PitchBook News - Our 2023 forecasts

Looking back at US VC's swift growth in 2020 and 2021, maybe it's easy to believe that last year's retraction was foreseeable, or inevitable. But not every VC stat followed the same slowdown.

Fundraising reached a new annual high this year, surpassing 2021's figure in just three quarters.

Each of the 10 most active markets surpassed 400 deals for just the second time, despite the slower dealmaking market.

Going into 2023, the outlook for the venture market is still a bit murky.

Dry powder remains extremely high, but dealmaking has continuously slowed on a quarterly basis throughout the year. The public market looks inhospitable to VC-backed companies, yet there should be a long line of companies waiting—or needing—to go public.

We expect that 2023 will be another year of slowdown, especially regarding the top end of the venture market. Unicorns and growth-stage venture should be in for a grind, yet seed may remain resilient to some standard.

Our outlook takes a data-driven approach to see into the future. However, past results are no guarantee of future returns.

Download our free 2023 US Venture Capital Outlook.

 

We believe 2023 will be another year of transition for the private equity industry.

From outperforming public equities to underperforming in the short term.

From dominating fundraising to sharing the wealth with other private market strategies that promise more stable cash-flow streams.

From using the bank channel for large buyouts to now using non-bank direct lenders almost exclusively, or not using debt at all.

Not all trends will reverse themselves. The highly popular take-private strategy of the last two years will continue, in our view. However, we see it migrating away from mega-deals to sub-$1 billion deals.

There is an enormous overhang of companies in this strike zone as a result of the take-public craze of 2020-2021. Many are down 75% or more in price and are prime targets for a different type of take-private wave.

In lieu of leverage to augment returns, buying public companies a steep discount remains as compelling as ever.

These are some of the predictions that we make for private equity. To dive into these and more for the new year, please download our 2023 US Private Equity Outlook.