Quarterly funding to VC-backed companies fell 14% in Q3’16 to $24.1B, the lowest total since Q3’14. This represents a drop of almost 40% since the global peak of $39.6B in Q3’15, according to the quarterly KPMG International and CB Insights Venture Pulse Report.
At the same time, deal count picked up slightly to 1,983 deals, from 1,978 deals in Q2’16. However, this is the first time since 2013 that VCs participated in fewer than 2,000 deals for two consecutive quarters.
Global quarterly deals and dollars
Overall, deal activity remained stable from the quarter prior, but still well below the levels seen from Q2’14 to Q3’15. Meanwhile, dollars invested in VC-backed companies slipped to $24.1B, the lowest quarterly funding total since Q3’14.
Global annual deals and dollars
While 2015 was a record year both in terms of deals and dollars invested in VC-backed companies, 2016 continues to see a noticeable pullback in activity. At the current run-rates, both deal count and total global funding are expected to fall significantly under last year’s figures.
Global median early-stage deal size
The global median early-stage deal size fell slightly in Q3’16. Globally, early-stage (Seed-Series A) deals to VC-backed companies hit a median of $2.3M in the first 2 quarters of 2016, but have since dipped to $2.2M in Q3’16.
Global median late-stage deal size
After a temporary reversal last quarter, late-stage deal sizes have resumed their downward march from the Q3’15 peak, dropping to a five-quarter low in Q3’16. The Q3’16 median of $22.1M is now down 37% from the much larger sizes seen a year ago.
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