Venture Capital is Getting Huge

August 19, 2019

Venture Capital Fundraising

According to data out of private equity and venture capital data provider Pitchbook, the first half of 2019 saw quite robust fundraising.  Although slightly slower than 2018’s massive fundraising year, the first half of 2019 saw almost $21 billion in total funding raised.  Behind the $21 billion were 103 funds closed, 9 mega-funds (funds with $500 million or more raised), and 10 new general partners securing funding. 

The top fundraisers were TVC at $3.2 billion, followed by Andreessen Horowitz at $2.1 billion, Lightspeed Venture Partners at $1.4 billion, Flagship Pioneering at $824 million, and a second Andreessen Horowitz at $791 million. 

Venture capital is big, and it’s getting bigger.

Source: Pitchbook

Fewer Deals but More Capital

The interesting thing of the venture capital boom is the recent shift towards more capital flowing into fewer deals. 

In the first half of 2019, a total of $66 billion was deployed by the venture capital sector.  Of this $66 billion, 44.6% came from mega-deals (deals with $100million or more).  This 44.6% is up a lot from 2014’s 25.4%.

In dollar terms, $20.9 billion of venture capital investment went into late-stage venture capital investments, well ahead of the 754 early-stage venture capital deals that summed to just $8.9 billion.  At the bottom end of the dollar spectrum was angel/seed investment deals, with Pitchbook reporting $1.7 billion invested across 1,001 deals.

This trend of fewer deals but more capital may be a trend the venture capital is moving towards long term.  Hmm.

Source: Pitchbook

The Second Quarter of 2019 Saw the Largest Quarterly Exit Value Ever

The last point here on the state of venture capital is that unicorns are turning to public markets.  The second quarter of 2019 was the largest ever for exit value, with Uber ($68 billion), Slack ($23 billion), Pinterest ($9 billion). Zoom ($9 billion), and CrowdStrike ($6 billion) turning to the public markets for funding. 

The total exit value in the second quarter reached almost $189 billion, of which almost three-fourths (73.4%) came from these five massive unicorns. 

The venture capital world is changing, and it’s changing quickly.

Source: Pitchbook

Conclusion

Venture capital investment activity is booming.  Exit activity from venture capital investors saw its largest quarterly exit value ever in Q2 2019.  Fundraising for venture capital funds is still expanding.  Overall, there’s no evidence that love for what venture capital does will slow down anytime soon.  To sum up, venture capital is, once again, a cool industry to be in.

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