US & Canada VCs favor late-stage giants over upstarts in Q4

TechCrunch | 1/13/2018 | Joanna Glasner
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Joanna Glasner is a reporter for Crunchbase.

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Startup - Investors - US - Canada - Money

Startup investors in the U.S. and Canada have been putting a little less money to work across a lot fewer deals in recent months.

Overall, investors put a projected $21.9 billion into seed through technology growth-stage rounds in Q4, down from a projected $28.1 billion in Q3. Deal count fell most markedly at the earliest stages, with the projected number of closed rounds for seed-stage startups down by more than one-third from the prior quarter.

Q4 - Pullback - Contrasts - Comparables - Year

The Q4 pullback contrasts with upbeat comparables for the full year. For all of 2017, U.S. and Canadian startup investors put a projected $89.4 billion to work, up from $82 billion in all of 2016. A smattering of really big, mostly late-stage rounds, boosted by SoftBank’s unprecedented spending spree, contributed to the higher annual totals.

Below, we look at some of the key data points for the just-ended quarter and year, including early and late-stage funding, round counts, M&A and IPOs.

Investment - Totals - Quarter - Year - Broadly

First, we’ll look at investment totals for the quarter and full year. Broadly, Q4 showed some pullback from Q3, but projected investment totals were still up year-over-year across most stages for 2017.

Let’s start with Q4 numbers. Out of the $21.9 billion in projected total investment for the quarter, about 44 percent, or $9.7 billion, went to late-stage deals.

Early-stage - Series - A - B - Q4

Early-stage (Series A and B) rounds, meanwhile, drew $8.7 billion in Q4, boosted by some unusually large deals. Seed and angel deals, which are always the smallest in dollar terms of any stage, brought in a projected $886 million.

In the chart below, we look at investment totals by stage for Q4 and the preceding four quarters. It should be noted from this that the notion of a Q4 pullback is relative. The third quarter of 2017 was a particularly strong one...
(Excerpt) Read more at: TechCrunch
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