Despite persevering with speak a couple of possible recession, slumping tech stocks and a slowdown on the planet of startup investing, the enterprise of funding was positively buzzing final week. After slowing means down final spring, venture outfits disclosed a surprising $8 billion in new capital commitments within the span of simply 5 days.
Consider the next: NEA revealed that it closed its two latest funds including as much as $6.2 billion; Cowboy Ventures introduced two funds totaling $260 million; and FJ Labs additionally disclosed two funds totaling $260 million. Then there’s Sapphire Sport (it closed a second fund of $181 million), Volition Capital (it introduced $675 million for its fifth fund), Kearny Jackson ($14 million) and Dimension ($350 million). Even non-U.S. outfits bought into the act, together with Highland Europe, which introduced a brand new €1 billion fund, and a Japanese chemical big that exposed a $100 million fund.
So what’s happening precisely? Are we already by this downturn? While unattainable to know, the flurry of exercise possible owes itself as a substitute to some unsurprising issues.
For starters, numerous “new” funds had been truly closed final yr however not introduced for one cause or one other. Defy.vc, for instance, an early-stage venture outfit primarily based in Woodside, California, stated it’s now investing out of a $300 million third fund (in contrast with a $151 million debut fund and a $262 million sophomore fund that it closed in 2019).
Defy truly closed the fund in the course of final yr however didn’t say something till now as a result of it was actively investing its earlier fund till a number of months in the past, co-founder Neil Sequeira stated. At the time, he stated, the second didn’t appear proper.
“It was an attention-grabbing time within the Nasdaq and [regarding] world geopolitical points,” he stated, referring to the confluence of occasions that made 2022 a yr that many would sooner overlook, from Russia’s invasion of Ukraine and disrupted provide chains to surging inflation world wide.