After a period of record global deal activity in 2021, the venture capital market took a step back in 2022 with a number of financial sponsors pressing pause on investments. Asia was no exception to the challenging venture capital market last year.
Whilst retractions in valuations have been felt most across late stage companies, early stage companies are expected to be put under relatively more pressure in the coming months as cash runways are stretched. Various macro headwinds, in addition to the recent Silicon Valley Bank, Silvergate and Signature headlines, are creating further challenges for fundraising.
In this regional market overview, we provide (1) a general market overview; (2) an outline of 10 key Asia venture capital emerging themes in 2023; and (3) a summary of key deal terms across (a) preferred equity; (b) convertible notes; and (c) SAFE instruments.