Venture Capital Investment Market

Market Overview 2023-2028:

The global venture capital investment market size reached US$ 233.9 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 708.6 Billion by 2028, exhibiting a growth rate (CAGR) of 21.75% during 2023-2028. The rising number of startups around the world, increasing networking and collaboration opportunities provided by venture capital investors, and the growing investment activities in diverse industry verticals represent some of the key factors driving the market.

Increasing Integration of Technologically Advanced Algorithms and Machine Learning Fostering Market Growth

At present, the rising utilization of various technologically advanced algorithms, as they assist investors with various useful features to detect market gaps and keep up with general trends, is propelling the growth of the venture capital investment market. In addition, it assists in enhancing portfolio management performance, matching prospective co-investors and deals, and identifying various potential acquirers. Furthermore, the growing utilization of machine learning (ML) in the venture capitalizing industry provides several opportunities to improve venture investment activities and stay more compliant during the post-investment phase when venture capitalists are required to assist and guide the companies to grow efficiently.

Competitive analysis such as market structure, market share by key players, player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided. The market structure is fragmented due to the presence of many global and regional players and the presence of a limited number of barriers in the market. The volume of new entrants in the venture capital investment market is moderate due to low switching costs and product differentiation and the requirement for high initial capital.

What is Venture Capital Investment?

Venture capital investment is defined as an at-risk equity investment that enables investors to acquire equities of companies with perceived long-term growth potential. It relies on technical or managerial expertise to increase the growth of small startups and improve the operational efficiency of employees. It is provided by well-off investors, investment banks, and various other financial institutions to companies and startups with exceptional growth potential or organizations that have displayed rapid development and are inclined towards expansion strategies. It is specifically designed to provide financial assistance and guidance to emerging businesses that are in search of substantial funds for initiating their business operations, unlike private equity deals and bank deals, which tend to fund large and established companies. It also helps various small-sized businesses to gain business and institutional knowledge to amplify their sales and make correct decisions. Furthermore, as venture capital investment provides capital to businesses to bootstrap their operations and equity to investors, its demand is increasing around the world.

COVID-19 Impact:

The outbreak of COVID-19 significantly impacted the venture capital investment market. The uncertainty created by the trajectory of the pandemic, along with the global economic slowdown, negatively impacted the stock returns, leading to a more cautious investment approach and a reduction in the availability of capital in many sectors. The pandemic also severely impacted the seed and early-stage companies that are still finding their product market fit. It weeded out various weak companies as they did not have the capital to sustain the losses and continue their operations strategically. Overall, the pandemic has not been significantly effective in destroying the growth of the venture capital investment market as companies started implementing new and advanced measures to adapt to the new normal and various industries experienced enhanced growth during the pandemic, such as healthcare, education, and telecommunication.

Venture Capital Investment Market Trends:

At present, the increasing demand for venture capital investments, as they provide above-average returns to businesses, represents one of the primary factors influencing the market positively. Besides this, the rising number of startups around the world due to the availability of e-commerce platforms and cloud computing is propelling the growth of the market. In addition, the growing adoption of venture capital investments, as they require no monthly payments and provide efficient risk management knowledge and expertise, is offering a favorable market outlook. Apart from this, the increasing networking and collaboration opportunities provided by venture capital investors to inexperienced entrepreneurs are contributing to the growth of the market. Furthermore, rising investment activities in diverse industry verticals are bolstering the growth of the market.

Key Market Segmentation:

IMARC Group provides an analysis of the key trends in each sub-segment of the global venture capital investment market report, along with forecasts at the global and regional level from 2023-2028. Our report has categorized the market based on sector, fund size and funding type.

Sector Insights:

• Software
• Pharma and Biotech
• Media and Entertainment
• Medical Devices and Equipment
• Medical Services and Systems
• IT Hardware
• IT Services and Telecommunication
• Consumer Goods and Recreation
• Energy
• Others
   

The report has provided a detailed breakup and analysis of the venture capital investment market based on the sector. This includes software, pharma and biotech, media and entertainment, medical devices and equipment, medical services and systems, IT hardware, IT services and telecommunication, consumer goods and recreation, energy, and others. According to the report, software represented the largest segment due to the rising number of high-tech companies around the world. In addition, the increasing adoption of remote working models is contributing to the growth of the respective segment.

Fund Size Insights:

• Under $50 M
• $50 M to $100 M
• $100 M to $250 M
• $250 M to $500 M
• $500 M to $1 B
• Above $1 B
   

A detailed breakup and analysis of the venture capital investment market based on the fund size has also been provided in the report. This includes under $50 M, $50 M to $100 M, $100 M to $250 M, $250 M to $500 M, $500 M to $1 B, and above $1 B. According to the report, $500 M to $1 B accounted for the largest market share as it is gaining traction in different sectors, such as construction, energy, and defense. In addition, the thriving coworking sector providing a home for start-ups and small shops to fulfil space requirements is bolstering the market growth.

Funding Type Insights:

• First-Time Venture Funding
• Follow-on Venture Funding
   

A detailed breakup and analysis of the venture capital investment market based on the funding type has also been provided in the report. This includes first-time venture funding and follow-on venture funding. According to the report, follow-on venture funding accounted for the largest market share on account of the increasing innovation and development in existing companies to improve operational efficiency. Additionally, the rising implementation of follow-on venture funding to protect original investment and ownership of investors is strengthening the growth of the respective segment.

Regional Insights:

• North America
• Asia-Pacific
• Europe
• Others
   

The report has also provided a comprehensive analysis of all the major regional markets, which include North America, Asia-Pacific, Europe, and others. According to the report, North America was the largest market for venture capital investment. Some of the factors driving the North America venture capital investment market included the rising number of software service providers for remote working purposes, increasing investments made by investors in hi-tech companies and software-as-a-service (SaaS) providers, the growing presence of financial technology start-ups and acceleration of digital trends in healthcare business services and edtech boosting the lending business and upgrade in the payment arenas.

Competitive Landscape:

The report has also provided a comprehensive analysis of the competitive landscape in the global venture capital investment market. Some of the companies covered in the report include:

• Accel
• Andreessen Horowitz
• Benchmark
• Bessemer Venture Partners
• First Round Capital LLC
• Founders Fund LLC
• Ggv Management L.L.C.
• Index Ventures
• Sequoia Capital Operations LLC
• Union Square Ventures LLC
   

Please note that this only represents a partial list of companies, and the complete list has been provided in the report.

Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the venture capital investment market from 2017-2028.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global venture capital investment market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the venture capital investment industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.