Corporate VCs, other nontraditional investors pullback in Q1

In the first three months of 2022, nontraditional investors, also referred to as “tourist investors,” participated in $52.5 billion worth of deal value, less than in any quarter of last year, according to the latest PitchBook-NVCA Venture Monitor.

That comes after a number of years in which corporate venture arms, hedge funds, private equity firms and other nontraditional investors have rushed into venture capital (VC). The PitchBook-NVCA Venture Monitor reported that participation by those enterprises reached over 78 percent of total U.S. VC deal value in 2021.

Now, many of these investors – especially crossover firms that invest in public and private companies – are starting to retreat from VC-backed start-ups amid high stock market volatility and increasing interest rates. The report also noted that private equity firms as well as asset managers like hedge funds showed the highest pullback from VC, as measured by their participation rate in VC deals by value.

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