$10.5
$14.5
$24.8
$16.1
$13.5
$18.9
$28.3
$26.2
$22.0
$43.3
$46.0
$27.1
$17.8
$16.7
$15.5
$6.9
$6.4
$6.9
$9.6
$6.9
$7.2
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
81
Exit activity slows markedly
“
Venture-backed exit activity in Asia
2015–Q1'23
The IPO market in Hong
Kong continues to be slow
$200 250
this quarter, but the new
$180 Chapter 18C listing regime
that came out in Q1’23 will
$160 200 make it easier for specialist
technology companies —
$140
startups focused on AI,
robotics, alternative energy,
$120 150
agritech, and other similar
$100 areas — list on the Hong
Kong Stock Exchange. This
”
$80 100 could help spur some new
activity later in 2023.
$60
$40 50
$181.3
$134.0
$119.4
$20
$10.5
$15.1
$43.0
$16.6
$35.3
$48.0
$65.3
$11.6
$26.5
$27.0
$25.2
$23.5
$34.5
$55.2
$50.4
$32.1
$32.9
$36.1
$65.5
$34.8
$11.7
$5.5
$4.2
$6.7
$4.6
$9.2
$7.2
$8.6
$6.9
$0 $9.7 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Irene Chu
Partner & Head of New Economy and
Exit value ($B) Exit count Life Sciences, Hong Kong (SAR)
KPMG China
#Q1VC
82
IPOs remain somewhat more resilient

Venture-backed exit activity (#) by type in Asia Venture-backed exit activity ($B) by type in Asia
2015–2023* 2015–2023*
800 $500
$450
700
Public listing Public
listing
$400
600
$350
500
$300
400 Buyout $250 Buyout
$200
300
$150
200
$100
100 Acquisition
$50 Acquisition
0 $0
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
83
2023 starts off slow after years of decline

Venture fundraising in Asia
2015–2023*
After 2022, it is clear that the domestic venture fundraising cycle in the region
$250 1,800
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
1,600 traditional venture fundraising, or geopolitical tensions around international
sources of capital commitments, or some other factor, that affected the past
$200 few years in particular.
1,400
1,200
The fundraising cycle is very sluggish at the
$150
1,000 start of the year, but now it remains to
800 be seen how this systemic cycle
$100
600
affects startup financing down
the line…
400
$50
200
$118.6
$135.2
$226.1
$166.2
$115.5
$112.6
$88.6
$69.9
$4.6
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
84
First-time fundraising remains more resilient than in other regions

Venture fundraising (#) by size in Asia First-time vs. follow-on venture funds (#) in Asia
2015–2023* 2015–2023*
1,800 100%
Under $50M
1,600 90%
80%
1,400 $50M-
Follow-on
$100M
70%
1,200
60%
$100M-
1,000 $250M
50%
800
$250M- 40%
$500M
600
30%
400 $500M-$1B 20% First-time
200 10%
$1B+
0 0%
2015 2016 2017 2018 2019 2020 2021 2022 2023* 2015 2016 2017 2018 2019 2020 2021 2022 2023*
#Q1VC
85
India sees decline, much like elsewhere
“
Venture financing in India
2015–Q1'23
The biggest change in India is
that the euphoria for deals has
$18 800 died down. The FOMO has
gone. The big ticket deals
$16 700 have also dried up, which has
had an outsized impact on our
$14
600
total investment numbers. But
despite the visible decline, it’s
$12 important to know that a lot is
500 still happening in India. The
$10 macros here are still very
400 good. We’re still seeing a lot
$8 of funding in pre-series A
deals. And we’re still seeing a
300
$6 lot of new micro funds being
raised in the country — funds
”
200 under $100 million with check
$4
sizes from $1–5 million.
$2 100
$15.7
$12.2
$1.8
$2.6
$4.1
$2.0
$1.2
$0.9
$1.5
$0.9
$2.4
$2.2
$5.6
$2.2
$2.9
$1.7
$2.5
$3.6
$3.5
$3.4
$5.1
$7.3
$3.2
$2.1
$4.5
$3.7
$5.3
$5.6
$9.3
$8.1
$3.0
$2.8
$2.1
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Deal value ($B) Deal count Nitish Poddar

