Both the median and average late-stage VC valuations have taken a significant hit in 2022, a quick fall after the rapid rise seen in 2021. Public market multiples have compressed, causing the extended valuations garnered in 2021 to be exposed to a less welcoming market from equity investors.

The shortage of capital is being exacerbated by the retreat of crossover investors and large nontraditional investors that have flooded VC in recent years. The largest deals in the market have been heavily reliant on capital from these investors, and now that there is less capital available, the unicorn market has all but disappeared this year.

The backup at the late stage is being further impacted by the inability of companies to exit. The trapped value at the top of the market is at risk, as more than 1,200 unicorns operate globally. While exit valuation step-ups have remained relatively strong, there has been a severe lack of exit value generated. The average public listing valuation has remained above $1 billion, but the median valuation has declined to just $317.2 million, the lowest figure in three years.

For all the turmoil at the latest stages of VC, seed and early-stage valuations have remained at the elevated levels achieved in 2021. In Q3, the median pre-money valuation for seed deals reached $10.0 million, while the median earlystage valuation came in at $45.0 million. Though there has been a slowdown in deal count at these stages, momentum from the market growth in recent years continues. The record number of closed funds and the high amount of dry powder are likely to help seed and early-stage venture much more than late-stage venture, as a high number of investors remain in their new investment period.