For the second year in a row the venture capital industry surpassed the $130 billion mark for investment into American companies. In total $136.5 billion was invested during 2019, with growing support and involvement from nontraditional investors participating in 85% of the year’s 252 mega-deals, which are deals worth over $100 million. This information comes from the PitchBook-NVCA Venture Monitor, a joint product of PitchBook and the National Venture Capital Association.
“Despite uncertainties about the sustainability of the unprecedented activity seen in 2018, this year kept pace and will undoubtedly leave its mark on the venture ecosystem,” said PitchBook CEO and founder John Gabbert. “In 2019, we saw the highest exit value ever tracked, record capital deployed to female-founded startups and the most late-stage deals ever closed, to name a few. The continued proliferation of nontraditional investors participating in VC and the need for LPs to recycle distributed capital back into new VC funds should keep venture momentum strong heading into 2020.”
These record-setting numbers come even with a decrease in exit activity during Q4 of 2019, setting the annual record across 882 liquidity events at $256.4 billion. IPO activity specifically was the powerhouse behind the exit value, but lacking post-IPO performances saw newly listed technology companies in the last six months struggling for potential debutantes. On a lighter note, in both count and capital female-founded companies broke records of their own. They set a new all-time high for venture capital dealmaking in 2019.
Looking towards the future, the combination of lacking contributions and strong distributions during Q1 2019 led to a pooling of cash with LPs likely to recommit it. If this pattern holds true then VC fundraising in 2020 is set to come close to 2018’s historic figures.