Partner and National Leader,
Private Equity
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 KPMG in India
#Q1VC
86
VC activity has a potentially temporal down quarter
“
Venture financing in China
2015–Q1'23
VC investment in China
remained quiet in Q1’23,
$50 2,500
although it did strengthen in
$45 the latter half of the quarter.
Now we’re starting to see
$40 2,000 some renewed VC activity.
Even if that activity hasn’t fully
$35 translated into deals quite yet,
it is a positive sign. Most of
$30 1,500 the VC investment here is
very tech driven, including
$25 quite a lot in the alternative
energy space, which isn’t
$20 1,000
new. But one new sector that
is seeing growing activity is
$15
biotech and life sciences.
”
$10 500 That’s an area to watch as we
head into Q2’23.
$5
$10.8
$21.6
$10.0
$19.0
$27.4
$13.8
$14.5
$15.0
$14.5
$19.9
$25.1
$44.3
$25.7
$26.6
$17.4
$12.2
$26.2
$20.6
$13.6
$17.2
$22.2
$36.4
$29.8
$26.3
$34.5
$41.2
$21.3
$14.0
$19.1
$15.0
$9.4
$9.9
$7.4
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
Zoe Shi
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023. Data provided by PitchBook, April 19, 2023 Partner
KPMG China
#Q1VC
87
2023 starts off slowly for overall VC activity after a strong Q4

Venture financing in Australia
2015–Q1'23
$2,500 250
$2,000 200
$1,500 150
$1,000 100
”
$500 50
$1,380.3
$2,073.2
$1,484.8
$2,175.8
$1,333.3
$1,234.5
$129.4
$122.1
$137.8
$229.3
$137.2
$257.4
$183.9
$135.0
$252.1
$254.6
$174.7
$299.2
$548.0
$323.0
$426.1
$537.4
$467.9
$398.6
$466.0
$638.9
$732.8
$428.5
$529.5
$602.4
$760.2
$664.5
$479.4
$0 0
2015 2016 2017 2018 2019 2020 2021 2022 2023
#Q1VC
88
Q1 2023 sees surprisingly robust tally of VC invested, all things considered
“
Venture financing in Japan
2015–Q1'23
In Japan, we have seen a
slowdown in fundraising by
$2,500 400
traditional VC firms, however,
there continues to be appetite
350 from corporates, both for
$2,000
creating CVC funds and for
300
making direct investments in
startups. In Japan, large
corporates are highly engaged
250 in providing such finance to
$1,500
startups as they see these
200 investments as a way to drive
”
their own growth and take
$1,000 advantage of synergies.
150
100
$500
$1,037.5
$1,105.3
$1,030.3
$1,382.9
$1,147.7
$1,181.3
$1,188.3
$1,350.9
$1,166.7
$1,379.3
$1,972.2
$1,973.7
$1,619.4
$1,470.4
$1,668.4
$1,684.7
50
$232.2
$234.5
$204.0
$576.9
$505.7
$238.8
$338.1
$658.2
$359.1
$620.4
$659.6
$833.8
$752.9
$972.6
$946.4
$622.6
$694.9
$0 0 Hiroshi Abe
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 Q1 Executive Board Member,
2015 2016 2017 2018 2019 2020 2021 2022 2023 Partner
KPMG in Japan
#Q1VC
89
A bevy of different sectors see top deals

Top 10 financings in Q1'23 in Asia-Pacific
7 1. Zeekr — $750M, Ningbo, China — Mobility tech — Series A

3
10 6
1 2. PhonePe — $445.6M, Bengaluru, India — Mobile — Late-stage VC
8
3. SolarSpace — $442M, Xuzhou, China — Cleantech — Series B
5
2 4. EcoCeres — $400M, Hong Kong — Cleantech — Series B
4
9
5. United Aircraft — $290.3M, Shenzhen, China — Aerospace — Series D
6. VSPO — $265M, Shanghai, China — E-sports — Series C
7. GuangNianZhiWai — $230M, Beijing, China — AI & ML — Seed
8. GenScript ProBio — $224M, Nanjing, China — Life sciences — Series C
9. NoBroker — $218.2M, Bengaluru, India — Proptech — Series E
10. ZhengTaiXinNeng — $215.6M, Haining, China — Cleantech — Series B
Source: Venture Pulse, Q1'23, Global Analysis of Venture Funding, KPMG Private Enterprise. *As of March 31, 2023.
Data provided by PitchBook, April 19, 2023
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90
KPMG Private Enterprise's Emerging Giants Network

