2022 was a challenging year for VC-backed tech companies. Inflation and geopolitics exploded, making the already volatile markets even shakier. The crypto markets spiraled with the implosion of several high-profile exchanges, prompting many firms to log massive losses. Waves of layoffs sent confidence plummeting, and the IPO window was firmly shut for most startups.

Here's the state of VC in six charts. Dive deeper with the PitchBook-NVCA Venture Monitor.

Despite a fundraising boom, the market environment is moving sharply away from a startup- and founder-friendly environment to one that favors investors. That's according to the PitchBook VC dealmaking indicator, which quantifies how startup-friendly, or investor-friendly, the capital raising environment is.

Factors driving the shift include capital demand outstripping supply and a decline in valuation step-ups across stages.

Speaking of fundraising ...

While the number of new funds took a dive in 2022, the amount of capital raised by funds reached a record high of $162.6 billion. Despite difficult economic headwinds, for the second year in a row, capital raised surpassed $100 billion.

After a blockbuster year in 2021, it was only natural that unicorns deal activity began to slip. Our data tracks deal count and value, both of which saw declines. The decline both annually and quarterly signals a trend in lowering valuations. In Q4 2022, unicorns raised the lowest amount of capital since 2019.

It wasn't just the IPO market that was locked up—overall exit activity plummeted in 2022. Annually, exit activity value dropped below $100 billion for the first time in five years.

SPACs were the hottest topic years ago with several high-profile entries into the space like cybersecurity company FireEye and electric carmaker Lucid Motors. Our data shows that SPAC IPOs hit a new low with the amount raised by SPACs dropping nearly 50% year-over-year.

Early-stage pre-money valuations have continued to rise on average, according to our data, as opposed to other valuations that saw drops in later stages.

Related read: PitchBook-NVCA Venture Monitor

Featured image by Drew Sanders/PitchBook News

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