PitchBook, the premier data provider for the private and public equity markets, released findings from a new survey released in partnership with Web Summit, the world’s largest technology conference which took place November 13-17, 2023 at Altice Arena in Lisbon, Portugal.
The survey was completed by 111 global venture capital (VC) investors attending the conference. Globally, venture capital investment activity has slowed with $247.2 billion invested through the end of the third quarter, down from $439.9 billion in the same period of 2022. Exits remain difficult to come back, applying pressure to the dealmaking environment and slow fundraising is in large part due to exit markets returning little in the way of gains back to VCs and LPs.
Investor interest in AI/ML has continued, with 62.2% of respondents indicating AI/ML has the potential to be most disruptive in the next five to ten years. When it comes to investing in these AI/ML technologies, 75.8% of investors surveyed have made at least one investment in AI companies in the last eighteen months and 7.2% have made at least six investments in the space. Almost one-third (30%) of investors said they regularly use AI and data analytics when reviewing investment opportunities. Another 36.4% indicated that while they are not currently using AI and data analytics in the investment review process, they plan to integrate both in the review process in the next 1-2 years.
Majority of investors say geopolitical events (71.1%) and rising interest rates (72.9%) have little to no impact on their investment strategies. However, 63.1% say environmental impact affects their decision when assessing an investment opportunity and they would not invest if there would be a negative impact. Looking at the mix of new and follow-on investments in existing funds, 91.8% of investors said at least half of their fund was for new investments, up from 82% at Web Summit a year ago.
Women in VC
Over half of investors surveyed (58.6%) reported 25% of their investments made in the last 18 months were to women-led startups. Investors also reported fewer women in senior management positions at their firms, dropping to 66.7% from 75% at Web Summit 2022.
Nearly three-quarters of investors (71.1%) claim they have increased hiring or are actively exploring ways to increase representation of women and marginalized communities at the firm-level and within portfolio companies, while 20.7% report it is not an area of focus at this time. However, only 43.2% of investors said they have increased the representation of women within their firm and portfolio companies.