In keeping with global trends, VCs have slowed their investments into US private companies. While there were a few bright spots, our 2016 MoneyTree Venture Capital Funding Report, in partnership with PwC, shows that both deals and dollars are down overall within the US. Vibrant tech hubs in New York and California haven’t been spared, though the DC/Metroplex area saw a spike in funding.
Overall Financing Trends
Investors are playing it safer when it comes to investing in US companies. Financing to US VC-backed companies declined over 2016, especially in Q4. In fact, quarterly deal count slipped in every quarter in 2016, culminating with quarterly deals and dollars each reaching 8-quarter lows in Q4.
US Mega-Round and Unicorn Trends
Keeping in step with the general decline of US investing, mega-rounds (funding rounds valued at over $100M) dropped to a 5-quarter low in Q4 ’16 with just 11. The five outliers scoring the biggest, later-stage funding rounds were OneWeb, WeWork, OpenDoor Labs, Intarcia Therapeutics, and Buzzfeed. Other notable mega rounds include on-demand delivery company Postmates, which raised a $141M round, and Unity Biotechnology, which pulled in $116M, both in Q4.
US unicorn births — private companies that hit a billion-dollar or more valuation — also slowed significantly in 2016. Only 4 new unicorns were minted in Q4, including California’s Procore Technologies and OpenDoor Labs. In total, 101 US unicorns were minted in 2016.
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