As startups shed fat, investors turn optimistic about deploying capital

VENTURE capitalists (VCs) are ending 2022 with plenty of capital, but they are in no rush to deploy it. With so many startups right-sizing their operations and adjusting their fundraising expectations, investors are now looking forward to quality opportunities in 2023.

“I will say this is a very good time to step up our due diligence, start seriously looking at some of the deals and be ready to deploy in the first half of the year,” said Chik Wai Chiew, chief executive at private equity and VC firm Heritas Capital.

A funding frenzy in 2021 gave way to a more sobering 2022. Globally, some US$369 billion was raised by startups in the first three quarters of 2022. This was slightly over half of the US$679.4 billion raised in 2021, according to data platform Crunchbase.