Top venture capital deals 2019
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Growth in early and late-stage dollar volume drove most of the overall gains. We report projections based on stage as it provides a broader look at the global venture market than what can be readily apportioned into neat buckets. In venture funding rounds with more than one investor involved, typically there will be one but sometimes more firm that invests the bulk of the capital and steers most of the negotiations in a given deal.
The chart below shows the investors which are reported to have led the most rounds.
For most deals in Crunchbase with investor information included, the data designates which investors led a round, versus those which just participated or followed-on. In the set of venture rounds, we identified nearly 6, unique investors which led a deal last year. Of these, here are the firms which led the most rounds. Note that the above data is subject to change as more rounds get added to Crunchbase over time. For more about how Crunchbase classifies rounds by stage, check out the Methodology section at the end. What angel and seed-stage deals lack in size, they make up for in number.
In Q4 , angel and seed-stage activity accounted for approximately 59 percent of all deal volume, but just five percent of total dollar volume. Those ratios are representative of as a whole. More information about what types of rounds get counted in this stage can be found in the Methodology section at the end.
Although as a whole was a year of phenomenal growth, Crunchbase projections indicate that things cooled down a bit in Q4. Between Q3 and Q4, both deal and dollar volume declined somewhat. A pull-back is inevitable after a period of consistent growth. But, this being said, a contraction here may indicate increased caution on behalf of investors on the riskiest end of the capital pool. According to projections from Crunchbase, approximately 20, angel and seed-stage transactions took place in , a significant jump from —during which time aggregate seed-stage deal volume ranged between roughly 14, and 15, deals.
Yearly totals for angel and seed-stage dollar volume also rose markedly. A good chunk of that growth can be attributed to increasingly large sums raised by angel and seed-stage ventures. Seed-stage rounds—which also include angel funding, pre-seed deals, and other funding types—grew larger over the course of Crunchbase data included over 7, unique investors which led or participated in angel or seed-stage rounds last year.
Here are most active among them. Techstars and Startups run multiple sessions around the world every year. In addition to these, though, there are government-backed programs intended to kickstart innovation. Start-Up Chile , which offers international entrepreneurs work visas and equity-free funding, ramped up again in , after several quiet years.
Add in university-based initiatives like the Berkeley SkyDeck Fund , an equity crowdfunding platform like Crowdcube , a few seed-focused funds, and that rounds out the basic set of institutional investors involved at this stage. Those small but numerous transactions are difficult to track, but they no doubt add up.
Early-stage companies raise more money than their seed-stage counterparts. In Q4 , early-stage deal volume accounted for approximately 33 percent of all deal volume and 32 percent of total dollar volume.
Those ratios are at the low end of as a whole. For example, a Q3 pullback in late-stage investment meant early-stage deals accounted for an even third of deal volume but 39 percent of dollar volume. Deal volume is projected to be basically flat after a down quarter in Q3 but is still near historically high levels.
According to projections from Crunchbase, approximately 11, early-stage transactions took place in , worldwide, another significant jump from Yearly totals for early-stage dollar volume also went up. Early-stage rounds are larger than they were a year ago, but by a narrower margin than seed-stage deals. Over 8, unique investors contributed to early-stage funding rounds in And here are the most active early-stage investors, worldwide, in the last year. Many of the institutional investors listed above are either headquartered in China, or are investing capital from Chinese limited partners.
China-based offshoots of U. This is a material shift from , when the only China-connected firm to crack the top ten rankings was GGV Capital , a cross-border firm with offices in the U. Late-stage reigned. In Q4 , late-stage deal volume accounted for just 7 percent of all deal volume, but 55 percent of total dollar volume. As previously mentioned, due to variation in market conditions this year, late-stage deal volume accounted for as much as 61 percent of dollar volume in Q2, and as little as 51 percent in Q3.
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At least part of that quarterly variability can be accounted for by the enormity of the largest rounds at this stage. Not all rounds need to be that gigantic to shift dollar volume results; a cluster of merely huge nine and ten-figure rounds can change the shape of the market.
Q4 appears to carry on a steady upward trend in both late-stage deal and dollar volume. According to projections from Crunchbase, approximately 2, late-stage transactions took place in Yearly totals for late-stage dollar volume rose. Despite some movement on a quarterly basis, late-stage venture rounds are roughly the same size as they were during the same period in before the supergiant round phenomenon came to a head in the late summer of More than 3, unique investors participated in late-stage venture deals in Here are the most active among them.
There are U. Many of the U. Crunchbase News has covered several of these investors this year. Since Q4 , Crunchbase has defined technology growth rounds as the set of private equity deals raised by companies with prior venture backing. To learn more about the old definition of technology growth and why Crunchbase changed it, check out the Q4 Global Report.
