Silicon Valley Funding News - Week of October 3, 2022. Sitetracker Raised $66M Series D

2022 is not really the year of the Tiger. It is the year of the Bear.  This week I want to explore five macro trends that will impact venture capital and technology investing long term. 

Here are a few great reads for this week:

• Trend 1 - Six Largest Nasdaq Drawdown in History - After the Dot-com crash and the global financial crisis, we are experiencing the sixth largest stock market crash in history. The tech-heavy Nasdaq 100 has dropped nearly 33% so far in 2022.  60% of all tech companies are trading below their pre-pandemic 2020 stock prices and have lost more than two years of stock price appreciation. 
  • Venture Impact:
    • Late stage startup's' valuation is greatly dampened by the recent crash. We will see more down rounds in this coming years. 
    • The Tech IPO market will also slow down in 2022-2023.

• Trend 2 - A Powerful US Dollar - The US dollar is trading at its highest levels in 20 years by growing an impressive 14% in 2022.  Why is the US dollar so strong?  The dollar being strong has contributed to a series of events by 1) fear of the growth of the global economy 2) supply chain issues with China that is still dealing with COVID 3) war in Europe which triggered an energy crisis, and 4) global inflation. The world found the dollar to be a safe haven during times of uncertainty. 
  • Venture Impact:
    • Further crypto adoption for USDC or USDT in non-US markets.
    • Make it more attractive and even cheaper for US companies to acquire non-US companies. Think FTX acquired Bitvo in Canada. 
    • Global tech distributed workforce would rather work for an American startup taking US dollar in salary than working for local companies.

• Trend 3 - Venture Boom of 2021 - US VC-backed companies raised $330B in 2021, nearly double the previous record of $166.6B raised in 2020. On top of that, US VC firms also raised a record-shattering $128.3B in 2021.
  • Venture Impact:
    • US venture investing will continue to stay strong with $128.3B needs to be deploy in the next 3 - 5 years. 
    •  US VC-backed companies will continue to stay strong with $330B of cash in the bank combined. 
• Trend 4 - Tech Layoff and Distributed Workforce - 2022 is a year of layoff.  This year, Meta, Twitter, Tesla, Shopify, Microsoft, and Netflix have all cut staff, some of them more than once. In fact, as of late-September, more than 42,000 workers in the U.S. tech sector have been laid off in mass job cuts, according to  Crunchbase.
  • Venture Impact:
    • Layoff talent will turn to starting new companies.
    • Layoff talent will turn to joining startups which raised $330B last year. 
• Trend 5 - 2022 Russian invasion of Ukraine War plus China and U.S. tensions over Taiwan and Hong Kong - On February 24, Russia invaded Ukraine that is expected to continue into 2023.  Tensions continue escalating between the U.S. House Speaker Nancy Pelosi’s visit to Taiwan in August is the most recent event that aggravated tensions between the two countries.
  • Venture Impact:
    • Russian and Ukrainian talents are migrating to countries like Israel, Spain and Lisbon. 
    • Chinese talents are migrating to countries like Singapore, United Kingdom, and UAE. 
    • More spending and support for startups focusing on cybersecurity, fintech, and Web3.

• $262M goes to 9 Enterprise startups
• $24M goes to 2 Web3/Crypto startups
• $3.2M goes to 1 FinTech startup
• $17.1M goes to 1 InsurTech startup
• $60M goes to 1 HR Tech startup
• $14M goes to 2 eCommerce startups
• $8.5M goes to 1 EdTech startup
• $10M goes to 1 Healthcare startup
• $48M goes to 2 BioTech startups
• $14.5M goes to 1 Auto Tech startup
• $40M goes to 2 Manufacturing startups
• $8M goes to 1 Hardware startup
• $138.1M goes to 3 Environment startups
• $30M goes to 1 Sustainability startup
• $12.5M goes to 1 Other startup