The global venture capital market is in a slump.

There was some hope that the potential halo effect of several long-awaited tech IPOs in the United States trading well and slowing interest rate hikes could spur VCs to be freer with their checks, but venture investment trends instead dipped, per preliminary data from PitchBook.

It isn’t entirely surprising — web3 investment is similarly not doing well. And in most of the world, it’s currently harder for startups to raise capital than it has been in years.There are exceptions as always. Venture investors love to remind anyone who will listen that good companies can always raise, which is true enough. We might add startups building in the AI realm to that subset, too, as they are raising money in a manner and speed that’s at odds with wider trends.

But it’s not all bad. Numbers are perking up from recent lows in one continent: Europe.

Today we’re going to start with the bad news and then try to find hope in Europe’s penchant for bucking trends.

Yet another quarter of declines

Venture deal volume has fallen every quarter since Q2 2022 across the world, and the trend shows no signs of reversing. Moreover, the third quarter’s decline is quite sharp if we only take into account what PitchBook refers to as “actual deal count”: Q3 2023 saw 7,434 deals compared to the previous quarter’s 9,563 deals.

But there’s always a lag in how deals are reported, so it makes sense to assume that some have flown under the radar. To address that gap, PitchBook has an estimated deal count for the last few quarters. So if we add up the actual and estimated deal counts, we find that more deals were closed in Q1 2023 than in Q4 2022, albeit by a thin margin. What doesn’t change, however, is that Q3 2023 was the second consecutive quarter in which deal counts declined. It also had the fewest deals since Q3 2020.