As total VC dollars and deals have declined, investors have retreated from backing the late-stage companies that are most exposed to public market volatility.This broad trend has cut the median late-stage deal size (down 30% in 2022 YTD compared to full-year 2021) and the number of $100M+ mega-rounds (down 31% QoQ in Q2’22), said the report.
A tighter funding environment — where investors are not competing as intensely for access to deals — means there will be fewer deals at the unicorn level, making it harder for any given company to achieve a valuation north of $1B, the report added.