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Chart of the Week: Late-Stage Deals Dominate and Asia Gains Momentum
Source: Crunchbase and EquityZen
Investors around the world are continuing to pour money into startups at a staggering pace. According to KPMG, VC-backed companies raised $119.1 billion across 5,769 deals in the first half of 2018. This accounts for over three-quarters of the total amount of global venture capital funding in all of 2017, which was a record high of $155 billion. Where is all this cash going to? Late-stage deals, primarily in Asia.
Mature startups are eating up a greater slice of total venture capital, taking in 64% of VC funding in Q2 2018. So far, of the top ten largest funding rounds among privately-held startups in 2018, nine went to late-stage companies (we consider Series C and beyond to be late-stage). Venture Capitalists’ growing appetite for late-stage companies is pushing key venture activity on both sides of the financing spectrum to the margins: angel and seed rounds on one end and private equity funding on the other. As late-stage investors invest greater dollar amounts into startups, the value of early-stage check writers accounts for less of the total funding volume over time. On the other side, private equity firms are getting less action in late-stage venture deals as venture capital firms are able to invest more cash in older startups.
Notably, many of these late-stage deals are no longer dominated by U.S. based companies as Silicon Valley faces growing competition overseas. In the first half of 2018, eight of the largest funding rounds to privately-held startups went to companies headquartered in Asia, six of which are based in China. Although China is creating more and more unicorns, according to the Wall Street Journal, many of these companies that are household names in China, such as the Yelp equivalent Meituan-Dianping, are “virtually unknown elsewhere”. Nevertheless, Asia is stealing some of the spotlight away from Silicon Valley as firms across the globe strive for control in promising new technological innovations in fields such as artificial intelligence, self-driving cars, and digital payment systems.
As we move into the second half of 2018, please see below for a brief recap of several notable events that have occurred so far this year:
Trivia Question: What is the only bird known to fly backwards?
(Answer located at the bottom of the newsletter)
Other items we are reading:
Finance & Research Lead, EquityZen
AgBiome - [AgBiome LLC Secures Series C Funding]
Mitra Biotech - [Oncology solutions company Mitra Biotech gets $40 million]
Fastly - [Fastly raises another $40 million before an IPO]
Dialpad - [Dialpad dials up $50M Series D led by Iconiq]
Greenhouse Software - [Greenhouse Secures $50M Growth Investment From Riverwood Capital]
Light - [Light raises $121M led by SoftBank as it prepares to bring its camera tech to smartphones]
GrubMarket - [GrubMarket gobbles up $32M led by GGV for its healthy grocery ordering and delivery service]
Trivia Answer: Hummingbird
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