Global business finance down 19% in Q2 2022: Report

?

Global project financing for startups is expected to decline 19% in the second quarter of 2022 compared to the previous quarter, amid increasing liquidity scarcity and the worldwide collapse of technology stocks, according to CB, "The State of the Project." As a result, according to the report, the number of deals is expected to reach 6,904 agreements, down 22% from the previous quarter.

Asian startups, which have raised $12.7 billion to date, will see the most significant drop, with funding expected to drop 31% this quarter. US-based startups are also likely to see lower investment, with funding expected to reach $61 billion. It will be is 13% drop from the previous quarter and the lowest in any quarter since 2020. According to the report, European startups will see a 16% drop in funding.

On Thursday, popular Silicon Valley startup accelerator Y Combinator advised founders of all of its portfolio companies to prepare for the worst and prepare for the economic downturn by cutting costs and expanding their tracks in the next 30 days.

Y Combinator said in a note that if the company plans to raise funds within the next 6 to 12 months, it could do so at the height of the recession.

"Remember that your chances of success are meager even if your company is doing well... we recommend changing your plan," the note read.

As Indian venture capitalists warn their founders of slowing funding, investors believe that strong companies will survive this winter.

?

Venture capitalists are no longer looking for a great idea. "The business fundamentals are most important: the real driver of the economy and the growth margins," said Amit Somani, Managing Partner at Prime Ventures.

He added, "The people who have been raising money largely on vanity metrics are the ones that will be looked at today...I think viable business models and viable paths to profitability will become more prominent."

?

What sectors will suffer the most?

"Fintech, digital health spaces, and retail technology are poised to see the biggest drops, with retail technology funding down 50%, an all-time high," the CB Insights report said.

Investors signed about 1,443 transactions in the fintech sector in the first quarter of 2022, which is likely to drop to 1,038 in the second quarter. She added that about 519 deals were signed in the fintech sector in the second quarter so far.

?

For retail, about 891 deals were signed in the first quarter of 2022, which is likely to drop to about 556 in the second quarter of 2022. The retail sector saw 663 deals in the first quarter, which is expected to drop to around 470 in the report added that the second quarter of 2022. The second quarter.

?

Fewer unicorns and IPOs

Meanwhile, fewer than 100 rhinos will be minted in a quarter for the first time since 2020. Only 62 startups are expected to become unicorns in the second quarter. The United States and Asia will be hardest hit, with 43% and 67% declines in new anticipated unicorns.

Also, initial public offerings are drying up as public markets remain volatile.

?

According to the report, only 92 companies are expected to go public this quarter, down 34% from the previous quarter and the lowest quarterly level in nine years.

Stay up to date with necessary technology and startup news. Subscribe to our daily newsletter to get the latest tech news that should be delivered straight to your inbox.