Venture slump overstated as growth-round deal-making rises

Venture capitalists went through a highly publicized pullback early this year, but the extent of the caution wasn’t as dramatic as it might have been.

The number of expansion and later-stage funding rounds for U.S.-based deals held steady during the first quarter, according to preliminary data from Thomson Reuters. A combined 426 deals took place, essentially unchanged from the fourth quarter and hardly the collapse some had feared.

In addition, the dollar amount for expansion and later-round fundings in the United States actually rose in the first quarter from the fourth quarter.

While this is down from the middle of last year, it still brought almost $7.3 billion to expansion and later-stage companies in the United States. That figure is up 16 percent from the fourth quarter, according to the preliminary Q1 data.

Clearly, public-market volatility led many VCs to rethink high-flying private-market valuations in January and February, as well as the overall pace of investing. Private-market sentiment seems to have opened up a bit since then.

Even deals with round sizes of $100 million or more were relatively stable quarter to quarter, with nine in the first quarter compared with 11 in the fourth quarter, according to the data. Of course, this deal pace is off by roughly two-thirds since the middle of last year.

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