From seed to speed, we’re here throughout your journey
Contact us:
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Global | US | Americas | Europe | Asia
About us
About KPMG Private Enterprise
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About the report

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 & Venture 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,
• Lindsay Hull, Senior Director, Emerging Giants Global Network, KPMG Private
KPMG 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, KPMG in Ireland • Nicole Lowe, Head of Emerging Giants, KPMG in the UK
• Dr. Ashkan Kalantary, Deal Advisory, M&A GrowthTech & Ventures, • Nitish Poddar, Partner and National Leader, Private Equity, KPMG in India
KPMG in Germany
• Peter Kehrli, Partner, KPMG in the US
• Dina Pasca-Raz, Head of Technology, Head of International Tax, KPMG in Israel
• Robert Baxter, Head of Corporate Finance, KPMG in the UK
• Diogo Garcia Correia, Venture Capital & Emerging Giants Business Development,
• Rodrigo Guedes, Managing Director, KPMG in Brazil
KPMG in Brazil
• Ryan Forster, Partner, KPMG in Canada
• Hiroshi Abe, Executive Board Member, Partner, KPMG in Japan
• Samuel Lush, Director, Private Equity Group, KPMG in the US
• Irene Chu, Partner & Head of New Economy and Life Sciences, Hong Kong (SAR)
Region, KPMG China • Sunil Mistry, Partner, KPMG Private Enterprise, Technology, Media &
Telecommunications (TMT), KPMG in Canada
• Jules Walker, Senior Director, Business Development, KPMG in the US
• Tim Dümichen, Partner, KPMG in Germany
• Warren Middleton, Lead Partner for Emerging Giants, Center of Excellence in
the UK, KPMG in the UK
• Zoe Shi, Partner, KPMG China
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About the report

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, Asia- states the round is an angel round, it is classified as such. Finally, if a news story or press release only mentions
Pacific and Europe regional totals, they will not match the global total, as the global total considers those other regions. Those individuals making investments in a financing, it is also classified as angel. As for seed, when the investors and/or
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 as a • Early-stage: Rounds are generally classified as Series A or B (which we typically aggregate together as early-stage)
financial investment occurring when a PE investor acquires a minority stake in a privately held corporation. Thus, if the investor is either by the series of stock issued in the financing or, if that information is unavailable, by a series of factors
classified as PE by PitchBook, and it is the sole participant in the recipient company’s financing, then such a round will usually be including: the age of the company, prior financing history, company status, participating investors, and more.
classified as PE growth, and not included in the Venture Pulse datasets. However, as of the Q4 2022 edition, a new stage for • Late-stage: Rounds are generally classified as Series C or D or later (which we typically aggregate together as late-
venture that was invented by PitchBook to account for growth at late-stage VC will be included, defined as venture growth. That stage) either by the series of stock issued in the financing or, if that information is unavailable, by a series of factors
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 finance, have raised at least six VC rounds will be included in this category, as of the Q4 2022 edition of Venture Pulse
real estate investment trusts, and oil & gas equipment, utilities, exploration, production and refining. Lastly, the company in released in January 2023.
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 attributed to the PitchBook includes the first majority liquidity event for holders of equity securities of venture-backed companies. This
year of the final close of the fund. Interim close amounts are not recorded in the year of the interim close. includes events where there is a public market for the shares (IPO) or the acquisition of majority of the equity by another
entity (corporate or financial acquisition). This does not include secondary sales, further sales after the initial liquidity
Deals event, or bankruptcies. M&A value is based on reported or disclosed figures, with no estimation used to assess the value
of transactions for which the actual deal size is unknown. IPO value is based on the premoney valuation of the company
PitchBook includes equity investments into startup companies from an outside source. Investment does not necessarily at its IPO price. One slight methodology update is the categorical change from “IPO” to “public listings” to accommodate
have to be taken from an institutional investor. This can include investment from individual angel investors, angel groups, the different ways we track VC-backed companies’ transitions to the public markets. To give readers a fuller picture of
seed funds, VC firms, corporate venture firms, corporate investors, and institutions, among others. Investments received the companies that go public, this updated grouping includes IPOs, direct listings, and reverse mergers via SPACs.
as part of an accelerator program are not included; however, if the accelerator continues to invest in follow-on rounds,
those further financings are included. All financings are of companies headquartered in the US, with any reference to In the edition of the KPMG Venture Pulse covering Q1 2019 and all ensuing, PitchBook’s methodology regarding aggregate
“ecosystem” defined as the combined statistical area (CSA). PitchBook includes deals that include partial debt and equity. exit values changed. Instead of utilizing the size of an IPO as the exit value, instead the prevaluation of an IPO, based upon
ordinary shares outstanding, was utilized. This has led to a significant change in aggregate exit values in all subsequent
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.
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To connect with a KPMG Private Enterprise adviser in your region, email enterprise@kpmg.com.
Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates or related entities.
kpmg.com/venturepulse
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely
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
without appropriate professional advice after a thorough examination of the particular situation.
KPMG refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG International”), each of which is a separate legal entity. KPMG International
Limited is a private English company limited by guarantee and does not provide services to clients. For more detail about our structure please visit kpmg.com/governance.
Throughout this document, “we”, “KPMG”, “KPMG Private Enterprise”, “us” and “our” refers to the global organization or to one or more of the member firms of KPMG International Limited (“KPMG
International”), each of which is a separate legal entity.
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization.

