The Bay Area, the global hub of venture capital activity, saw a 10.6% decline in deal flow from 1,370 financings in 2012 to 1,225 in 2013, new PitchBook data show, but investors funneled more money into those fewer deals as capital invested increased to $13.4 billion last year from $12.5 billion in 2012. Much of the slump in deal activity can be attributed to a 12.7% drop in the number of rounds for software companies, in addition to similar declines among media and healthcare devices & supplies companies. Commercial services picked up some of the slack with 154 deals in the Bay Area, up from 123 in 2012.
Silicon Valley and its environs are also losing ground to other U.S. regions and Europe in its share of total deal flow, as VC firms seek diversification and potentially lower valuations outside the Bay Area.
For more on this and other trends in the Bay Area, Pacific Northwest, Boston and Europe, click here.