First-Quarter VC Activity Buoyant at $12.1 Billion, & Top 10 Deals

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first quarter. Later-stage deals accounted for 22 percent of total deal volume.

In other highlights, the first-quarter MoneyTree Report shows:

—Software-related deals continue to get the biggest chunk of venture funding, with $5.1 billion going into 376 deals.  While that was a 12 percent increase from the $4.5 billion invested in the previous quarter (and a 5 percent decrease from the 395 deals), it was down from the first quarter of 2015, when VCs invested $5.6 billion invested in 456 software deals.

In a discrete classification of “Internet-specific” deals, VC firms invested $2.4 billion into 232 companies that are fundamentally dependent on the Internet.. That was down from the $3.1 billion (-24 percent) that went into 242 deals (-4 percent) in the fourth quarter of 2015.

Agrawal, who invests mostly in software-as-a-service and Internet companies for Battery Ventures, said software remains “a very strong macro driver” by enabling companies to realize cost savings through automation. “Migration to the cloud is still early, it only represents about 15 percent of the industry,” Agrawal said. “That means a whole lot of software is still being done the old-fashioned way.”

—Venture investments in life sciences startups (including both biotechnology and medical devices) amounted to $2.3 billion invested in 177 deals, and accounted for 19 percent of all venture capital deployed during the first quarter. VCs invested $1.8 billion into 118 biotech deals during the first quarter, marking an 11 percent increase from the $1.6 billion invested in the prior quarter. The deal count was 19 percent higher than the 99 deals done in the previous quarter.

—Media and Entertainment startups ranked third in terms of deployed capital, with $930 million invested in 109 deals.

First-Quarter Top 10 Deals, based on MoneyTree Report

Lyft San Francisco Software $1 billion
Magic Leap Dania, FL Computers & Peripherals $793.5 million
Sunnova Energy Houston Industrial Energy $300 million
Uber San Francisco Software $201.1 million
Flatiron Health New York Software $175 million
Domo American Fork, UT Software $131 million
DoorDash San Francisco Media & Entertainment $127 million
Fuze Cambridge, MA Software $111 million
Betterment New York Financial Services $100 million
Snagajob.com Glen Allen, VA Media & Entertainment $100 million

 

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Author: Bruce V. Bigelow

In Memoriam: Our dear friend Bruce V. Bigelow passed away on June 29, 2018. He was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Bruce Bigelow joined Xconomy from the business desk of the San Diego Union-Tribune. He was a member of the team of reporters who were awarded the 2006 Pulitzer Prize in National Reporting for uncovering bribes paid to San Diego Republican Rep. Randy “Duke” Cunningham in exchange for special legislation earmarks. He also shared a 2006 award for enterprise reporting from the Society of Business Editors and Writers for “In Harm’s Way,” an article about the extraordinary casualty rate among employees working in Iraq for San Diego’s Titan Corp. He has written extensively about the 2002 corporate accounting scandal at software goliath Peregrine Systems. He also was a Gerald Loeb Award finalist and National Headline Award winner for “The Toymaker,” a 14-part chronicle of a San Diego start-up company. He takes special satisfaction, though, that the series was included in the library for nonfiction narrative journalism at the Nieman Foundation for Journalism at Harvard University. Bigelow graduated from U.C. Berkeley in 1977 with a degree in English Literature and from the Columbia University Graduate School of Journalism in 1979. Before joining the Union-Tribune in 1990, he worked for the Associated Press in Los Angeles and The Kansas City Times.