Venture capital investment volume, both in the Seattle area and nationwide, continued the same upward trajectory set in 2018, but overall deal count was down significantly nationally, raising concerns that many startup companies are being left at the altar.
Nationwide, venture capital investment in the first quarter of this year totaled $32.6 billion, with the West Coast region ― Washington, Oregon, Alaska, Hawaii and California ― accounting for nearly 47 percent of all deal value for the quarter, a new report by Seattle-based Pitchbook reveals. The first-quarter VC performance continued at the same sizzling pace set in 2018, when VC investments reached nearly $131 billion for the year, surpassing the dot-com era, according to Pitchbook.
Venture capital investments in the Seattle-Tacoma region in first-quarter 2019 totaled $474 million across 44 deals, up from $308 million across 38 deals for the year-earlier period, according to a separate report by PwC/CB Insights Money Tree.
Unlike in the Seattle area, overall first-quarter 2019 deal count, however, was down nationwide, at 1,853 deals, the lowest quarterly mark in at least the past five years, Pitchbook reports. The PwC/CB Insights Money Tree report shows a similar national pattern with respect to VC deal count.
VC deal value nationally for first-quarter 2019, according to the Money Tree data, totaled $24.6 billion, up from $22.8 billion in the year-earlier quarter. The Money Tree report, however, also records a downward tick in overall deal count for the first quarter― at 1,279 deals nationwide, the lowest quarterly mark since at least second-quarter 2017, according to their data.
“Larger deals continue to drive elevated total deal value,” Pitchbook states. “Once upon a time, a $100 million investment round was a rarity. Now $100 million rounds have become almost a daily occurrence, a trend that continued in the first quarter of 2019.”
Pitchbook notes that some investors see the reduction in deal count as a sign of a growing division between the “haves and have nots in the startup ecosystem.” Even in the Seattle area, access to VC funding can be problematic for some industry sectors. Christopher Richins, founder and chief executive officers of Redmond, Washington-based RBC Signals, which provides satellite ground-station access as a service, says many companies in the Puget Sound region’s thriving space-business industry have had a hard time finding venture capital locally.
RBC, founded in 2015, has raised about $3 million in investment capital to date, Richins says, and is currently pursuing a Series A funding round in which it seeks to raise “in the high single-digit millions.”
“Seattle investors have been historically less enthusiastic about investing in space and space technology,” Richins says. “Certainly, individual investors have participated, but in terms of venture and startup investment, a lot of the space companies have had to go to other more well-established financing areas to get funded.”
The Pitchbook report also looked at VC investment in female-founded companies, which in first-quarter 2019 attracted 2.2 percent of total VC deal value and 5.5 percent of the total VC deals, according to the VC report. The Bay Area metro leads the nation in VC investments in companies with all female founders, at $4.5 billion between 2006 and first-quarter 2019, followed by New York, at $3.3 billion; and Boston, at $1.3 billion.