Number of tech unicorns dropped 40% in 2022 | Global Startup Ecosystem Report

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As venture capital investment plummeted during the economic downturn, the number of tech unicorns fell 40% in 2022, according to the Global Startup Ecosystem report.

Last year, we saw a slowdown in the number of unicorns, with a global drop of 40% from 595 to 359 in 2021. However, seven ecosystems still produced their first tech unicorn in 2022, according to Startup’s report Genome and Global Entrepreneurship. Network (GEN).

The report says a recession is a good time to invest in startups – high interest rates can benefit startups, concentrating capital and talent in companies that create value. Startups funded during the Great Recession had slightly higher exit multiples relative to total money invested than those funded during economic expansions.

“Despite the current economic challenges, we are confident that, equipped with the right knowledge, entrepreneurs, policy makers and community leaders around the world can take advantage of opportunities to come together and show how innovative technologies can not only continue to drive growth and job creation, but simultaneously help save the planet and ensure a better future for all,” said JF Gauthier, CEO of Startup Genome, in a statement. “This essential mission cannot be put on hold while we are expecting tough economic times.”


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Weakening of CV

Global venture capital funding began its downward trend in the first quarter of 2022, falling 13% from the fourth quarter of 2021. Overall, 2022 was down 35% from 2021, according to the report.

Although fewer startups were funded in 2022 globally, they received larger sums: there was an 18% drop in deal count, but a 17% drop in deal size, meaning that the average size of transactions increased by 2%.

The biggest tech outing of the year was Miami-based MSP Recovery’s $32.6 billion initial public offering (IPO), which pales in comparison to 2021’s biggest outing. $150 billion IPO of Beijing-based Kuaishou, which was nearly five times larger.

Reflecting the growing use of AI and its intersection with other subsectors, AI and Big Data was the subsector with the highest number of venture capital deals in 2022, accounting for 28% of the global share. It also has the highest growth in the number of releases, at 74%, from 2017-2018 to 2021-2022.

As Deep Tech innovations become more integrated into the startup world, their output amount grew by 326% from 2017-2018 to 2021-2022, faster than non-Deep Tech technologies, which grew by 225%.

Regional venture capital investments

Overall venture capital funding in Asia fell 31% from 2021, from $102 billion to $70 billion. However, Asia was the least affected region in the world in terms of the amount of seed funding, losing only one percentage point from 2021 to 2022.

In 2022, the amount of seed funding in Europe decreased by 15% compared to 2021, but the average amount of seed deals increased by 7% due to a significant reduction in the number of seed deals, barely 75% of 2021. number.

Latin America decreased the amount of Series B+ funding by 72% from 2021 to 2022, while the number of transactions decreased by 54%. From 2018 to 2022, Latin America saw a 65% increase in the number of Series B+ transactions and a 143% increase in the amount of Series B+.

In 2022, the Middle East and North Africa (MENA) region saw a 19% decline in Series B+ deal size and a 14% decline in total venture capital funding. From 2018 to 2022, the MENA region saw a 96% increase in the amount of seed funding, a 28% growth in the number of Series B+ deals, and a 113% increase in the amount of Series B+ deals.

In 2022, Oceania saw a 31% year-over-year decline in the amount of Series B+ transactions, a 10% decline in the number of Series B+ transactions, and a 13.6% decline in the number of Series B+ transactions. seed funding amount. However, Oceania saw a 60.7% increase in the amount of seed funding between 2018 and 2022, the highest of any region in the world for this period.

In Sub-Saharan Africa, seed funding decreased by 5.9% and seed funding amount by 6.7% between 2021 and 2022. Looking at 2018-2022, seed funding in the region increased by 227% and the number of seed transactions increased by 43.8. %.

North America seed funding fell 26%, and the number of Series A deals fell 25%, from 2021 to 2022. Regardless, North America remains the top country in start-up in the world, representing 50% of the top 30, plus the ranking of the finalists. .

The top three ecosystems maintained their ranking positions as of 2020, with Silicon Valley leading the way, followed by New York and London tied at No. 2. Silicon Valley continues to dominate despite a reduced market share, with a contraction of the Series A deal amount by 75% and Series B+ by 73% from 2021 to 2022.

China’s dominance declined, while India continued to grow: eight Chinese ecosystems fell in the rankings compared to last year, including major hubs in Beijing, Shanghai and Shenzhen, while seven Indian ecosystems progressed, including Delhi and Bangalore-Karnataka, in the top 30, with Mumbai tied at 31.

Boston and Beijing both slipped out of the top five to No. 6 and No. 7, respectively, both dropping two positions. This paved the way for Los Angeles to climb to No. 4 and Tel Aviv to No. 5, both moving up two places.

Singapore entered the top 10 for the first time, moving up 10 places from No. 8 to No. 18 in the GSER 2022, the biggest improvement in the rankings. Melbourne moved up an impressive six places from last year to 33rd place. The Australian ecosystem has increased by 43% in ecosystem value compared to GSER 2022.

The top 100 emerging ecosystems are collectively worth more than $1.5 trillion in ecosystem value, a 50% increase from GSER 2022.

Istanbul took first place in the new Strong Starters ranking, which identifies the top 25 emerging ecosystems with the most robust seed funding activity.

“As more than half of the companies on the 2009 Fortune 500 list were launched during a recession or bear market, we know that tough economic times can produce high-performing startups,” said Jonathan Ortmans, President. of the Global Entrepreneurship Network, in a press release. “Despite recent declines in investment, this report foreshadows where we could see the world’s most disruptive and solutions-focused companies emerge in the years to come – and provides unprecedented insights that policymakers and community leaders need. to create resilient startup ecosystems.”

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