SoftBank, Tiger Global drop out of top 20 of the world’s most active VCs

The pecking order of the world’s most active venture capital (VC) investors has changed in 2023. Two of the most deep-pocketed VC firms, SoftBank Vision Fund and Tiger Global Management, have dropped out of the top 20 list in the first quarter of the year, according to Crunchbase. Both firms “are taking a breather” and they continue to scale down investments across markets. 

Andreessen Horowitz (a16z) and General Catalyst, meanwhile, emerged as the most active and speediest lead investors in the first quarter (Q1 2023). Lightspeed Venture Partners and Sequoia Capital India were ranked 6th and 8th on the list, respectively. Both VCs have substantial investments in India.

“Notably, about half the active lead investors have slowed dealmaking compared to bubblier days a year ago. This includes Andreessen, Lightspeed Venture Partners and Sequoia Capital India. It’s the latest indication that times have changed in the VC world. We’re seeing muted activity at seed and early stage, and fewer big late-stage rounds amid a lackluster IPO market,” Crunchbase stated in its report. 

Even though the very large rounds have been few and far between in the last 15 months, Q1 saw two of the biggest capital infusions — Microsoft’s $10 billion investment in OpenAI (the maker of ChatGPT), and Stripe’s $6.5 billion fundraise led by a16z, Peter Thiel’s Founder Fund, General Catalyst, Thrive Capital, and others (even though it came at a lower valuation). 

Despite these massive rounds, global VC funding in the first quarter fell 53 per cent to $76 billion from $162 billion a year ago. “Every funding stage last quarter was down 44-54 per cent YoY, a clear signal that the slowdown is not confined to late-stage funding. Investors across each stage scaled back as they took time to assess new investment opportunities while guiding existing portfolio companies,” Crunchbase stated.

The Q1 2023 data further shows that Indian funds, including Antler, 100X.VC, and Sequoia Surge were among the top 10 most active seed-stage investors globally. This list was dominated by the usual suspects, Techstars and Y Combinator, (which recently shut down its late-stage Continuity Fund to focus on early-stage deals). 

“It’s not surprising to see seed investors staying active even as overall funding contracts. For investors at this stage, the state of the IPO market or public tech valuations aren’t an immediate concern, as their portfolio companies are likely a long way from exit,” Crunchbase explained. 

Despite this, most active seed investors reported fewer deals in Q1 2023 compared to a year ago. “The pullback is part of a broader reduction in global seed-stage investment, which fell 44 per cent YoY in Q1,” Crunchbase added.