Early-stage US tech deals (seed/angel and Series A) bounced back in March to 344, up from 261 in February. In all, there were only 886 early-stage tech deals in Q1’16, compared to 899 in Q1’15, and 1,215 in Q1’14.
Our analysis includes all equity funding rounds and convertible notes.
March 2016: $548M invested across 344 deals
Funding continued to fall for the second-consecutive month, reaching the lowest monthly dollar amount in two years and down 27% from February. Some of the largest early-stage rounds in March included Series A rounds raised by search engine company AlphaSense ($33M) and software startup Cockroach Labs ($20M).
Early-stage deals were up 32% in March from the previous month. Total deals reached an 8-quarter high.
Deals uptick in Q1’16
Deals were up 16% in Q1’16 compared to the previous quarter, after dropping to an eight-quarter low in Q4’15. But deal volume in Q1’16 was still down 27%compared to what was seen in Q1’14.
Median deals size drops 30% from February
Median early-stage deal size dropped to $2.1M in March, from $3M in February. There were around 60 $3M+ (seed/angel and Series A) deals in March, compared to over 80 such deals in February. The median early-stage tech deal size seen in March was the lowest since October 2015.
After peaking at $4.94M in January 2016, average deal size dropped for the second-consecutive month. Mean deal size in March was just $3.61M, the lowest monthly average size since August 2015, compared to $4.75M in February, consistent with the drop in total funding dollars and the increase in deals.
Seed deal size tumbles after reaching two-year high
Both mean and median seed deal sizes dropped in March to within a more typical range after reaching a two-year high the previous month. There were over 20 $3M+seed rounds in February 2016 (among the disclosed rounds), compared to just over 10 in March.
Average Series A deal size drops 23%
The average Series A deal size, which was on an upward trend this year, after falling in Q4’15, tumbled again in March to $6M. The largest Series A deal was the previously-mentioned $33M raised AlphaSense. In February, the largest Series A deal was a $45M round, which was raised by biomedical data analysis company Seven Bridges.
Deals in consumer products & services sees growth
Internet deals dominated deal share across all the months. Mobile and telecom deal share, which reached a two-year low of 18% in January 2016, bounced back and remained at 23% in both February and March.
The consumer products & services sector reached 5% deal share.
Internet, mobile dollar shares drop
Both internet and mobile & telecommunications dollar shares dropped by 6 percentage points each. Consumer products & services saw growth in terms of dollar share as well, reaching a new high at 10% in March, pushed by a couple of large deals including a $16M Series A to wearable company LifeBEAM and a $11M Series A to eye-tracking VR headset developer, Fove.
Largest early-stage tech deals in March
The previously-mentioned Series A rounds raised by AlphaSense (backed by Triangle Peak Partners, Tribeca Venture Partners) and Cockroach Labs (Benchmark Capital, FirstMark Capital, Google Ventures, Index Ventures, Sequoia Capital) were the top two tech deals in March. The rankings below are based on equity funding rounds raised.
|1||AlphaSense||Internet Software & Services||33|
|2||Cockroach Labs||Database Management Software||20|
|3||Convoy||Mobile Software & Services||16|
|6||Oro||Internet Software & Services||12|
|8||Avametric||Scientific, Engineering Software||10.5|
|9||Icebrg||Computer Networking Equipment||10|
|9||TurnKey Vacation Rentals||Internet Software & Services||10|
Most active investors
Innovation Works, which backed companies including The Efficiency Network and Covey; along with 500 Startups, which backed companies including Comparably and Tinkergarten, were the most active early-stage investors in March,
|1||Innovation Works||5||New Enterprise Associates|
|1||500 Startups||5||Founder Collective|
|3||Lerer Hippeau Ventures||5||First Round Capital|
|3||Techstars Ventures||5||Greylock Partners|
|5||BBG Ventures||5||Seven Peaks Ventures|
|5||KDWC Ventures||5||Khosla Ventures|
|5||FinTech Collective||5||FirstMark Capital|
|5||True Ventures||5||Wavemaker Partners|
Tech companies with highest momentum
We used CB Insights Mosaic algorithm to identify 20 early-stage companies with the highest momentum scores — a measure of a company’s traction based on social and news mentions, web traffic and jobs data, among other factors.
|Rank||Company||Select investors (March round)|
|1||Login to CB Insights||Login to CB Insights|
|2||Login to CB Insights||Login to CB Insights|
|3||Login to CB Insights||Login to CB Insights|
|4||PowerInbox||Battery Ventures, Gimv, Atlas Venture, Correlation Ventures, Genesis Partners, Longworth Venture Partners, Maverick Ventures|
|5||Havenly||Chicago Ventures, Binary Capital, Foundry Group|
|6||Scentbird||Eclipse Ventures, Scrum Ventures, Vaizra Investments, SGH Capital, Ludlow Ventures, FundersClub|
|7||HighGround||Lightbank, Columbus Nova Technology Partners, KDWC Ventures|
|7||goTenna||BBG Ventures, Walden Venture Capital, Kenneth Horowitz, Bloomberg Beta, Wareness.io, MentorTech Ventures|
|7||Fove||Hon Hai Precision Industry, 2020 Ventures, Colopl, Samsung Ventures|
|7||HelpShift||Plug and Play Accelerator|
|11||Lola||BBG Ventures, Vayner RSE, 14W, Lerer Hippeau Ventures, Brand Foundry Ventures, BoxGroup|
|12||Front Desk||Wavemaker Partners|
|12||Eight||Comcast Ventures, Stanford University, Galvanize, Vast Ventures, Cota Capital, Azure Capital Partners, Yunqui Partners, Y Combinator|
|14||Tinkergarten||City Light Capital, 500 Startups, Outbound Ventures, Omidyar Network, Blue Seed Collective|
|14||ChartIQ||Social Leverage, Illuminate Financial Management, ValueStream, Tribeca Angels|
|16||Dil Mil||CSC Venture Capital, Nelstone Ventures, Transmedia Capital, , Maiden Lane Ventures|
|16||BirdEye||Plug and Play Accelerator|
|18||RocksBox||SignalFire, Matrix Partners, KEC Ventures|