There are still opportunities in VC firms despite a drop in funding, says 500 Global
Raw Text
Skip Navigation
Markets
Pre-Markets
U.S. Markets
Europe Markets
China Markets
Asia Markets
World Markets
Currencies
Cryptocurrency
Futures & Commodities
Bonds
Funds & ETFs
Business
Economy
Finance
Health & Science
Media
Real Estate
Energy
Climate
Transportation
Industrials
Retail
Wealth
Life
Small Business
Investing
Personal Finance
Fintech
Financial Advisors
Options Action
ETF Street
Buffett Archive
Earnings
Trader Talk
Tech
Cybersecurity
Enterprise
Internet
Media
Mobile
Social Media
CNBC Disruptor 50
Tech Guide
Politics
White House
Policy
Defense
Congress
Equity and Opportunity
Europe Politics
China Politics
Asia Politics
World Politics
CNBC TV
Live Audio
Latest Video
Top Video
CEO Interviews
Europe TV
Asia TV
CNBC Podcasts
Digital Originals
Watchlist
Investing Club
Trust Portfolio
Analysis
Trade Alerts
Video
Homestretch
Education
PRO
Pro News
Pro Live
Subscribe
Sign In
Menu
Make It
Select
USA
INTL
Search quotes, news & videos
Watchlist
SIGN IN
Create free account
Markets
Business
Investing
Tech
Politics
CNBC TV
Watchlist
Investing Club
PRO
Menu
Venture Capital
Sheila Chiang
WATCH LIVE
Global venture funding dropped by 35% in 2022, but venture capital firm 500 Global remains bullish.
"Now that there has been a switch or transition to a different way of doing business, a different modality, we are switching playbooks again," said Vishal Harnal, managing partner at 500 Global.
The global VC firm invests in early-stage tech companies and manages more than $2.7 billion in assets.
watch now
VIDEO
2:10
02:10
Squawk Box Asia
Global venture capital firm 500 Global is bullish on the VC sector, even as venture funding took a hit in 2022 as economic uncertainties loomed.
"There is definitely a drop in the allocation towards ventures this year, but it really depends on which markets you are investing in, and what the opportunities set in those markets are," said Vishal Harnal, managing partner of 500 Global, on CNBC's " Squawk Box Asia " Monday.
related investing news
This fund is trouncing the S&P 500 by focusing on international stocks
Alex Harring
According to data compiled by Crunchbase, global venture funding in 2022 totaled $445 billion — lower by 35% compared to the previous year.
"But I wouldn't go so far as to say that there is a funding winter," Harnal told CNBC's Martin Soong and Sri Jegarajah.
The firm manages more than $2.7 billion in assets. Some of the startups they invested in during their early stages include Australian graphic design software Canva , Southeast Asia's ride-hailing firm Grab and Indonesian fish farming tech startup eFishery . Grab has since listed on the Nasdaq.
Harnal said entrepreneurs have gotten used to getting cheap capital in the last decade. "That has funded certain types of behaviors," he said.
Startups are mostly unprofitable, as they prioritize growth over profitability in the initial years, which usually translates into burning cash.
Now that there has been a switch or transition to a different way of doing business, a different modality, we are switching playbooks again. Vishal Harnal managing partner, 500 Global
However, with global economic headwinds slowing growth, startups have been forced to renew their focus on profitability and be more cost-efficient.
"Now that there has been a switch or transition to a different way of doing business, a different modality, we are switching playbooks again," said Harnal.
There is currently an unprecedented amount of "dry powder" of $15 billion in venture capital, especially in Southeast Asia, he said, referring to cash reserves for deployment when needed.
"The question we ask ourselves as investors is that, is that capital enough to tide companies over whatever we are seeing right now for the next two to three years? What are the opportunities that present themselves during times like this?" asked Harnal.
