Dollar funding rose 27% from Q1 with 72% more mega-rounds of $100 million or more, although deals slipped 4%
NEW YORK, July 12, 2017 – Quarterly dollar funding to VC-backed companies based in the United States rose to the highest level in a year, according to the MoneyTree™ Report from PricewaterhouseCoopers LLP (PwC) and CB Insights.
In Q2 2017, investors deployed $18.4 billion to US VC-backed companies across 1,152 deals, jumping 27% in dollars from Q1 2017 but dipping 4% in deal terms. Funding activity was driven by a strong surge in mega-rounds of $100 million or more, with Q2 2017’s tally of 31 representing the highest total since the peak of 36 in Q3 2015. Meanwhile, deal activity remains in a lower range from the nearly 1,500 deals completed in Q3 2015.
"Q2 was a tale of two trends. US deal activity continued its multi-quarter downward trend, but the growth rate of investments in dollar terms accelerated from the first quarter. A surge in Mega-round deals, to the second highest level seen to date, helped drive a robust level of quarterly VC funding."
Regional deal activity was down from Q1 2017 across most major hubs, with the notable exception of LA/Orange County, which saw both deals and dollars rise for the second consecutive quarter. Although deal activity was down across both New York Metro and Silicon Valley (South Bay Area), both regions saw 8-quarter quarterly funding highs amid prominent mega-round financings.
Globally, deals were up 2% from Q1 2017 to a total of 2,439, but funding spiked 53% to an 8-quarter high of $42.9 billion, surpassing the $40.6 billion seen in Q3 2015. Even moreso than the US, Asia’s saw total funding was buoyed by several massive financings, with its five largest deals accounting for over $10 billion dollars in aggregate. Europe also saw quarterly funding hit an 8-quarter high of $4.4 billion.
“The buzz around existing and new unicorns was back with mega-rounds jumping significantly. As a result of these financings, the quarterly funding tally looked quite strong," stated Anand Sanwal, co-founder and CEO of CB Insights. "But Q2 also illustrated that deal activity has settled into a new, lower normal after declining through most of 2016 driven by weaker early stage activity. While we have seen a handful of larger acquisitions and IPOs in 2017, the exit environment's health will be a key driver of whether deal activity resumes.”
Key Q2 2017 highlights:
MoneyTree Report results are available online at www.pwcmoneytree.com.
CB Insights research can be found online here.
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