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Alternative Market Briefing

US venture capital deal hit record-high total value in 2019 at $104bn

Monday, February 24, 2020

Laxman Pai, Opalesque Asia:

The aggregate value of venture capital deals for US-based companies reached a new peak of $104bn in 2019.

Despite this, the annual number of deals has decreased continually since 2014 (6,809), and dropped by 18% from 2018 to 4,637 deals in 2019, Preqin said.

The average size of venture capital investment in US companies was, therefore, $224mn in 2019, up from $181mn the previous year.

Early-stage investments (Series A and earlier) accounted for 52% of US venture capital deals in 2019 and 18% of capital invested.

Information technology was the industry of choice for US-based venture capital investment in 2019, representing 53% of the number of deals and 44% of total deal value.

The largest deal of the year was the $2bn funding round for WeWork Companies Inc. by SoftBank Group in January.

Although still healthy figures, the number and aggregate value of venture capital exits in the US in 2019 dropped from 2018. In total, 592 exits were completed for a combined $78bn, which compares with 671 exits for $89bn in 2018.

Trade sales remained the most common method of exit, accounting for 73% of all exits of US-based portfolio companies in 2019, despite the total number decreasing from 2018.

Three of the five largest exits in 2019 were trade sales, led by the $4bn trade sale of Honey Science Corporation to PayPal, Inc. in November 2019.

The number of US-based IPOs declined from 93 in 2018 to 80 in 2019. The largest US-based venture-backed exit last year was the $8.1bn IPO for Uber Technologies, Inc., which took place in May 2019.

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