Read more about tech and crypto from CNBC Pro
Morgan Stanley's favorite stocks to play the $6 trillion A.I. internet opportunity
'Data is the new oil': Investor picks one stock to play the trend
Morgan Stanley sees Apple rallying 20%, says investors should look past near-term headwinds
Harnal gave the example of how opportunities in a bear market playbook differ from one for a bull market.
"That changes the way capital flows into venture capital funds so there may be less capital coming from non-institutional investors that aren't used to investing in ventures," he said.
But long-time VCs remain bullish toward investing in tech companies.
"For institutional investors who have decades-long experience investing in VCs but have done it across market cycles before, that capital allocation really isn't shrinking," said Harnal.
watch now
VIDEO
20:34
20:34
Beyond the Valley Podcast
He added that private valuations, such as venture capital valuations, are underwritten with a far longer term time horizon and VCs are less affected by daily news cycles or companies' financial results.
"We are taking a much longer term view on technology, which takes a while to adopt," said Harnal.
"While there has been a drop [in private valuations], it is nowhere close to what you are seeing in the public markets."
TV
WATCH LIVE
WATCH IN THE APP
UP NEXT | ET
Listen
TV
WATCH LIVE
WATCH IN THE APP
UP NEXT | ET
Listen
Subscribe to CNBC PRO
Licensing & Reprints
CNBC Councils
Supply Chain Values
CNBC on Peacock
Join the CNBC Panel
Digital Products
News Releases
Closed Captioning
Corrections
About CNBC
Internships
Site Map
Ad Choices
Careers
Help
Contact
News Tips
Got a confidential news tip? We want to hear from you.
Get In Touch
Advertise With Us
Please Contact Us
CNBC Newsletters
Sign up for free newsletters and get more CNBC delivered to your inbox
Sign Up Now
Get this delivered to your inbox, and more info about our products and services.
Privacy Policy
|
Do Not Sell My Personal Information
|
CA Notice
|
Terms of Service
© 2023 CNBC LLC. All Rights Reserved. A Division of NBCUniversal
Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.
Market Data Terms of Use and Disclaimers
Data also provided by
Single Line Text
Skip Navigation. Markets. Pre-Markets. U.S. Markets. Europe Markets. China Markets. Asia Markets. World Markets. Currencies. Cryptocurrency. Futures & Commodities. Bonds. Funds & ETFs. Business. Economy. Finance. Health & Science. Media. Real Estate. Energy. Climate. Transportation. Industrials. Retail. Wealth. Life. Small Business. Investing. Personal Finance. Fintech. Financial Advisors. Options Action. ETF Street. Buffett Archive. Earnings. Trader Talk. Tech. Cybersecurity. Enterprise. Internet. Media. Mobile. Social Media. CNBC Disruptor 50. Tech Guide. Politics. White House. Policy. Defense. Congress. Equity and Opportunity. Europe Politics. China Politics. Asia Politics. World Politics. CNBC TV. Live Audio. Latest Video. Top Video. CEO Interviews. Europe TV. Asia TV. CNBC Podcasts. Digital Originals. Watchlist. Investing Club. Trust Portfolio. Analysis. Trade Alerts. Video. Homestretch. Education. PRO. Pro News. Pro Live. Subscribe. Sign In. Menu. Make It. Select. USA. INTL. Search quotes, news & videos. Watchlist. SIGN IN. Create free account. Markets. Business. Investing. Tech. Politics. CNBC TV. Watchlist. Investing Club. PRO. Menu. Venture Capital. Sheila Chiang. WATCH LIVE. Global venture funding dropped by 35% in 2022, but venture capital firm 500 Global remains bullish. "Now that there has been a switch or transition to a different way of doing business, a different modality, we are switching playbooks again," said Vishal Harnal, managing partner at 500 Global. The global VC firm invests in early-stage tech companies and manages more than $2.7 billion in assets. watch now. VIDEO. 2:10. 