PitchBook tracks Q2 2022’s early-stage investment trends

PitchBook’s Emerging Technology Indicator (ETI) report provides a thorough analysis of the most exciting and disruptive technologies pushing growth opportunities, while tracking a limited set of startups receiving seed and early-stage investment from top VC firms.

Throughout the report, ETI deals will refer to investment deals from top VC firms into disruptive seed or early-stage companies.

In its most recent ETI report, PitchBook tracks 195 early and seed stage deals involving the top 15 venture capital firms across this year’s second quarter, based on a total 5,941 early and seed stage VC deals.

The top VC firms are identified by PitchBook on a quarter-by-quarter basis relative to the success of their investments, with regards to the number of exits and valuations completed.

According to this quarter’s analysis, top VC deal activity into early-stage companies has been on the decline to $5.1 billion, a decrease from $8.3 billion in Q1 2022 and a 52% cut from Q4 2021’s high fo $10.6 billion.

The actual number of deals remained above the average of 167 deals, at 195 this quarter, but still remains much fewer than the 255 deals in Q1 2022.

PitchBook recorded 10 ETI deals worth over $100 million in Q2 2022, a notable decrease from 23 in Q1 and 24 in Q4 2021, yet still above the average of 5.Comparably, deals worth over $50 million shrunk to 26 from 43 and 54 in the two quarters prior, respectively, but again above the average of 14.

The top 3 deals of the quarter were made up of a $350 million Series B round for Wonder, a mobile restaurant startup, a $260 million Series A round for Inflection, an AI startup innovating human to machine communications, and a $175 million Series A round for Lightspark, a Web3 company with a focus on increasing the accessibility and user-friendliness of Bitcoin’s lightning network.

ETI deal activity amounted to 11.5% of the all seed and early-stage VC funding this quarter, a decline relative to the 14.1% in Q1 and coming close to the historical average of 10%.

This quarter, PitchBook tracked ETI deals throughout 29 various technology sectors, with Web3 and DeFi being the most prominent areas of investment, accumulating a huge $874 million across 24 deals, and DevOps, developers and operations delivering secure software, following with $654 million across 21 deals.

Focusing on trends on an aggregate basis over the last four quarters, Web3 & DeFi funding projects have far outvalued and outnumbered other sectors of investment, including Fintech, DevOps and AI & ML.

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