Insight Partners Slows Dealmaking Amid Tech Funding ‘Bloodbath’

Insight Partners has reportedly lowered the $20 billion goal for its latest fund as tech valuations continue slumping.

The venture capital fund has raised just $2 billion for its 13th fund, the Financial Times (FT) reported Monday (June 12), citing a letter from Insight to investors.

In that letter, the firm said it was seeing a “great reset in tech,” leading it to reduce the size of its latest fund to $15 billion, and plans to reduce the pace at which it deploys funding.

A source close to the fund told the FT that Insight isn’t “seeing a volume of companies that [it is] excited about.”

PYMNTS has reached out to Insight Partners for comment but has not yet received a reply.

The report notes that Insight is considered a bellwether for venture capital and tech investing, with one investor telling the newspaper that its funding troubles illustrate the sector’s difficulties: “It is a bloodbath.”

That’s a term that’s been used a lot in recent months in regards to tech funding.

“We haven’t had a compression in values like this in more than 20 years,” Cameron Lester, global co-head of technology media and telecom investment banking at financial services firm Jefferies, told Bloomberg News in April. “It’s an absolute bloodbath.”

As noted here earlier this week, the amount of venture capital raised by American startups fell by 55% between 2022’s first quarter and the same period this year. Meanwhile, the annual internal rate of returns for venture companies in the third quarter of 2022 was negative 7%, the lowest level in 13 years.

This change in the funding landscape will force businesses to rethink how they get funded, David Metz, CEO of Prizeout, wrote in an opinion piece for PYMNTS last month.

“In recent years, money was flowing freely, funding was never-ending for ideas that sometimes never came to fruition, and companies without products saw unexpected valuations,” wrote Metz. “We’re seeing this end, and that’s not necessarily a bad thing.”

He predicted more “intentionality, focus, and direction” in how businesses earn and spend money, an environment in which the culture of necessity replaces the culture of disruption.

“I predict that the companies left standing in 2023 will be those creating products that are not just ‘cool,’ but rather essential and solving real and tangible problems for all walks of life.”