02:10. Squawk Box Asia. Global venture capital firm 500 Global is bullish on the VC sector, even as venture funding took a hit in 2022 as economic uncertainties loomed. "There is definitely a drop in the allocation towards ventures this year, but it really depends on which markets you are investing in, and what the opportunities set in those markets are," said Vishal Harnal, managing partner of 500 Global, on CNBC's " Squawk Box Asia " Monday. related investing news. This fund is trouncing the S&P 500 by focusing on international stocks. Alex Harring. According to data compiled by Crunchbase, global venture funding in 2022 totaled $445 billion — lower by 35% compared to the previous year. "But I wouldn't go so far as to say that there is a funding winter," Harnal told CNBC's Martin Soong and Sri Jegarajah. The firm manages more than $2.7 billion in assets. Some of the startups they invested in during their early stages include Australian graphic design software Canva , Southeast Asia's ride-hailing firm Grab and Indonesian fish farming tech startup eFishery . Grab has since listed on the Nasdaq. Harnal said entrepreneurs have gotten used to getting cheap capital in the last decade. "That has funded certain types of behaviors," he said. Startups are mostly unprofitable, as they prioritize growth over profitability in the initial years, which usually translates into burning cash. Now that there has been a switch or transition to a different way of doing business, a different modality, we are switching playbooks again. Vishal Harnal managing partner, 500 Global. However, with global economic headwinds slowing growth, startups have been forced to renew their focus on profitability and be more cost-efficient. "Now that there has been a switch or transition to a different way of doing business, a different modality, we are switching playbooks again," said Harnal. There is currently an unprecedented amount of "dry powder" of $15 billion in venture capital, especially in Southeast Asia, he said, referring to cash reserves for deployment when needed. "The question we ask ourselves as investors is that, is that capital enough to tide companies over whatever we are seeing right now for the next two to three years? What are the opportunities that present themselves during times like this?" asked Harnal. Read more about tech and crypto from CNBC Pro. Morgan Stanley's favorite stocks to play the $6 trillion A.I. internet opportunity. 'Data is the new oil': Investor picks one stock to play the trend. Morgan Stanley sees Apple rallying 20%, says investors should look past near-term headwinds. Harnal gave the example of how opportunities in a bear market playbook differ from one for a bull market. "That changes the way capital flows into venture capital funds so there may be less capital coming from non-institutional investors that aren't used to investing in ventures," he said. But long-time VCs remain bullish toward investing in tech companies. "For institutional investors who have decades-long experience investing in VCs but have done it across market cycles before, that capital allocation really isn't shrinking," said Harnal. watch now. VIDEO. 20:34. 20:34. Beyond the Valley Podcast. He added that private valuations, such as venture capital valuations, are underwritten with a far longer term time horizon and VCs are less affected by daily news cycles or companies' financial results. "We are taking a much longer term view on technology, which takes a while to adopt," said Harnal. "While there has been a drop [in private valuations], it is nowhere close to what you are seeing in the public markets." TV. WATCH LIVE. WATCH IN THE APP. UP NEXT | ET. Listen. TV. WATCH LIVE. WATCH IN THE APP. UP NEXT | ET. Listen. Subscribe to CNBC PRO. Licensing & Reprints. CNBC Councils. Supply Chain Values. CNBC on Peacock. Join the CNBC Panel. Digital Products. News Releases. Closed Captioning. Corrections. About CNBC. Internships. Site Map. Ad Choices. Careers. Help. Contact. News Tips. Got a confidential news tip? We want to hear from you. Get In Touch. Advertise With Us. Please Contact Us. CNBC Newsletters. Sign up for free newsletters and get more CNBC delivered to your inbox. Sign Up Now. Get this delivered to your inbox, and more info about our products and services. Privacy Policy. |. Do Not Sell My Personal Information. |. CA Notice. |. Terms of Service. © 2023 CNBC LLC. All Rights Reserved. A Division of NBCUniversal. Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Market Data Terms of Use and Disclaimers. Data also provided by.