Intelligent Investment

Tech Sector Attracted Bulk of U.S. Venture Capital Funding Last Year

March 10, 2023 3 Minute Read

Tech was far and away the dominant industry for venture capital funding in 2022 with a 64% share of the $176 billion annual total.

Although economic uncertainty, layoffs and tight financial conditions were contributing factors to a 38% drop in total venture capital funding from 2021, last year’s total was the second highest on record. Nearly all of 2022’s decline occurred during the second half of the year when large mega-funding rounds of $50 million or more plummeted. Small (<$10 million) and medium-sized ($10 million to $50 million) funding deals declined by only 4% and 8%, respectively, from record highs in 2021.

Figure 1: U.S. Venture Capital Funding by Industry

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Source: CB Insights and CBRE Research, March 2023.
*Includes manufacturing, business and financial services, aerospace and defense.

San Francisco Bay Area tech firms had the highest volume of small deals in 2022 at $2.3 billion, down by 25% from 2021. New York firms attracted $1.8 billion, down by only 3% from the prior year. Detroit, Miami, Columbus, Tampa and Denver had the highest annual small-deal volume growth in 2022.

For medium-sized deals, Bay Area tech firms attracted $12.5 billion, followed by New York firms with $5.4 billion—both substantially less than 2021. Salt Lake City, Pittsburgh, Philadelphia, Portland and Miami had the highest year-over-year funding volume growth in medium-sized deals.

Steady volume of small and medium-sized venture capital deals is a key driver of future innovation, job growth and commercial real estate demand.

Figure 2: Top 10 U.S. Metros for Technology Industry Venture Capital $ Volume Growth by Deal Size, 2021 to 2022*

Image of bar graph

Source: CB Insights and CBRE Research, March 2023.
*Analysis includes the 25 highest volume metros for small and medium sized deals.

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