A Look Into the Global Venture Capital Ecosystem

2022 proved to be one of reckoning for the venture capital industry, and cemented 2021 as an outlier rather than the new normal. Though we saw investment pace in the private markets slow in the face of macro volatility, rising interest rates, and a declining stock market, 2022 proved to be a strong year for global venture capital historically and for Endeavor Catalyst.

According to Crunchbase data, global venture funding reached $445B in 2022 — a 35% YoY decline from the $681B invested in 2021. However, venture funding in 2022 was still $100B higher than the $342B invested in 2020. Interestingly enough, we deployed the most capital in Endeavor Catalyst’s history in 2022 – $72.4M across 59 companies. This was 4% more capital than in 2021 and 159% more capital than in 2020. Notably, we invested in 14% fewer companies compared to 2021, supporting the notion that the very best companies can still get funded in bad times.

Though we did our part, there is still a critical imbalance between capital being demanded and capital being supplied, and this is true despite ample “dry powder” in the ecosystem. The scaling back of late-stage funding was deeply felt, and continues to impact startups as they prepare to raise Series B and later rounds in 2023; round sizes and valuations have come down and
investors are being noticeably more cautious. For the best companies – clear market leaders with strong business fundamentals – capital will still be available, potentially at the same (or better) terms as last year. For other companies, capital will only be available at a discount to last
year’s multiples despite growth in metrics or, in some cases, not at all.

Our global diversification is our unique advantage, and we’re seeing this now more than ever.

Some highlights below:

• USA: The country’s full-year deal value totaled $238.3B, well ahead of the 2020 number, with
  activity weighted towards the first half of the year. Notably, 769 venture funds raised a combined $162.6B in 2022, setting an annual record for capital raised and boding well for future deployment.
  Liquidity was also present, largely in the form of M&A, as public markets remained weak.
  • Salesloft (Atlanta – Fund III) was acquired by Vista Equity Partners in January 2022 at a $2.3B valuation.
  • Skuvault (Louisville – Fund II) was acquired by Linnworks in August 2022.
• LATAM: Though down significantly from its 2021 peak, LATAM still boasted 10+ mega rounds in 2022 – six of these are Endeavor Catalyst investees.
  • Creditas (Brazil – Fund II) raised over $400M across two rounds in 2022, bringing its valuation to $4.8B.
  • In Q4 2022, Kueski (Mexico – Fund I) raised one of the top 10 largest financing
    rounds in LATAM, and the largest round in Mexico.

• EUROPE: European venture funding did not fall as sharply as in North America or Asia in 2022. In fact, 2022 funding was significantly higher than prior years, and was nearly double the $46B raised in 2020.
  • Satispay (Italy – Fund II) raised $100M+ in October 2022 and was one of the few companies to achieve Unicorn status this quarter.
  • Payhawk (Bulgaria – Fund IV) raised $100M in March 2022, becoming the first-ever Bulgarian unicorn.
• MENA: The MENA venture ecosystem managed to cross the $3B mark in 2022, setting a new funding record for the region fueled by mega rounds ($100M+), according to Magniit.
  • Checkout.com (UAE – Fund III) raised $1B in January 2022.
  • Foodics (Fund III), Tamara (Fund IV), TruKKer (Fund III) out of Saudi Arabia raised megarounds ($100M+) this year.
  • Grinta (Egypt – Fund IV) was ranked among the top equity deals in Q4 2022 in the country.

• AFRICA: Africa also saw its annual venture funding trend up. In 2022, funding jumped 35% YoY to reach $3.1B — a new record for the continent, led by South Africa (32%).
  • Go1 (South Africa – Fund III) raised a $100M round in June 2022 at a $2B+ valuation.
  • Flutterwave (Nigeria – Fund III) tripled its valuation to $3B in February 2022 after raising a $250M Series D.
• ASIA: Venture capital funds raised $151B in the first three quarters of 2022, exceeding any prior full-year fundraising numbers, according to PitchBook.
  • Carsome (Malaysia – Fund III) raised a $290M Series E round in January 2022 at a ~$1.7B valuation.
  • FinAccel (Indonesia – Fund IV) raised a $140M round that was ranked as one of the top 6 largest Series D rounds globally this year.

We also lead with action. In February 2022, we closed Endeavor Catalyst IV — our largest fund to date — with $292M across 400+ investors, including 100+ high-impact entrepreneurs. This brings Endeavor Catalyst’s total assets under management (“AUM”) up to $500M+ to continue investing in companies led by Endeavor Entrepreneurs globally. And although Endeavor Catalyst has been around for over a decade, it was in 2022 that we made our very first investments in Bulgaria, Ecuador, Pakistan, Ireland, and Morocco.