Because technology growth deals are relatively few and far between and vary so much in size, sussing out trends from deal and dollar volume is difficult. However, in general, the same market forces driving fundraising at the latter end of the late-stage spectrum apply here. Shifts in the late-stage market may finally be having an effect. This being said, projected technology growth-stage deal volume is up 24 percent, from transactions in to transactions in Previously venture-backed companies raised less in pre-IPO private equity rounds, but mostly because VCs are increasingly raising growth-stage funds to fuel companies further into the business lifecycle.
In other words, dollar volume shifted away from tech growth rounds to late-stage as better-capitalized VCs now have the financial wherewithal to invest at a scale previously accessible to big-dollar PE firms. This being said, we did cover some other technology growth deals in And with that, we close out the Money In. Now the challenge will be getting that money out. After close to a decade of post-Great Recession boom times, some sort of serious slowdown is all but guaranteed sometime in the next few years.
Will be that year? The Federal Reserve is signaling intent to hike interest rates in , and public stock market volatility is spiking on global uncertainty. A lot of how the global economy will proceed depends on some key political decisions: Startup studios are interesting, blurring the lines between founders and investors. My view is that adding value is absolutely necessary—it's the promise to your founders to be their partner.
Tags Q4 Related Forrester Content For clients or purchase Predictions Q4 brought the pace down from ludicrous speed to merely insanely fast. Previously venture-backed companies raised less in pre-IPO private equity rounds, but mostly because VCs are increasingly raising growth-stage funds to fuel companies further into the business lifecycle. A lot of those will be angel and seed-stage deals, with are typically the slowest to be reported. The Palo Alto, California-based data analytics company reportedly has held discussions with bulge bracket banks about an IPO in the second half of this year or in early What matters for a venture strategy is that nothing is more determinative of a fund's success.
And it earns you the right to be involved with great founders. Ultimately, great founders in great markets build great companies. You won't make it in venture if you don't work with them. And you won't work with them if you don't bring value to the table. For founders, an investor's ability to add value is obviously important.
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Great founders are choosing their investors and want to bring in people who will help build the company. Of the three strategies, adding value is the least unique in impact here. In a much flatter distribution, like you see in say leveraged-buyout private equity, adding value will create about the same level of value that it will in the power-law distribution. The next two strategies, however, have markedly higher impacts in the power-curve setting. Sourcing better is another of the three main VC strategies. Sourcing better is a real strategy because it rescales the distribution.
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Even a random selection of investments from a better-sourced distribution of companies will have a higher expected return than an average venture fund. Fishing in a better pond can make as much or more difference as being a better fisherman. A classic way to source better is to build a better network. This works for firms with a strong general reputation.
It can also work if you are deep in a particular group of exceptional people—say, globally-elite AI researchers. Focusing on a geography can create strong networks if a fund establishes regional dominance. Quantitative venture investing can have a huge impact on picking the right investments. Admittedly, I'm biased. A predictive-analytic approach to teams, companies, and industries stacks your hand from the start. It changes all the investment odds. This takes much work to do well but has attractive returns for the effort. Outbound sourcing is an under-appreciated approach in early-stage venture.
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- There Are Only Three Venture Capital Strategies.
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Because inbound referrals are plentiful, investors often ignore outbound efforts. The key is being able to target founders who actually are exceptional.
But if you can, why would you not make sure you are talking with the best out there? Switch aspires to take several of these approaches: Founders want investors who already work with great startups, because the investor can help more, has relevant experiences scaling successes, sends a signal that they too run an exciting startup, and so on. Everybody is better off for the company they keep. The third strategy for VC: Investing better is a real strategy because you end up in bigger winners.
It increases the frequency in the upper tail of outcomes. In the graph above, investing better switches the five investments from light-grey to the new orange bars. Picking better is the dominant way to achieve outsized results at the seed stage. And the most important factor for picking better is, by far , good judgment. Good judgment is hard to describe. It's a somewhat ephemeral quality, which only reveals itself over time. As Bill Gurley says, it's the single most important quality he looks for in a new investing partner.
Picking better is also a function of doing research and developing insights. Having a correct industry thesis is a perfect example. If you can predict major technology and economic trends, you will be rewarded with more hits. An approach taken by growth-stage firms like Battery and Summit is less about picking to drive alpha, but to reduce beta. The thinking is to chose and structuring safer bets. These firms certainly still play on a power curve, but they are able to invest on a less dramatic one, lowering the exponent of the curve.
I do not, though, see this as a strong approach to investing at the early-stage. Art and science or guts and brains both play into picking.
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And both are hard. At most firms there is a huge variance of performance between partners. Access becomes a much more important factor in the later stages of venture. This is because the winners start to become very obvious as time goes on. Most Series C investors have very similar lists of the top ten companies they would like to invest in. Brand and reputation have increasing payoff as you move into later-stages.
I strive to always sharpen my judgment.