{"id":581167,"date":"2023-02-21T00:00:00","date_gmt":"2023-02-21T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/02\/21\/vc-funding-falls-to-nine-year-low-in-4q-2022\/"},"modified":"2023-02-21T00:00:00","modified_gmt":"2023-02-21T00:00:00","slug":"vc-funding-falls-to-nine-year-low-in-4q-2022","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/02\/21\/vc-funding-falls-to-nine-year-low-in-4q-2022\/","title":{"rendered":"VC funding falls to nine-year low in 4Q 2022"},"content":{"rendered":"

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<\/span>Economic uncertainty sent fundraising by venture-capital firms plunging to a <\/span>nine-year low<\/span> in the fourth quarter of 2022, the <\/span>Wall Street Journal<\/a><\/span> <\/span>reports, citing data from investment data company Preqin. VCs raised USD 20.6 bn in new funds during the October-December period, down 65% y-o-y \u2014 the lowest fourth-quarter total since 2013. <\/span><\/p>\n

What happened?<\/span> Years of easy money had until last year enabled VCs to raise multi-bn USD funds to pour into speculative startups, but tightening financial conditions have brought this to an end. Rising borrowing costs hit tech valuations and share prices hard last year and investors are now being more cautious about where they put their money.<\/span><\/p>\n

EMs including Egypt worry World Bank\u2019s switch to climate finance could imperil <\/span>its credit rating:<\/span> Egypt is reportedly among a host of developing countries calling on the World Bank to protect its ultra-high triple-A credit rating, as the <\/span>early departure<\/a><\/span> of David Malpass ushers in a greater focus on climate finance at the multilateral lender. The G11 group of developing nations \u2014 plus other EMs including Egypt, the UAE, Qatar, Saudi Arabia and more than two dozen African countries <\/span>\u2014<\/span> said it was important to \u201cavoid measures . . . that might not be understood by rating agencies in positive light,\u201d in a note seen by the <\/span>Financial Times<\/a><\/span>. <\/span><\/p>\n

The fear:<\/span> <\/span>That the bank could make changes that allow it to take on more risk in order to invest <\/span>more in climate projects \u2014 putting it in danger of losing its exceptionally high credit rating, which allows it to offer cheap financing to poorer countries. <\/span><\/p>\n

Dubai is trying to become a regional center for hedge fund trading: <\/span>Dubai is in <\/span>negotiations with over 50 hedge funds that control more than USD 1 tn in assets to set up shop in the city, according to <\/span>Bloomberg<\/a><\/span>.<\/span> Hedge fund traders are increasingly choosing to set up in Dubai, lured in by the city's lack of taxes, ease of conducting business, and reputation as an international travel hub, as well as a convenient time zone for portfolio managers with investments spanning several continents. <\/span><\/p>\n

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