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Retail tech funding projected to decline 33%

Retail tech funding
Reproduced from CB Insights; Chart: Axios Visuals

Global retail tech funding in 2022 is on pace to decline 33% year over year, according to data and analytics provider CB Insights.

Why it matters: As we pointed out on Friday when we noted that e-commerce funding fell by 60%, the pandemic underscored the importance of e-commerce, but may have also exposed its investment ceiling.

  • Executives noted that they accelerated investment in digital capabilities early on in the pandemic as they attempted to adapt to store closures, spending that would have otherwise been spread out over several years.

By the numbers: In particular, global retail tech funding collapsed by 43% quarter over quarter in Q2 from about $23 billion to about $13 billion, CB Insights revealed.

  • And it was the largest drop across the major sectors, compared to fintech, which experienced a 33% decrease, and digital health, which fell by 32%, the research firm noted.
  • In the U.S., retail tech investment clocked in at $4.8 billion in Q2, down 46% from $8.9 billion in Q1.
  • And the number of new retail tech unicorns fell to five — from seven in Q1 and a peak of 13 in Q4 2022.

Of note: The top investors globally in the second quarter included Tiger Global Management, 500 Global, Gaingels, East Ventures and Global Founders Capital, in that order.

  • Softbank, which ranked fourth in Q1, was nowhere to be found among the top 10 in Q2.
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