PitchBook: 3rd-quarter deals fell 79% in year

Rising interest rates are dampening investors’ appetite for risk, said Olaf Sakkers, a partner at RedBlue Capital, which has a stake in Zoomo, an Australian e-bike startup that’s become one of the fastest-growing e-bike companies in the world. RedBlue invested $28 million in EVage, an Indian electric light-truck company, in January.

“There’s not much capital going into startups right now,” Sakkers said at the CoMotion LA 22 mobility tech conference in November. “The reason for that is when the cost of capital goes up with inflation, the amount of capital going to risky things goes down, and startups are about as risky as it gets.”

In the third quarter of 2022, venture capital sunk $5.5 billion in mobility-related deals, a 79 percent year-over-year decline, according to data compiled by PitchBook.

Separately, funding for supply chain tech companies totaled $8.6 billion, down 40 percent compared with the third quarter of 2021, the financial data firm said.

Startups accessing venture capital funding in 2023 should find money will come with more strings attached, compared with the cheap money they were able to access in 2020 and 2021, said Jonathan Geurkink, senior analyst on PitchBook’s emerging technology research team.

Case in point: Swedish autonomous trucking company Einride’s recent $500 million raise included borrowing $300 million from Barclays Europe, and handing over stakes in the company to Swedish pension fund AMF, EQT Ventures, Northzone, Polar Structure, Norrsken VC, Temasek and other investors for the remaining $200 million.