When GitHub raised a cool $100M from Andreessen Horowitz last year, the first round of funding was put in the books as a Series A round. GitHub was one upped only several months later, when Georgia-based mobile device management startup AirWatch raised a $225M Series A round this February.
But these aren’t the only supersized early stage rounds to take place recently. Earlier this year, mobile payments start-up Clinkle raised a $25M seed round. Redpoint Ventures VC Tomasz Tunguz speculated on the swelling Series A round recently, explaining the growth of two new types of Series A rounds:
The Juiced Series A ranges from $8 to $15M. Startups raising juiced Series As often have raised sizable seeds of $1.5M+, have teams approaching 20 people and have generated substantial market feedback. The check sizes resemble traditional Series B investments.
The Jumbo Series A weighs in at $15 to $60M. Jumbo Series A startups tend to have been bootstrapped for quite a long time. The business is often well into revenue, roughly speaking about $10M+, and is raising its first institutional capital to grow faster and bolster the balance sheet before an IPO.
Presumably, these new mega-rounds would’ve swelled early stage investment sizes over the past few years, but according to the data, these super-sized, jumbo and juiced Seed and Series A transactions are mostly outliers. Yes – they get a lot of attention because they are anomalies, but the reality is that average and median Seed and Series A transactions in technology remain largely within historical ranges.
The average Series A tech deal size stood at $4.4M in 2009 and has risen to just $5.1M in 2013 YTD. Over the same period, median Series A tech deal size increased just $350k from $3M to $3.35M. Meanwhile, average tech seed deal sizes, despite an explosion in sheer deal numbers, have stayed level at $810,000 while tech seed medians have moved a paltry $50,000.
Peeling back early-stage deal size by sector shows where deal sizes are growing or contracting. Internet seed deal averages have actually declined since 2009 going from $810,000 to $770,000 in 2013 YTD. Median seed deals sizes to the internet sector have also been relatively flat going from $500,000 in 2009 to just $530,000 in 2013 YTD.
Mobile seed deals while still smaller than their internet seed deal brethren have trended up over the same time period. Median seed deals to mobile climbed in 2009 from $410,000 to $520,000 and average mobile seed deal sizes grew from $650,000 to $830,000.
Within Series A, median deal sizes in the mobile sector are growing at a faster clip than those in the Internet sector. While the median Internet deal size in 2013 YTD is just 14% larger than that of 2009, the median deal size for Series A rounds in mobile companies is now 38% larger (but still much smaller at just over $1M).
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
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