E-commerce deal activity faded at end of 2022
E-commerce dealmaking went out like a lamb in 2022, with only $1 billion spread across 77 transactions during Q4, a PitchBook report finds.
Why it matters: Customers didn't curb their online purchases in 2022, but rising customer acquisition costs and shrinking margins continue to cool the market, Claire writes.
By the numbers: Deal value fell 42.1% from Q3 to Q4 last year, while deal count increased by 51%.
- Late-stage pre-money valuations fell 45.1%.
- There were just five exits in Q4 of undisclosed value, down from seven exits valued at $400 million in Q3.
- On the whole, 2022 saw 23 exits worth $1.5 billion.
- "By comparison, the $1.1 billion in exit value in Q4 2021 nearly reached 2022’s annual total," the report says.
Meanwhile, consumers spent a record $1.09 trillion on online transactions in 2022.
Zoom in: The purchase medium and purchase venue segments of e-commerce raked in the most money with $447.5 million and $271.2 million in funding, respectively.
- Post-purchase startups amassed $152.6 million in deal value.
- Notable deals included e-commerce return service Loop Returns' $114.6 million Series B, purchase venue ConnexPay’s $109.8 million Series C, and payment platform Airwallex’s $100.0 million Series E.
The intrigue: The report highlights the growing re-commerce ecosystem, noting growing consumer appetite for secondhand shopping.
- Brands are getting in on resale too, having increased their re-commerce listings 13% year-over-year, with a threefold increase in brand adoption, the report says.
- Economic downturn will likely lead more consumers to the thrift shop, the report says.
- The current climate will also likely yield dealmaking in the resale space, particularly as public markets remain difficult to access for larger players.
