Venture investors top $92 bln in 2018, setting 18-year U.S. record

Venture investors sprinted toward the finish line in 2018, placing nearly $22 billion with startups in the fourth quarter and pushing the year’s investment total above $92 billion six days before Christmas.

The year’s result is astonishing for two reasons. It comes as market turmoil spreads through public stocks and it approaches the $100 billion investment mark for the first time since 2000.

The Thomson Reuters data behind the numbers is updated through Dec. 19 and shows the preliminary quarterly investment total nationwide to be $21.9 billion, the smallest three-month period of the year, but not by much. While other data generators, such as PitchBook, may show a higher number, the conclusions are the same: 2018 activity accelerated from the already heightened levels of recent years with massive late-stage financings pumping more money into young companies.

The fourth quarter number is down 16 percent from the third quarter, but similar to the first and second quarters. It is likely to rise before the end of the year. Deal volume also is off 16 percent from the third quarter at 944, so far.

The quarter pushed the annual U.S. investment total to $92.3 billion, also a number that will likely climb. This is a record in the 18 years since investors steered $124.7 billion into startups in 2000. In that year, the deal total was 8,978, or more than 1.9x this year’s 4,657.

Fourth quarter investing was again dominated by technology, with almost two-thirds of the capital chasing startups in the tech sector. Life sciences investing captured 20 percent of the total.

Internet-focused companies received $4.5 billion of the technology total and biotech startups attracted $2.3 billion. The quarter saw big deals with Epic Games, Castle Creek Pharmaceuticals, Instacart and CourseStorm.