Sunday, April 16, 2017

The capital being invested in VC-backed startups

The capital being invested in VC-backed startups is gradually decreasing — something the National Venture Capital Association (NVCA) and PitchBook describe as a return to normalcy in their report, which was released today. Dealflow slows During the first quarter of 2017, investors poured $16.5 billion into 1,797 venture-backed startups, including Airbnb, SoFi, and Instacart (which claimed a combined $1.9 billion of the total). This shows a decrease in both the amount invested and the number of deals closed compared to Q1 of 2016, when VCs poured $18.7 billion into 2,366 venture-backed startups. Megafunds retreat Another sign of normalcy: less capital raised by venture firms in Q1. VCs raised $7.9 billion across 58 funds, down roughly 24 percent from the capital raised in Q1 of last year. “A major contributing factor to the decline in fundraising totals in the first quarter was the absence of mega-funds raised,” the report said. The majority of new VC funds in Q1 were for less than $250 million. Mithril Capital and Spark Capital were the only two firms that raised funds north of $500 million — $850 million for Mithril and $612.8 million for Spark. Venrock, Lux Capital, and Versant Ventures all raised $400 to $450 million funds. Among angel and seed investors, 500 Startups, Techstars, Elevate Ventures, First Round Capital, Global Private Group, and SOSV closed the most deals.

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