Overall US Deal Activity Declined 2%
10 Minted Unicorns in North America and Asia
NEW YORK, April 11, 2018 – The first quarter of 2018 saw an increase in funding to VC-backed companies based in the United States with a high number of mega-rounds contributing to the funding growth, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and CB Insights.
While funding to VC-backed companies in the United States increased 4%, reaching $21.1B invested across 1,206 deals, deal activity declined 2%. A high number of mega-rounds contributed to the funding growth this quarter, which was the second-consecutive quarter with over 30 rounds of $100M or more. Q1’18 saw 34 mega-rounds to US VC-backed companies, which accounted for 34% of total funding, but down from 42% in Q4’17. This marks the first decline since Q4’16.
2018 looks to continue the trend of larger deals as we’ve now seen two consecutive quarters with over 30 rounds of $100M or more – only the second time in recent history that this has happened. Additionally, the $21B we saw invested this quarter is a record high, just the second time we’ve reached this funding level during the last 15 years, and Artificial Intelligence saw its biggest funding quarter ever (over $1.8B)."
Several US regions also saw an increase in funding. San Francisco-based companies saw a 23% increase in funding, spurred by 8 mega-rounds of $100M or more. LA/Orange County saw funding jump 97% with $1.9B invested across 101 deals. For the third-straight quarter, New England funding increased, with $2.7B invested across 125 deals.
Despite a 4% decline in deal activity this quarter, global investment reached $46.5B across 2,884 deals. North America and Asia continue to be centers for mega-rounds and unicorns. North America saw 35 mega-rounds in Q1’18, while Asia recorded 29, and accounted for 4 of the 5 top rounds globally. Both regions were each home to five new Unicorns this quarter.
"Early stage deals declined this quarter while mega-rounds, those over $100M, and later stage funding remained strong. This is a trend we have seen the past few quarters,” said Anand Sanwal, co-founder and CEO of CB Insights. "Right now, a lot of the money flowing into venture-backed companies is from large corporates or sovereigns who need to put a lot of money to work at once. This diversion of attention away from early-stage venture is something worth watching as it will have knock-on effects down the line on the venture market.”
Key Q1 2018 highlights:
MoneyTree Report results are available online at www.pwcmoneytree.com.
CB Insights research can be found online here.
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