North American Venture Funding Was Below Peak In Q4, But 2019 Totals Are Still Near Highs

The quarter delivers a slight downer of an ending to a bullish year for startup investment, with funding totals for all of 2019 forecast to come in a bit above year-ago levels.

Altogether, startup backers invested $31.6 billion across all stages in the fourth quarter, down slightly from the prior quarter and well below year-ago levels.

For all of 2019, meanwhile, Crunchbase projects that investors put roughly $132 billion to work across all stages, relatively flat with the prior year.

As usual, a handful of gigantic rounds boosted investment totals and a few really big exits juiced returns.

Below, we look at numbers and key deals in more detail, breaking down investment totals by stage, highlighting largest rounds and tallying up IPOs and acquisitions.

Crunchbase projects that just over $16 billion will go into late-stage venture rounds (Series C and beyond) for North American companies in Q4.

For Q4, the largest later-stage rounds included health insurance provider Bright Health ($635M), online banking startup Chime ($500M), digital freight network Convoy ($400M) and analytics platform Databricks ($400M).

We chart out late-stage investment totals and round counts for the past five quarters in more detail below.

That puts Q4 in the middle of the pack for the past five quarters, by both investment totals and round counts, as illustrated in the chart below.

Early-stage investment rose quarter-over-quarter in Q4, per Crunchbase projections, but it’s still at the second-lowest point in the past five quarters, indicating funding levels have passed their peak.

Altogether, investors put an estimated $11.85 billion into early-stage (Series A and B) rounds in Q4, per projections.

For perspective, we charted out both investment totals and round counts for the past five quarters below.

One could make the case that Q4 early-stage totals are a bit over-inflated due to the frequency of really large Series A and B rounds going to more mature companies that bootstrapped before raising venture capital.

Other large early-stage funding recipients include oncology startup Nuvation Bio ($275M) and brand marketing platform You & Mr Jones ($200M).

Crunchbase projects Q4 investment of around $2 billion, the highest total in the past five quarters.

We track both investment and round counts for seed-stage deals over the past five quarters in the chart below.

For both those years, Crunchbase projects total annual investment of over $130 billion.

For all of 2019, Crunchbase projects just shy of 13,000 funding rounds across all stages.

Keep in mind, however, that funding increases are due in part to some shifts in the startup asset class, including the rise of unicorn herds, the propensity of high-valuation private companies to delay IPOs and the increase in investors willing to back supergiant rounds of $100 million or more.

Altogether, a staggering 200 North American companies closed funding rounds of $100 million or more this past year, per Crunchbase data.

Crunchbase also includes venture rounds of unknown series, transactions of undisclosed type, and convertible notes totaling $1 million (USD or as-converted USD equivalent) or less.

Equity crowdfunding rounds with no listed dollar value, as well as those totaling less than $5 million, are also counted as seed-stage.

Crunchbase includes venture rounds of unknown series, transactions of undisclosed type, and convertible notes totaling between $1,000,001 and $15,000,000.

Note: Fundings denoted by Crunchbase as corporate rounds are not included in Crunchbase stage classification metrics and therefore do not get included in annual and quarterly startup investment totals.

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