Mubasher: US venture capital investment totalled $136.5 billion at the end of 2019 in 10,777 deals, exceeding $130 billion for the second year in a row, according to a report released by PitchBook and the National Venture Capital Association (NVCA).

During the fourth quarter of 2019, a total of $34.2 billion was invested in 2,215 deals.

“One factor contributing to the record deal value seen in recent years is the increasing maturity of companies at all stages, underscored by a rise in early-stage mega deals,” the report showed.

Q4 2019 saw $34.2 billion invested across 2,215 deals, totaling $136.5 billion across 10,777 deals in 2019

Exits

Despite a slowdown in venture-backed exit activity during the fourth quarter, 2019 registered an annual record for US VC exit value at $256.4 billion across 882 liquidity events.

Exit activity in the October-December period of 2019 recorded a quarter-on-quarter drop for the second successive quarter in terms of the number and value of deals, with 174 exits amounting to $18.8 billion

 “This unprecedented flow of capital back to general partners (GPs) and limited partners (LPs) should drive impressive return metrics, encourage more fundraising and increase allocation to VC,” the report highlighted.  

PayPal's $4.0 billion acquisition of Honey Science led exit events during Q4-19 in terms of value.

"While there are lingering uncertainties surrounding global macroeconomic trends, US public policies, and the 2020 election that could impact the industry, the flood of exit dollars going back to LPs, the robust fundraising environment, and large amounts of dry powder available at many venture firms should allow the industry to sustain this new level of investment activity in 2020," president and CEO of NVCA, Bobby Franklin, noted.

Fundraising

Strong exit activity and larger fund sizes have pushed fundraising to its second highest level in the last decade as US venture funds raised $46.3 billion across 259 vehicles in 2019, down from $58 billion in 2018.

Despite a drop in the number of funds from those in 2018, VC funds increased with the annual median fund size totalling $78.5 million last year.

The volume of funds sized between $50 million and $250 million significantly grew, making up 43% of the total number of funds in 2019.