March 31, 2014
The number of completed global venture capital deals has declined three straight quarters, falling from 1,867 in 2Q 2013 to 1,348 in the first quarter of 2014, early quarter-end data from PitchBook show. Comparing 1Q 2014 to the same quarter in 2012 and 2013, the decline is even greater, with 1,967 financings in 1Q 2012 and 1,856 in 1Q 2013 compared to the 1,348 in the first quarter this year. Despite this drop, total capital invested has actually increased over the previous two quarters, reaching $15.4 billion in 1Q 2014—the most capital VC firms have ever invested in a single quarter.
To view more on venture capital trends in 1Q 2014, click the image to the right or check out the full datagraphic at the bottom.
With the number of VC deals decreasing and capital invested on the rise, VC deal sizes have gotten bulkier. The median deal size has doubled in the last two quarters, leaping from $2.1 million in 3Q 2013 to $4 million in 1Q 2014.
Increasing deal sizes tend to lead to larger valuations, and that has manifested in the data, as the overall median pre-money valuation for VC-backed companies has increased in each of the last four quarters. It’s also worth noting that 1Q 2014 saw higher valuations across all series compared to 2013 totals. This is probably the result of 63 companies that received funding in 1Q 2014 landing rounds of larger than $50 million (another eye-popping, all-time record), and their enormous valuations helping to drive the median up.