VC funding plummeted further in November

We may be midway through December, but there’s little evidence of holiday cheer in the latest update on venture-capital funding.

What’s new? In November, the contraction in startup funding accelerated further, with VCs investing $22 billion worldwide, per Crunchbase—less than one-third of the $70 billion invested in November 2021. That’s down 19% from the month prior, when VCs doled out $27 billion, and the lowest monthly total since February 2020.

• The same trends appeared in November as in previous months: The pullback in funding was more pronounced for later-stage companies than it was for earlier-stage startups.
• Deal count was also down significantly last month, with fewer than 2,000 startups raising a round, compared to 3,500 a year earlier.

Big picture: This year has not merely been rough for startup funding—it’s been historically rough. Through the first 11 months of the year, global deal value was down 42% year over year, per Preqin data cited by Bloomberg, a steeper contraction than what followed the dot-com bubble or the Great Recession.

Looking ahead…Some say the short-term pain of the pullback might be a long-term benefit, with tech analyst Azeem Azhar telling us recently that, among other things, it could “force investors to think much less about momentum and much more about core differentiators.”