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Venture Capital

Venture capital investment on track to rival record volume in 2018 – report

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After setting a record high in 2018 of $132.1 billion, investment in U.S. venture capital remained strong in the first quarter of 2019, putting this year on track to rival last year's amount, according to the results of a quarterly report jointly issued by PitchBook and the National Venture Capital Association.

The first quarter PitchBook-NVCA Venture Monitor said that investors deployed $32.6 billion in venture capital funding across 1,853 deals by the end of the quarter, up 10.5% in volume but down 22.5% in deal count from the first quarter of 2018.

"Despite uncertainties around the sustainability of 2018's record VC activity levels, the first quarter of 2019 bolstered healthy figures and is on track for another strong year," said John Gabbert, founder and CEO of PitchBook, in a news release announcing the report. "Investors continue writing larger checks to more developed startups, allowing late-stage companies the choice of operating in either the public or private market after weighing liquidity against transparency."

Larger deals are continuing to drive elevated total deal value, according to the report. The first quarter saw 41.9% of deals sized $10 million or greater, making up 90% of early stage capital invested. Additionally, the first quarter saw 15 early stage megarounds (deals valued at least $100 million), pacing to nearly double the 2018 annual count of 36 deals.

However, fundraising activity within the venture capital space cooled in early 2019, as 37 venture capital funds raised a total of $9.6 billion in the first quarter. Some $53.9 billion was raised in 2018. Although 31.4% fewer funds were raised in the first quarter of 2019 than the first quarter of 2018, larger funds made up a bigger percentage of fundraising.

Despite the slowdown, the first quarter continued 2018's venture capital megafund trend. Five venture capital megafunds closed in the first quarter. The highest growth in the first quarter came from funds with $250 million to $500 million. Megafunds were defined as those raising more than $500 million.