Venture capital funding to US startups fell 55% y-o-y to USD 37 bn in 1Q 2023 as the tech slowdown continues to squeeze companies,Bloombergreports, citing research firm PitchBook and the National Venture Capital Association. Investors have cut down both the size and number of their investments as the fallout from SVB’s recent collapse compounded the troubles of an industry already grappling with rising interest rates, thousands of layoffs, and plummeting valuations.

By the numbers: The number of investments in startups dropped to a five-year low of under 3k deals in the last quarter, while exit activity — IPOs and sales to other companies — fell to USD 71.4 bn in 2022, the first figure under USD 100 bn in six years.

“The whole market is taking much more caution toward investment,” said one analyst at PitchBook. “It’s not going to be easy for companies to raise capital even if they’re growing at a pace they set in their last round.”

Also worth noting:

  • Never let a good crisis go to waste: Short sellers made their biggest monthly earnings since the 2008 financial crisis in March by taking positions against banks at the center of the recent banking crisis. Hedge funds made a total of USD 7.2 bn wagering against US and European banks amid the recent turmoil, which saw the collapse of three US lenders and almost toppled Swiss giant Credit Suisse. (Financial Times)
  • Samsung to slash chip output following earnings plunge: South Korean tech giant Samsung Electronics will make a “meaningful” cut to semiconductor production in a bid to ease a supply glut following dismal 1Q earnings that saw its operating profit plunge 96% to its lowest in 14 years. (Financial Times)

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THE CLOSING BELL-

The EGX30 fell 1.8% at Thursday’s close on turnover of EGP 1.5 bn (19% below the trailing 90-day average). Foreign investors were net sellers. The index is up 14.5% YTD.

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