U.S. startups had a great 2018 in terms of funding, with new data showing that venture capitalists deployed $130.9 billion, marking a new all-time high.
According to new data from the PitchBook-NVCA Venture Monitor, the $130.9 billion deployed surpassed 2000, which was a record-setting year.
“The venture ecosystem continued to slash records in 2018, further illustrating the maturation of the venture capital asset class, but also raising questions about the sustainability and health of these activity levels moving forward,” said John Gabbert, CEO of PitchBook, in a press release announcing the new data. “Some GPs and LPs have already expressed concern that excess capital has led to inflated round sizes and valuations. In the event of any adjustments in the global economic or political backdrop, valuations may see a correction from their currently elevated levels, but private market investment activity will likely continue unabated. VCs will still have an immense trove of capital to invest.”
According to PitchBook-NVCA Venture Monitor, in addition to setting a record for investments going into U.S. startups last year, the deal sizes across the entire VC spectrum were larger. Mega deals – investments that are more than $100 million – dominated the dealmaking, up 91.3 percent year-over-year. The number of megadeals reached 199 in 2018. In the fourth quarter, PitchBook-NVCA said $41.8 billion went to startups in 2,072 deals. For all of 2018, 8,948 deals were completed, hitting $130.9 billion. Strong fundraising on the part of investors enabled transaction sizes and valuations to rise.
“It was an exceptional 2018 for the venture industry, with nearly 9,000 companies across the country receiving funding. The rise of first-time fund managers; the growing sizes of VC funds, investments, and valuations; and heightened activity from corporate and private equity investors are all important trends that continue to transform our ecosystem,” said Bobby Franklin, president and CEO of NVCA, in the same press release. “Naturally, the strong exit environment has brought warranted excitement, but there is also a strong sense of caution as signs of both public and private market corrections emerge.”