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Total Venture Capital Dollars Invested in 2017 On Track to Reach Decade HighSEATTLE, Oct. 10, 2017 /PRNewswire/ -- Investment into venture-backed companies in 2017 is on track to match or exceed dollars deployed in 2016, and if this pace holds, full-year 2017 venture capital (VC) dollars invested could be the highest in the past decade, according to the 3Q 2017 PitchBook-NVCA Venture Monitor. Venture investors deployed $21.5 billion to more than 1,699 venture-backed companies during the third quarter, bringing 2017's total investment to $61.4 billion deployed across 5,948 deals to date. Mega-deals completed in the third quarter, like WeWork's $3 billion infusion of VC, helped inflate deal value and have become the new normal in VC where investors pump larger amounts of capital into fewer companies, especially in the later stages. In fact, deals that carried a valuation of $1 billion or more represented less than 1 percent of 2017 deal count, but nearly 22 percent of the aggregate deal value. Meanwhile, private equity firms are increasingly providing an alternative liquidity option for a tepid exit market, which is pacing for the lowest number of exits since 2010. "We are witnessing an upward trend in the amount of capital deployed while the number of companies receiving investment continues to shrink. However, if you peel back the onion, you uncover the influence unicorns are having on market dynamics, with investments by non-traditional investors into these companies inflating the overall dollars invested and valuations," said Bobby Franklin, President and CEO of NVCA. "The trends of fewer companies receiving investment and the concentration of dollars into unicorns and later-stage rounds signal a new normal for the venture industry. Sitting on record-levels of dry powder, venture investors will continue to deploy capital into innovative companies, albeit at a likely slower pace." Investment activity Exit activity Fundraising activity "Venture Capital activity remains healthy, following the cyclical nature of fundraising and capitalizing on promising investment opportunities for fund managers. Valuations have remained high as certain tech industries mature and investors benefit from more information on industry dynamics," said John Gabbert, CEO of PitchBook. "On the exit side, one of the more fascinating trends is the rise of non-traditional exits. We've seen a noteworthy uptick in PE buyouts as well as the formation of a special purpose acquisition company launched by Social Capital and Hedosophia with the common goal of purchasing a unicorn tech company. Fund managers will have interesting routes to create liquidity and return funds to investors moving forward." Additional findings in this report include:
To download the full report and data pack, please click here. PitchBook and NVCA will also be hosting a webinar to unpack the data further. See links to register below: Member registration: http://nvca.force.com/?startURL=/apex/MN4__mnp_viewevent?id=a0X1J00000EO8kK Non-Member registration: https://nvca.secure.force.com/MN4__PublicEventRegistration?id=a0X1J00000EO8kKUAT About PitchBook PitchBook is a financial data and software company that provides transparency into the capital markets to help professionals discover and execute opportunities with confidence and efficiency. PitchBook collects and analyzes detailed data on the entire venture capital, private equity and M&A landscape—including public and private companies, investors, funds, investments, exits and people. The company's data and analysis are available through the PitchBook Platform, industry news and in-depth reports. Founded in 2007, PitchBook has offices in Seattle, New York and London and serves more than 12,000 professionals around the world. In 2016, Morningstar acquired PitchBook, which now operates as an independent subsidiary. Visit www.PitchBook.com for more information about the company. About National Venture Capital Association Venture capitalists are committed to funding America's most innovative entrepreneurs, working closely with them to transform breakthrough ideas into emerging growth companies that drive U.S. job creation and economic growth. As the voice of the U.S. venture capital community, the National Venture Capital Association (NVCA) empowers its members and the entrepreneurs they fund by advocating for policies that encourage innovation and reward long-term investment. As the venture community's preeminent trade association, the NVCA serves as the definitive resource for venture capital data and unites its member firms through a full range of professional services. For more information about the NVCA, please visit www.nvca.org.
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