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Venture Pulse

Challenging start to the year for VC investment globally

Challenging start to the year for VC investment globally, cont’d.

Venture investment continues to face significant headwinds

Financing metrics begin to show impact of caution

The latest stages continue to see the greatest impact

Some earlier-stage metrics remain somewhat healthier

Investors retreat from the riskier stages

Healthcare & energy see gradual increases

Energy in the Americas,

Corporates & first-time deal flow pull back as well

$120 4,000 $80 18,000

3,500 $70 16,000

Unicorn rounds diminish as liquidity prospects dim

$80 300 $500 1,200

$40 150 $250 600

M&A remains most prolific route in sluggish first quarter

500 Acquisition $200 Acquisition

After an exceptional period, a slowdown

The start of 2023 saw a significant

Capital raised ($B) Fund count

Follow-on funds remain more popular while $1B+ vehicles disappear

Cleantech & fintech remain popular

1. Stripe — $6.5B, San Francisco, US — Fintech — Series I

2. Generate — $880.6M, San Francisco, US — Cleantech — Late-stage VC

3. Zeekr — $750M, Ningbo, China — Mobility tech — Series A

7. PhonePe — $445.6M, Bengaluru, India — Mobile/fintech — Late-stage VC

8. SolarSpace — $442M, Xuzhou, China — Cleantech — Series B

9. Netskope — $401M, Santa Clara, US — Cybersecurity — Late-stage VC

Market challenges stifle VC investment in the US in Q1’23

Market challenges stifle VC investment in the US in Q1’23, cont’d.

Flat rounds nearly double in proportion as metrics drop

Earlier series remain a bit more resilient

Valuations plummet at the latest stages

Perceived recession-resilient areas continue to draw investment

100% Transportation 100%

90% Commercial 90%

First-timers & corporates pull back in tandem

Exits slide to lowest quarterly tally in years

Exit value ($B) Exit count

Exit value shrunk to virtually nothing in Q1

After recent highs, a new slowdown for fundraising

Capital raised ($B) Fund count

Allocators seek refuge in smaller funds, in quirk of timing

$50M- $140 $50M-

$500M-$1B $40 $500M-$1B

Capital commitments concentrate in proven players

20% First-time 20% First-time

VC investment in the Americas drops to low not seen since Q4’17

Corporates increasingly willing to work together Trends to watch for in Q2’23

Governments remain supportive of VC investment and ecosystem growth

All venture volume continues to decline

5,000 … itnow remains to be seen

Metrics slide while flat rounds proliferate

Angel & seed Early VC Later VC Venture growth 0%

Valuations decline at the highest levels

Riskier stages see proportionate pullback

Angel & seed

Software remains predominant amid mild growth in energy & healthcare

100% Transportation 100%

90% Commercial 90%

After relative resilience, dealmaking finally slides

Deal value ($M) Deal count

Mexico sees similar downturn in venture activity