Q3’22 Venture Pulse Report– Americas

VC investors across the Americas showed increasing caution with respect to their investment decisions in Q3’22, focusing significantly on profitability and prioritizing companies able to show clear revenue. Given the volatility and uncertainty in the market, VC investors also took more time to conduct due diligence and to assess and better understand business model sustainability and valuation pressures. This level of caution is expected to remain a staple of investor decision-making over the next few quarters.

At the end of Q3’22, total fundraising in the Americas had already surpassed 2021’s record high of $151 billion, with $156 billion in fundraising. The vast majority of this fundraising occurred in the US, although both Canada and Brazil also saw robust fundraising compared to historical norms. While fundraising was still strong, the pace of fundraising activity slowed during Q3’22—with many fund managers requiring more time to capitalize new funds than was needed in recent quarters.

VC investment in Canada and Latin America was quite subdued in Q3’22, with no VC raises greater than $100 million. The US, however, continued to attract large megadeals in a diversity of spaces, including space exploration (SpaceX - $1.9 billion), energy and ESG (TeraWatt Infrastructure - $1 billion, TerraPower - $750 million, Xpansiv - $400 million), and health and biotech (Biofourmis - $320 million). Business productivity and other B2B-focused companies also saw a healthy number of $100 million+ megadeals.

While both total VC investment and the number of VC deals declined in Canada, a wide diversity of companies attracted investments during Q3’22, including greentech company Nexii ($50 million), biotech firm AtomVie ($40 million), and real estate services company Properly ($27 million). The VC ecosystem in Canada also showed a strong geographic spread in Q3’22, with companies in Vancouver, Toronto, Calgary, Montreal, Ottawa, and others raising successful funding rounds.

The VC ecosystem in Alberta continued to evolve and grow in Q3’22 despite global market challenges—with both Edmonton and Calgary gaining ground as emerging tech hubs.

Heading into Q4’22, VC investment across the Americas is expected to remain subdued. VC investors will likely continue to focus on profitability and on companies with resilient business models given current market conditions.

Companies focused on the B2B space, particularly those able to help companies become more efficient, are expected to remain attractive to VC investors across the Americas. Investor interest in energy and ESG solutions is also expected to continue, with a growing breadth of companies attracting investments—including those focused on alternative energy production, energy storage, energy efficiency, and electric vehicles.

As larger startups in the Americas continue to layoff employees, there will likely be an influx of skilled tech talent into the available workforce. This could help alleviate some of the talent crunch for startups that have been unable to find the tech talent they need to grow or drive innovation.

Heading into Q4’22, VC investment across the Americas is expected to remain subdued. VC investors will likely continue to focus on profitability and on companies with resilient business models given current market conditions.

Companies focused on the B2B space, particularly those able to help companies become more efficient, are expected to remain attractive to VC investors across the Americas. Investor interest in energy and ESG solutions is also expected to continue, with a growing breadth of companies attracting investments—including those focused on alternative energy production, energy storage, energy efficiency, and electric vehicles.

As larger startups in the Americas continue to layoff employees, there will likely be an influx of skilled tech talent into the available workforce. This could help alleviate some of the talent crunch for startups that have been unable to find the tech talent they need to grow or drive innovation.