Total funding tally hits fresh eight-quarter high in US as mega-rounds drive up funding regionally.
NEW YORK, October 11, 2017 – Quarterly dollar funding to VC-backed companies based in the United States edged past Q2 2017’s tally for an eight-quarter high, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and CB Insights.
In Q3 2017, investors deployed $19 billion to US VC-backed companies across 1,207 deals, nearly the same as last quarter. Funding activity was driven by another strong quarter of mega-rounds of $100 million or more, as Q3 2017’s total reached 26. The deal total was one short of the tally in Q2 2017 and just above the eight-quarter low seen in Q4 2016.
"With 40% of value coming from mega-deals, Q3 2017 saw the largest quarter for deal value in two years,” said Tom Ciccolella, PwC’s US Venture Capital Leader. “Three of the quarter’s five largest occurred outside of California, further demonstrating the overall health of the venture capital ecosystem across the U.S."
Regional activity was up or flat across most major hubs from Q2 2017. New York Metro saw a massive spike in funding driven by a few mega-rounds. However, funding was down in Silicon Valley (S. Bay Area) falling by 46% this quarter from $4.1 billion in Q2 2017 to $2.2 billion.
Globally, total funding broke $40 billion for the second quarter in a row. Deal activity increased 3% in Q3 2017, as investors distributed $42 billion across 2,645 deals to VC-backed companies. This represents a 4% decrease in total funding from the preceding quarter, however it is still 47% greater than Q1 2017’s total. Deal activity in Asia increased by 25%, despite a 15% decrease in funding. While European deal activity decreased 6%, total funding grew 18% this quarter to $5.2 billion.
“As with last quarter, we saw a healthy number of mega-financings in Q3, which drove strong quarterly funding totals," stated Anand Sanwal, co-founder and CEO of CB Insights. "But mega-rounds now account for a rising share of total funding, while overall deal activity remains in a lower range than 2015 and early 2016. In addition, Q3's downtick in corporate participation is another trend to watch, as a sustained pullback in corporate activity would be a negative for the venture ecosystem, given how big of a role corporations now play.”
Key Q3 2017 highlights:
MoneyTree Report results are available online at www.pwcmoneytree.com.
CB Insights research can be found online here.
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