The number of venture capital (VC) funding deals announced in the artificial intelligence (AI) space within the Asia-Pacific (APAC) region declined by 5.3% in 2022 compared to the previous year, while the corresponding deals value was down by a massive 46.5% to $12.3 billion, reveals GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Financial Deals Database reveals that a total of 1,022 APAC- based AI startups participated in 1,087 VC funding deals during 2022.
Aurojyoti Bose, Lead Analyst at GlobalData, comments: “VC funding activity in the AI space globally suffered setback in 2022 compared to the previous year with the impact significantly prominent in terms of deal value. The VC funding activity in the APAC AI is in line with the global year-on-year (YoY) trend.”
Deal volume in the APAC AI space experienced a fluctuating quarter-on-quarter (QoQ) trend throughout 2021 and showcased a consistent declining trend in 2022 for three straight quarters through Q4. Meanwhile, deal value continued to decline for the seventh straight quarter through Q4 2022.
Bose explains: “The QoQ trend for the APAC region is in stark contrast to the global trend wherein there was a rebound in both VC funding deal volume and value in Q4 2022.”
China, which is the top APAC market, witnessed decline in both VC funding deal volume as well as value in 2022 compared to the previous year. In fact, most of the key markets across the region registered decline in VC funding value. Meanwhile, South Korea, Japan, Singapore and Australia were among the key markets that managed to see growth in VC funding deals volume.
Despite the decline, China continued to account for the highest share of the number of VC deals announced in the APAC region in 2022 followed by South Korea, India, Japan, Singapore and Australia.
Bose concludes: “Although challenging market conditions seem to have made investors cautious for big-ticket investments for short-term, growth in deals volume in some of the markets could be seen as a positive sign for VC funding activity in the AI space.”