Funding of US startups from venture capital funds more than halved in the first quarter compared to last year, according to Bloomberg News.
American early-stage companies raised $37 billion in venture capital in the first quarter of this year, which is the lowest amount in 13 consecutive quarters, according to figures obtained by the news agency from Morningstar-owned PitchBook and the National Venture Capital Association. The number of transactions was below 3,000 – the lowest in more than five years.
Affected by banking collapse
“The market is much more cautious when it comes to investments. It’s not going to be easy for companies to raise money, even if they grow in line with what was put forward in previous funding rounds, says venture capital analyst Kye Stanford in PitchBook to Bloomberg.
The news agency points out that the collapse of Silicon Valley Bank (SVB), the bank that offered financing solutions for a whole range of start-up companies in the US, sent shock waves that will affect the willingness to invest in the sector for several years to come.
No risk of loss
If Nordea analyst Ulrik Årdal Zürcher is to be believed, there is little risk of Norwegian banks failing due to exposure to the venture capital markets.
“We do not see any direct risk of loss for any of the Norwegian or Nordic banks on venture capital. What can happen is if the banks no longer trust each other, borrowing costs can increase, and this can affect the margins of the banks. It happened in the USA yesterday, where credit default swaps (CDS) went up a little”.
“We are not worried about the banks’ venture capital exposure, if it has an effect for Nordic banks, it is via indirect effects from higher funding costs for the entire banking system,” he told Finansavisen.
