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(Reuters) – Venture capital dealmaking in the United States dipped in the first half of 2022, as investors shied away from signing large checks for startups due to uncertain macroeconomic conditions and market turmoil, according to a report on Thursday.

The value of deals struck in the first half of 2022 dropped to $144.2 billion, due to an ongoing stock market rout driven by fears of a looming recession, raging inflation and aggressive rate hikes, from $158.2 billion over the same period last year.

VC dealmaking hit an all-time high of over $340 billion in 2021, as firms ramped up bets on high-tech, biotech, healthcare and fintech startups, buoyed by excess liquidity and an accommodative monetary policy.

While investments in late-stage firms saw a substantial decline in average size and valuations from recent highs, funding in early-stage companies in the second-quarter also came in well below the record levels set in the prior year, according to the report by PitchBook and the National Venture Capital Association (NVCA)

The pace of VC activity is also expected to slow in the second half of 2022 as the threshold for closing deals rises and pricing uncertainty extends to the early stages of the investment cycle.

The door to potential billion-dollar exits has also closed with initial public offerings (IPOs) on ice against the backdrop of falling valuations and choppy trading across U.S. exchanges.

“Exits remain extremely low while late-stage companies act with caution as a result of bearish public market activity,” said John Gabbert, founder and chief executive of PitchBook.

The IPO market in the second-quarter hit a 13-year low with only eight companies managing to list. Only 22 VC-backed companies managed to successfully list in the first half of year compared to 183 over the same period in 2021, and 108 in 2020, the report said.

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