In 2018, $100M+ mega-rounds hit a new high as median deal sizes across every investment stage crept up in the fourth quarter.
A few years ago, it looked as though the trend towards $100M+ rounds might be cooling off.
But in Q4’18, it became clear that not only is the mega-round back, but that the median deal, across the board, is getting bigger.
Companies in the US raised a record 184 mega-rounds in 2018, up from 120 in 2017 and just 66 in 2016.
In 2018, total venture funding in the US hit $99.5B — up 30% from 2017 — across just 5,536 deals. That was the lowest annual deal count in the US since 2013, when VCs completed 5,176 deals.
We saw the same kind of growth internationally, with a record 382 global mega-rounds, up from 266 in 2017.
Driving this trend is an increasing amount of capital going to companies raising expansion- or late-stage rounds — and a decreased amount of cash going into traditional seed-stage rounds.
US seed-stage deals made up 34% — 36% of all fundraising each year from 2013 to 2016.
In 2018, however, seed-stage fundraising fell to just 25% of all VC money raised, while the proportion of expansion-stage funding increased to 23% (a 4 percentage point increase YoY).
Across every stage, median US deal sizes increased in Q4’18. Expansion-stage deals hit a median size of $20M, up $4M from Q3’18. Later-stage median deal size rose to $37.5M, up from $32.4M in Q3’18.
Median sizes of seed- and early-stage raises also saw increases over the same period — growing from $1.7M to $2.1M and $6.5M to $8M, respectively.
With private tech CEOs still hesitant to jump into public markets, and money from VCs and international funds still highly available, it’s likely that this trend towards larger rounds at every stage — and a corresponding increase in $100M+ mega-rounds — could continue in the coming year.