There are still opportunities in VC firms despite a drop in funding, says 500 Global

Global task superior steadfast 500 Global is bullish connected the VC sector, adjacent arsenic venture backing took a deed successful 2022 arsenic economical uncertainties loomed.

"There is decidedly a driblet successful the allocation towards ventures this year, but it truly depends connected which markets you are investing in, and what the opportunities acceptable successful those markets are," said Vishal Harnal, managing spouse of 500 Global, connected CNBC's "Squawk Box Asia" Monday.

According to information compiled by Crunchbase, global task backing successful 2022 totaled $445 billion — little by 35% compared to the erstwhile year.

"But I wouldn't spell truthful acold arsenic to accidental that determination is simply a backing winter," Harnal told CNBC's Martin Soong and Sri Jegarajah.

The firm manages much than $2.7 cardinal successful assets. Some of the startups they invested successful during their aboriginal stages see Australian graphic plan bundle Canva, Southeast Asia's ride-hailing steadfast Grab and Indonesian food farming tech startup eFishery. Grab has since listed connected the Nasdaq.

Harnal said entrepreneurs person gotten utilized to getting inexpensive superior successful the past decade. "That has funded definite types of behaviors," helium said.

Startups are mostly unprofitable, arsenic they prioritize maturation implicit profitability successful the archetypal years, which usually translates into burning cash.

However, with planetary economical headwinds slowing growth, startups person been forced to renew their absorption connected profitability and beryllium much cost-efficient.

"Now that determination has been a power oregon modulation to a antithetic mode of doing business, a antithetic modality, we are switching playbooks again," said Harnal.

There is presently an unprecedented magnitude of "dry powder" of $15 cardinal successful task capital, particularly successful Southeast Asia, helium said, referring to currency reserves for deployment erstwhile needed.

"The question we inquire ourselves arsenic investors is that, is that superior capable to tide companies implicit immoderate we are seeing close present for the adjacent 2 to 3 years? What are the opportunities that contiguous themselves during times similar this?" asked Harnal.

Harnal gave the illustration of however opportunities successful a carnivore marketplace playbook disagree from 1 for a bull market.

"That changes the mode superior flows into task superior funds truthful determination whitethorn beryllium little superior coming from non-institutional investors that aren't utilized to investing successful ventures," helium said.

But long-time VCs stay bullish toward investing successful tech companies.

"For organization investors who person decades-long acquisition investing successful VCs but person done it crossed marketplace cycles before, that superior allocation truly isn't shrinking," said Harnal.

He added that backstage valuations, specified arsenic task superior valuations, are underwritten with a acold longer word clip skyline and VCs are little affected by regular quality cycles oregon companies' fiscal results.

"We are taking a overmuch longer word presumption connected technology, which takes a portion to adopt," said Harnal.

"While determination has been a driblet [in backstage valuations], it is obscurity adjacent to what you are seeing successful the nationalist markets."