In the first three months of this year, investors concentrated their bets as the VC and startup ecosystem felt the ripple effect of the pandemic.
In Q1’20, VC-backed US startups raised fewer deals than in previous quarters, but funding remained strong due to an uptick in mega-rounds.
VC deal activity declined in the US, with 1,271 deals completed in the first quarter. In Q1’20, deals fell 16% compared to the year prior and 9% versus Q4’19, likely due in part to the Covid-19 pandemic, although deals have been on the decline for 3 consecutive quarters.
Funding, however, increased 14% QoQ to $26.4B, in part due to the increase in mega-rounds in the quarter.
Mega-rounds — financings of $100M or more — hit 58 rounds in Q1’20, up nearly 50% compared to the prior quarter. These large financings made up 45% of total funding in the quarter.
The largest US-based rounds of the quarter included a $700M round to e-cigarette company Juul Labs, a $590M Series C to air taxi startup Joby Aviation, and a $500M Series F to plant-based meat company Impossible Foods.
However, of the top 5 largest rounds , only 2 — Impossible Food’s Series F and biotech startup Lyell Immunopharma’s $493M Series C — happened in March, which may indicate a slowdown in Q2 due to the pandemic.
Take a look at all the underlying data and more insights in our PwC / CB Insights MoneyTree Report™ Q1 2020.
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