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Early-stage deals see jump in Q1 valuations

As venture capitalists across the country poured money into large expansion-stage and later-stage rounds in the first quarter, they also, for a change, opened the faucet for early-stage companies.

Dollars earmarked for early-stage startups based in the United State rose 27 percent in the period to $4.03 billion, the largest quarter for early-stage investments since the fourth quarter of 2000, according to the MoneyTree Report from PricewaterhouseCoopers and CB Insights. This is much faster than the quarter’s overall increase in invested capital of 4 percent.

The rise suggests the competition that has pushed valuations higher at the later stages of venture capital may have finally spilled over into early stage. The result is that the average early-stage round rose to $13.3 million, compared with $9.9 million in the fourth quarter and $8.5 million for all of 2017.

Deal volume sank as well to 303 transactions, a 6 percent decline from the fourth quarter and the lowest quarterly total in slightly more than a year, the report found.

The push toward larger early-stage rounds mirrors a trend at the later stage. The quarter was the second in a row with more than 30 mega rounds of $100 million or more, with 34 of these large rounds completed. Included were deals with Uber, DoorDash and Moderna Therapeutics.

Two large early-stage rounds in healthcare contributed to the quarterly total. Viela Bio raised $250 million and Celularity raised $210 million, the report said.

Photo of money pouring out of a metal faucet courtesy of Stefano Spicca/iStock/Getty Images.