Through the first three quarters of 2018, US venture capital firms were on pace to set an annual fundraising record.
Is such a pace sustainable? This week brought nearly 7 billion new reasons to think so.
It began at the start of the week, when Tiger Global unveiled a $3.75 billion VC vehicle. Next, Josh Kushner’s Thrive Capital closed its latest flagship effort on an even $1 billion. And Thursday, Bessemer Venture Partners announced a $1.85 billion capital raise for its 10th namesake fund.
Tack on the $1.9 billion GGV Capital raised across a few different funds last week, and you have more than $8 billion worth of new funds in the span of 10 days—enough to take the annual total in the US past $40 billion for only the second time in the past decade, according to the latest version of the PitchBook-NVCA Venture Monitor. Then there’s Sequoia, which is said to be wrapping up an $8 billion growth fund that, if officially announced in the next two months, could take the year’s fundraising total into the stratosphere.
The presence of all that cash likely means more mega-deals on the way—and it’s one of the six big things to know from the past week in VC:
1. Billion-dollar funds
All three of the week’s giant new funds represented step-ups in size. Before closing its new $3.75 billion vehicle, each of Tiger Global’s last two funds had totaled $2.5 billion. Thrive’s growth has been steady, going from a $400 million fund in 2014 to a $700 million effort in 2016 to $1 billion this year. And BVP’s $1.85 billion pool is an increase from the $1.6 billion size of each of its past two funds.
2. Robots
Robots can do a lot of things. In the case of Bright Machines, a startup that officially launched this week after being incubated inside Flex, their primary purpose is to automate manufacturing processes. And investors are believers—to the tune of $179 million in funding at a $679 million valuation. Another bot-based business, DataRobot, raised $100 million this week in a round led by Meritech and Sapphire Ventures to keep building its platform that helps users more quickly and efficiently use AI and machine learning.
3. More unicorn IPOs
The offerings may not be as high-profile as looming debuts for Uber, Lyft or Palantir. But three other VC-backed unicorns appear headed for the public markets. Qualtrics, a Utah-based provider of survey software and services backed by Accel and Sequoia, filed for a $200 million IPO this week. Cloudflare, a provider of web performance and security services, could reportedly go public next year at a $3.5 billion valuation, which could prove a boon for backers like NEA and Venrock. And last Friday, reports emerged that fellow cybersecurity provider CrowdStrike is preparing for a multibillion-dollar IPO of its own.
4. Wheeling and dealing in real estate
It’s been less than a month since Compass raised $400 million at a $4.4 billion valuation to keep building its real estate platform. This week, that took the form of acquiring part of Spring, the VC-backed creator of a fashion shopping app, with more than 20 Spring employees joining Compass. Another startup in the space, Ribbon, brought in $225 million this week to help prospective homebuyers struggling to secure mortgages.
5. Execs turned investors
After more than two decades in high-ranking roles at Microsoft—including as the leader of the Windows business—Terry Myerson is moving into VC and PE, announcing this week that he’s taken dual roles as a venture partner at Madrona Venture Group and an operating executive at The Carlyle Group. And a handful of other C-suite bigwigs—former Verizon chief executive Ivan Seidenberg and Washington Post publisher Fred Ryan among them—participated in a $130 million funding for Afiniti that valued the provider of an AI-powered customer service platform at an estimated $1.6 billion.
6. Creepy meetings
In theory, the idea of using AR to bring together people in different locations for meetings is an interesting one. That’s why Spatial, a new startup trying to do just that, hauled in $8 million in seed funding this week. But in practice, as this demo shows, talking to strangely blurry holograms of your coworkers while wearing a wraparound headset appears to be the definition of an uncanny valley. The future gets stranger every day.
