What a year 2018 was in the VC/start-up world. Coming into 2019 we all wondered whether the record pace could be sustained. Well, let the wondering end. An awesome report was just put out by Pitchbook and the NVCA on Q1 investment round data which unearthed some really interesting trends, particularly in the early stage space, namely:
· Overall: fewer, larger venture transactions with deal numbers continuing to shrink even as investment levels maintained their 2018 pace.
· Angel, seed & first financings: while overall deal count is down broadly, the earliest stage has seen the greatest decline with annual count falling 44% between 2015 and 2018, the take away being that as start-ups face steeper expectations for maturity from investors so capital is being concentrated in fewer but more developed start-ups.
· Early stage VC: remains strong but has receded from decade peak in Q2 of 2018. The median size of early stage VC financings grew 36% YoY to $8.2m.
· Sectors: As huge flows of capital pour into the core software and SaaS companies, many VCs are looking to emerging sectors that are less congested with investments. Some areas to watch include cybersecurity, robotics, the applications of AI & ML, next-generation infrastructure, fintech, healthtech and traditional industries ripe for disruption.
Some other great data in here around later stage deals, geographic regions, incubators, female founders, corporate VCs, etc.
Buckle-up should be a wild rest of the year!