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The venture capital investment market size is estimated to decline at a CAGR of 20.88% between 2022 and 2027. The market size is forecast to increase by USD 737.56 billion. The growth of the market hinges on multiple factors, including the increasing VC investment in biotech and remote working software companies, the growing demand for high potential returns, and growing globalization and cross-border investments.
This venture capital investment market report extensively covers market segmentation by sector (software, pharmaceutical and biotechnology, media and entertainment, medical devices and equipment, and IT services and others), type (first-time venture funding and follow-on venture funding), and geography (North America, APAC, Europe, South America, and Middle East and Africa).
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market. The Accel company invests in the software development industries and invests in internet technology and software development industries. It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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Venture capital (VC) is a type of finance source for new businesses or startups with limited funds. Venture capital investment is a pooled investment fund that manages the capital of investors who are looking for private equity investments in startups and small and medium-sized entrepreneurs (SMEs) with high growth prospects. These investments are often described as high-growth/high-risk investments.
The increasing VC investment in biotech and remote working software companies is driving market growth. The COVID-19 outbreak resulted in the declining growth of numerous industries which resulted in reduced demand for venture capital investment services. However, the emphasis on the medical industry, especially the biotechnology sector to develop effective drugs for vaccination resulted in increasing investment in these industries.
For instance, around 448 venture financing rounds were registered for biopharma companies in 2020. Moreover, another characteristic noticed was that venture capitalists recognized the shift towards remote work, especially in IT companies, and invested in such facilities and services. Hence the trend of capitalists investing in growing industries like biotech and remote working software is expected to further boost the growth of the market during the forecast period.
The rising number of high-net-worth individuals (HNWIs) globally is a key trend in the market. HNWIs, having a net worth equal to or greater than USD 1 million, offer special services including investment in reputable private equity and hedge funds. They also offer opportunities to be a part of pre-IPO placements and pre-ICO sales of any venture. Due to possessing large investment and wealth portfolios, these individuals require the experienced services of wealth managers or wealth advisors for efficient finance allocation. These wealth managers help them to manage their portfolios, and also carry out functions like asset protection, and tax management.
Moreover, wealth management companies offer other financial services such as financial planning, and investment monitoring to HNWIs. These companies help create efficient financial plans for HNWI clients by working closely with them and understanding their financial goals. They also offer comprehensive portfolio advisory investment services to HNWI clients. Hence such factors will drive market growth during the forecast period.
Foreign exchange volatility is challenging market growth. Corporations engaging in transactions across countries face transaction risks due to conducting transactions in a foreign currency. For example, a corporation established in Canada that does business in China is subject to foreign exchange risks because it accepts financial transactions in the Chinese Yuan and presents its financial statements in Canadian Dollars.
Moreover, this risk occurs due to the potential for the currency rate to fluctuate prior to the completion of the transaction. Essentially the source of such transaction risks is the duration between a transaction and a settlement. Moreover, if the currency or underlying index has gone down relative to the dollar, it will lead to a loss. Such transaction risks may hinder the growth of the market in focus during the forecast period.
The software segment is estimated to witness significant growth during the forecast period. This industry comprises the development, distribution, and maintenance of software products and services. It can be divided into the following types - application software; system infrastructure software; software as a service (SaaS); operating systems; database software; and analytics software. Moreover, venture capital firms have particularly increased investment in software that is transforming industries including Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), CloudTech, and DevOps. In fact, total investments by venture capitalists in this software exceeded several billion dollars, with few of them being valued at more than a billion dollars and being classified as Unicorns.
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The software segment was the largest segment and was valued at USD 105.08 billion in 2017. Moreover, there was a greater number of software startups in 2020 with estimates of about 75,000 startup firms in the US. India also witnessed the emergence of 1,300 startup firms that will contribute towards the growth of this segment of the global venture capital investment market during the forecast period.
North America is estimated to contribute 43% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The North American venture capital investment market is predicted to grow further due to the increasing number of SMEs. For example, an estimate of about 33.2 million SMEs were present in the US until 2022. SMEs especially choose to finance with reduced credibility for the growth of their business. Hence this trend will result in further growth of the venture capital investment market in the region during the forecast period
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In COVID-19 outbreak negatively impacted the regional venture capital investment market due to numerous SMEs and large enterprises shutting down their operations. Numerous capital venture firms and individual venture capitalists hesitated to further invest in industries, which hampered the growth of the regional market. However, the growth potential of pharmaceutical and biopharma companies that were investing in developing COVID-19 vaccines resulted in increased venture capital investment in this sector. Moreover, after development, large vaccination drives were conducted which helped limit the spread of the disease and resulted in the easing of restrictions. This resulted in numerous businesses and industries resuming operations which also caused further venture capital investment. Hence such factors will boost the growth of the market during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Venture Capital Investment Market Customer Landscape
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The venture capital investment market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Venture Capital Investment Market Scope |
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Report Coverage |
Details |
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Page number |
149 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Decelerate at a CAGR of 20.88% |
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Market growth 2023-2027 |
USD 737.56 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
24.15 |
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Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
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Performing market contribution |
North America at 43% |
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Key countries |
US, China, India, UK, and Germany |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Accel, Agoranov, AH Capital Management LLC, Balderton Capital UK LLP, Battery Ventures, Caixa Capital Risc SGEIC S.A., Cherry Ventures Management GmbH, Eurazeo, First Round Capital, GGV Capital, Greylock Partners, Hoxton Ventures LLP, Index Ventures UK LLP, Lakestar Advisors GmbH, Seedcamp Investment Management LLP, Sequoia Capital Operations LLC, Target Global, Union Square Ventures, Bessemer Venture Partners, and Founders Fund |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Sector
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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