Venture capital, once synonymous with the bustling innovation hub of Silicon Valley, is now experiencing a shift in focus towards emerging markets.
Despite the challenging global VC market performance in 2023, characterized by a sharp decline in investment levels, opportunities abound beyond traditional investment landscapes. Let's delve into how these facts and figures intertwine with the burgeoning venture capital scene in emerging markets with expert Fiorenzo Manganiello.
Fiorenzo Manganiello is a seasoned entrepreneur and brings a wealth of expertise to the venture capital landscape. As the Managing Partner of LIAN Group, a venture capital firm specializing in technology-driven disruptions, he pioneers investments in companies poised to reshape traditional industries.
His accolades, including being awarded Blockchain Expert Switzerland for 2018, underscore his commitment to driving innovation and fostering entrepreneurship. A multilingual communicator fluent in six languages, Manganiello's insights have garnered attention from leading media outlets such as CNBC, CNN, and Forbes, where he contributes as a thought leader in the realm of venture capital and technology.
The rise of emerging markets despite global challenges
Fiorenzo explained, “Despite a 35% year-over-year decrease in VC investment levels compared to 2022, emerging markets are proving resilient. In 2023, VC-backed startups globally raised just over $140 billion, with $31.7 billion raised in Q4 2023.”
While VC fund formation dropped by 62% in 2023, an uptick in Q4 signals a potential rebound, especially in regions with favorable investment climates, Fiorenzo indicated.
Navigating deal trends in emerging markets
Mega-round financing declined significantly globally, with only 50 mega deals recorded in Q4 and 228 in total for 2023, the lowest total since 2017. However, in emerging markets, Series A investments saw a 9% increase quarter-over-quarter, indicating growing confidence in early-stage opportunities. Moreover, while nearly all fund classes experienced a downturn globally, emerging markets present sectors like energy with promising signs of growth, alongside stalwarts like information technology and healthcare.
Regional dynamics and opportunities
In the global landscape, traditional VC strongholds like the San Francisco Bay Area continued to lead in Q4, followed closely by Boston and New York. However, emerging regions are carving out their niches, with promising ecosystems burgeoning in areas like Southeast Asia, Latin America, and Africa. These regions present unique opportunities for investors looking to diversify their portfolios and tap into high-growth markets outside conventional hubs.
Seizing the opportunities beyond Silicon Valley
As the spotlight shifts towards emerging markets, venture capital firms and entrepreneurs alike are embracing new frontiers of innovation and growth. While challenges persist, the untapped potential, favorable demographics, and supportive ecosystems in these regions offer a compelling proposition for investors seeking long-term returns. By venturing beyond traditional boundaries, investors can unlock a world of opportunities and contribute to the global expansion of innovation and entrepreneurship.
The LIAN Group, led by Fiorenzo Manganiello and Nessim-Sariel Gaon, is reshaping venture capital with its focus on disruptive technologies and innovative investment strategies. Their recent investments in companies like Alkira and Alto underscore their success. Fiorenzo Manganiello is actively engaged in multiple leadership roles across various companies. He serves as a Director and Board Member at LaCollection. Additionally, he has held the position of Founder at Cowa Ventures since September 2020. Manganiello also contributes his expertise as a professor at Geneva Business School since January 2018.
