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Maintaining momentum: Strong valuations and IPOs keep venture strong in 1Q 2019
W E B I N A R
PitchBook is a financial technology company that provides data on the capital markets to help
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PitchBook: The leading resource for private and public market analysis
3
1Q 2019 Venture Monitor Report
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Joelle SostheimVenture Analyst II
4
Key themes
After setting an all-time high in 2018, VC investment remained strong in 1Q 2019 with $32.6 billion invested.
Large exits helped to maintain 2018’s momentum.
Closed fundraising activity cools in 1Q, but expectations still elevated for the full year.
1 2 3
VC investment remained strong in 1Q with $32.6 billion invested
U S D E A L M A K I N G
Investment remains elevatedU S V C D E A L A C T I V I T Y B Y Y E A R A N D Q U A R T E R ( $ B )
10.5%YoY growth in US VC deal value
$93.9BDry powder held by US venture investors
$130
.9
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2014 2015 2016 2017 2018 2019Deal value ($B) Deal count Angel & Seed Early VC Later VC
On track to outpace 2018U S V C M E G A - D E A L A C T I V I T Y B Y Y E A R ( $ B )
52.2%Of overall VC capital invested
Notable deals:
$5.0B
$1.0B
$940B
$700M2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Deal value ($B) Deal count
Long lifecycles require greater capitalM E D I A N V C D E A L S I Z E ( $ M )
1.04
8.16
10.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*Angel & Seed Early VC Later VC
3.8 yearsMedian age of Series A companies in 2019
81% Growth in early-stage deal sizes since 2014
Value increasing across all stages M E D I A N V C V A L U A T I O N B Y S T A G E ( $ M )
53.9% Growth in late-stage valuations since 2014
7.60
32.00
74.50
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Angel& Seed Early Stage Later Stage
122.6% Growth in early-stage valuations since 2014
IPOs and acquisitions position 2019 for a strong year
U S E X I T S
On trajectory to eclipse 2018 valueU S V C E X I T A C T I V I T Y B Y Y E A R ( $ B )
$46.7BCapital exited value in 1Q 2019
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Exit Value ($B) # of Exits Closed
65.7%Increase in first quarter exit value from 2018
U S V C E X I T A C T I V I T Y ( $ ) B Y T Y P E
53.6%of 2019 exit value generated by 12 IPOs
$279.9M2019 median IPO size
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Acquisition
IPO
Buyout
Despite low count, IPOs retain dominance
Expected IPOs
Company Total VC raised Latest post valuation
Beyond Meat $192M $1.35B
CrowdStrike $481M $3.35B
DataStax $190M $967M
Postmates $681M $1.85B
Slack $1.22B $7.13B
Uber $19.9B $78.8B
Closed fundraising activity cools in 1Q, but expectations still elevated for the full year
U S F U N D R A I S I N G
Fundraising off to slow start U S F U N D R A I S I N G B Y Y E A R
37Numbers of funds raised in Q1 2019
$9.5BAmount of capital raised in Q1 2019
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019*
Capital raised ($B) Fund count
Fewer funds for seed investmentU S F U N D R A I S I N G ( # ) B Y F U N D S I Z E B U C K E T
35.1%% of funds $250M and greater
Only 2First-time funds raised
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%20
09
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
*
$1B+
$500M-$1B
$250M-$500M
$100M-$250M
$50M-$100M
Under $50M
17
Key themes
After setting an all-time high in 2018, VC investment remained strong in 1Q 2019 with $32.6 billion invested.
Large exits helped to maintain 2018’s momentum.
Closed fundraising activity cools in 1Q, but expectations still elevated for the full year.
1 2 3
Panel discussionValuations and IPOs keep venture strong in 1Q 2019
Buddy Arnheim Co-Chair, Emerging Companies & VC Practice, Perkins Coie
Buddy represents emerging growth companies, venture capital funds, other early stage participants and more. He is widely referenced for his experience in the areas of corporate and securities law, governance matters and industries such as robotics, autonomous machines, AI and machine learning.
20
Ryan Logue Head of Business Development & Innovation, Private Markets, Solium
Ryan is focused on driving new product offerings for Solium’s top private company clients. Prior to joining Solium, Ryan led efforts to help private companies access institutional capital and completed over $20B in complex transactions as the Director of Operations at SecondMarket and the Head of the Private Company Market for Nasdaq Private Market.
Lewis Hower Managing Director, Early Stage Practice, Silicon Valley Bank
Lewis has spent the past decade working to research, develop, and invest in innovation at the intersection of rapid business growth, large markets, and massive global challenges. Through various stints in research, diligence, fundraising, investment management, education and formation of new concepts he has been at the bleeding edge of innovative investments that are changing the world.
22
Venture Monitor - Panel DiscussionModerated by Lee Gibbs, PitchBook
Lewis HowerManaging Director,
Early Stage Practice
Buddy ArnheimCo-Chair, Emerging Companies & VC
Practice
Ryan LogueHead of Business Development &
Innovation, Private Markets
…53.6% of 2019 exit value has been generated by 12 IPOs”
“Venture Monitor Report
24
Venture Monitor - Panel DiscussionModerated by Lee Gibbs, PitchBook
Lewis HowerManaging Director,
Early Stage Practice
Buddy ArnheimCo-Chair, Emerging Companies & VC
Practice
Ryan LogueHead of Business Development &
Innovation, Private Markets
Do you anticipate this IPO activity to carry through the year?
Is there a scenario wherein we see a slow down in IPO activity?
27
Venture Monitor - Panel DiscussionModerated by Lee Gibbs, PitchBook
Lewis HowerManaging Director,
Early Stage Practice
Buddy ArnheimCo-Chair, Emerging Companies & VC
Practice
Ryan LogueHead of Business Development &
Innovation, Private Markets
…Capital flow into late-stage venture surpassed $20B for the second consecutive quarter. ”
“
Venture Monitor Report
…53.6% of 2019 exit value has been generated by 12 IPOs
“Venture Monitor Report
30
Venture Monitor - Panel DiscussionModerated by Lee Gibbs, PitchBook
Lewis HowerManaging Director,
Early Stage Practice
Buddy ArnheimCo-Chair, Emerging Companies & VC
Practice
Ryan LogueHead of Business Development &
Innovation, Private Markets
31
1Q 2019Venture Monitor Report
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