VC investment falls off a cliff - for a second time

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For the second month in a row, less than $230 million has been invested in Australian start-ups by VCs, but AirTree’s James Cameron says 2021 was the anomaly.

Venture capital investment has stabilised at less than $230 million per month in local start-ups, after falling off a second cliff in July and August, driven by a dearth of late-stage deals.

The figures from Cut Through Venture indicate start-ups raised $223.7 million in August across 32 deals, down more than 49 per cent on what was a slow month in 2021. “But I think we’re still above 2020’s numbers in terms of year-to-date [venture capital funding] and even the run rate on the last month or quarter.

Two of the country’s largest VCs, AirTree Ventures and Square Peg Capital, did not invest in any of the announced deals in August, butAdvertisement “You’ve got to remember that the Australian start-up ecosystem has grown so strongly over the last few years that even with these declines activity is still way up from just a few years ago,” he said.

The CB Insights report revealed that globally, the average deal valuation for Series B rounds was down 25 per cent in the second quarter, compared to the first three months of 2022, while Series C valuations fell 43 per cent.

 

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