Spending among venture capital (VC) firms hit a record level in 2018, surpassing a previous all-time high achieved nearly two decades ago.
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Last year VC firms invested $130.9 billion in U.S.-based startups, according to a new report from PitchBook and the National Venture Capital Association. Nearly 9,000 companies across the country received funding.
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The previous record — seen in 2000 – was $100 million, during the height of the dot-com bubble.
Record spending was partially spurred by an increase in deal sizes. Last year, there were 91 percent more mega-deals – deals valued at more than $100 million – when compared with 2017. In fact, overall deal volume in 2018 was actually less than the year prior.
Some of last year’s notable mega-deals included a $1.3 billion-funding round by Epic Games — maker of Fortnite — and same-day grocery delivery service Instacart’s $871 million Series F deal.
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Late-stage deals accounted for the majority of VC investment – at nearly 63 percent. Venture capital exits surpassed $120 billion for the first time since 2012 – venture-backed IPOs made up about half of that value. The report cited Moderna Therapeutics’ $604 million IPO – the largest ever for a biotech company – as one of particular note.
Other companies that listed in 2018 include cloud-storage firm Dropbox, e-signature company DocuSign and real estate firm Cushman & Wakefield.
As a slew of companies are expected to go public in 2019, PitchBook and the National Venture Capital Association cautioned that recent market volatility could “dampen new listing activity as investors increase scrutiny on fundamentals.”
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On a similar note, the record level of VC investment has spurred concerns that activity is poised to drop off in the near future.
“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,” Bobby Franklin, president and CEO of NVCA, said in a statement.
