I usually follow SVB Bank to get an insight to the private tech market, they are a public company and claim to bank 50% of the U.S. VC-backed tech and life science companies. SVB reported their Q3’22 results last week and had some interesting insights in their earnings slides deck.
Q3’22 VC-backed investing activity declined 54% vs. Q1’21 and it looks like it’s nearing the average activity before the COVID craziness.
Cash burn has increased over 2x since pre-2021 levels and has not adjusted to the slower fundraising environment. It looks like the private companies took their time getting the memo that the party is over.
It does look like some slowing cash burn did happen in Q3’22, hopefully the next few quarters will see cash burn back to pre-2021 levels.