Q1 investing tops $21 bln for 2nd time since dot-com bubble

Venture investing jumped close to an 18-year high in the first quarter with big-money rounds leading deal value to an extraordinary $21.1 billion, according to a VCJ analysis of preliminary data from Thomson Reuters.

The quarter was only the second since the peak of the dot-com bubble to see investments in the United States exceed $21 billion. The last time was in the second quarter of 2015, when deal making added up to $21.26 billion, just slightly higher, the data shows.

Investments in the fourth quarter of 2000 reached $25.58 billion.

The period felt the impact of a near record of deals $100 million in size and larger. During the year’s first three months, 36 U.S.-based companies raised these mega rounds, including Uber, which chalked up the biggest transaction of the period at $1.25 billion. Also raising substantial rounds were Katerra, Doordash, Magic Leap and Wags Labs. (See the chart below for a full list).

The last time more companies raised $100 million or larger in deals was the third quarter of 2000.

The strong quarter sets the year on pace to rival, or perhaps, top last year’s $70.1 billion of investments, the largest year since 2000. It suggests investors are no less hesitant than last year to sign onto large private rounds for fast growing, seemingly disruptive companies.

And yet while dollars flowed, deal volume sank. The number of first-quarter deals fell 12 percent from the fourth quarter to 939, even as deal value rose 16 percent, according to the data.

For the quarter, information technology companies captured 56 percent of the capital and healthcare companies, 26 percent. California businesses attracted 58 percent of investments, followed by those in Massachusetts, which captured 10.5 percent, and then New York, 10.2 percent.

The quarter also saw another superlative. The period saw Asian deal making exceed deal making in North America. Asian investors backed 1,359 deals with $21.9 billion, compared with the 1,142 deals and $21.4 billion put to work in North America, according to Preqin.

“This year may be the year in which Asia overtakes North America as the most prominent region for venture capital deal activity,” said Felice Egidio, Preqin’s head of venture capital products, in a research note.

Download an Excel spreadsheet of top U.S.-based deals in Q1: Venture capital deals over $100 mln (Q1 2018)

Photo of 3D illustration of dollars stairway and upward arrow courtesy of Alexyndr/iStock/Getty Images.