Venture capital investors poured more than $28 billion into US companies last quarter, putting 2018 on pace for a decade-high record in terms of total capital invested. Deal count has declined, particularly at the angel/seed stage, but stability in both early- and late-stage deals indicate the market for investment activity is still healthy.
The 1Q 2018 PitchBook-NVCA Venture Monitor, created in partnership with Silicon Valley Bank, Perkins Coie and Solium, contains detailed analyses of the current venture landscape, breakdowns of data on exits and fundraising, and a Q&A on current trends in CVC investment, among other elements. The full report is available to download for free, but for a summary of some of the key points, check out these 13 charts.
2018 is off to a strong start
Last year set a record for total venture capital invested in US startups, surpassing every year since the dot-com era. If 2018 continues the pace it set in 1Q, it will surpass 2017 and set a new benchmark.
Billion-dollar companies continue to attract capital
There was more VC invested during 1Q 2018 than any quarter in the past decade. Much of that is thanks to unicorns: Companies worth more than $1 billion accounted for over 25% of total venture capital deployed in that time period.
Rounds are getting bigger
Late-stage financings are larger than ever, and early-stage rounds are also on the rise. As you can see below, early-stage rounds have been steadily increasing in size over the last six years, and both early- and late-stage rounds made a big jump in 1Q 2018.
For CVCs, deal value is up
Corporate venture capital investors took part in deals totaling $14.1 billion during the first quarter, putting the year on pace to reach a decade-high in terms of deal value. But CVC deal count is on pace to decline for the year.
Growth equity on pace for a strong year
The amount of growth equity invested in 1Q 2018 makes it the third-strongest quarter since 2010. This year is on pace to overtake tallies from the previous four years.
West Coast remains on top
During the first quarter, the West Coast took in more than half of all VC dollars and nearly 40% of total deal activity.
Exits are slowing
Exit flow in 1Q 2018 came in a bit weaker than the same quarter a year ago. It appears the trend can partly be explained by larger VC deals, which supply a long runway of cash and can decrease the sense of urgency for VC-backed companies to exit.
A healthy quarter for IPOs
The median size of IPOs jumped significantly in 1Q. Dropbox and Zscaler, two unicorns, completed successful exits and have provided hope that 2018 will be a strong year for VC-backed IPOs.
Investment-to-exit ratio is on the decline
The investment-to-exit ratio during the first quarter puts 2018 on pace to be lower than any year since 2010.
Slow quarter for fundraising
Though the amount of capital committed to VC funds in 1Q was lower than it's been in recent quarters, there are several funds in the pipeline that will likely close on at least $1 billion and boost year-end numbers.
First-time and micro funds showing strength
During the first quarter, micro funds (vehicles smaller than $50 million) made up 50% of the fund count for the first time since 2015. Those small funds and first-time vehicles both had robust quarters.
Median fund size drops
Because there were so many micro funds in 1Q, the median fund size has declined from last year's numbers. But large funds are expected to make a push later in the year, providing a boost to fund sizes and total capital.