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Laxman Pai, Opalesque Asia: Venture capital deal activity in the US slowed in Q3 2019, but full-year activity is on track to set a new annual record.
Venture capital deal activity in Q3 2019 dropped to 1,027 deals and $22bn in capital deployed - the lowest total value in any quarter this year, said a report by Preqin and the First Republic. "In spite of this, full-year deal activity is on track to set a new annual record for venture capital in the US," it added.
However, so far in 2019 there have been 3,347 deals amounting to $78bn in aggregate value, and this represents 77% of the total value of US venture capital deals in 2018.
Venture capitalists in the US prioritize investment in early financing rounds and the information technology (IT) sector.
Early-stage investments (Series A and earlier) accounted for 51% of deals in Q3 2019 and 19% of the total value.
IT represented 54% of deals and half of the deal value in Q3 2019, and six of the 10 largest venture capital deals in the US in Q3 2019 were for IT companies, the largest of which was the $370mn Series G funding round for Urban Compass Inc. back in July 2019.
The exit environment for US venture capitalists remains healthy. The aggregate value of exits in 2019 is keeping pace with the record set in 2018 ($88bn).
As of the end of Q3 2019, there have been 418 exits so far this year; these exits are valued at an aggregate $65bn, which represents 74% of the 2018 total.
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