ICYMI: 2018 “One Heck Of A Year” For Venture Investment In Tech
A new Crunchbase analysis finds venture investment in the tech sector continues to thrive. 2018 was a “year of superlatives,” with the most money invested in the highest number of private tech company financing events ever and the largest VC deals in history.
As Slack CEO Stewart Butterfield noted in 2015, “It might be the best time for any kind of business, in any industry, to raise money for all of history, like since the time of the ancient Egyptians” – and 2018 data confirms that venture investment in tech is still in this sweet spot.
Crunchbase confirms the findings from Oliver Wyman’s 2018 report, confirming tech is an exceptional performer compared to VC investment trends.
Crunchbase’s analysis found U.S. startups dominate the venture capital funding race.
VC funding is expected to continue to thrive, with deal volume expected to grow substantially, led by angel and seed-stage funding.
2018 also saw an increase in “technology growth” deal value – that is, increased deal value for companies that have previously received venture backing.
Increased deal values, coupled with a decreasing number of deals, are indicative of a maturing sector, per Oliver Wyman. “Growing total deal value and a declining overall number of deals imply an increase in the average deal size. The increase in average deal size has been driven by a growing number of larger-ticket investments. Despite declining technological costs, average deal values have grown as a result of soaring marketing budgets for startups’ go-to-market strategies. Additionally, human capital costs are rising as innovation hits new levels and demand for talent increases. Industry perspectives also suggest that as funds increase in size the fund prerogative becomes to deploy larger amounts of capital per round, thus increasing deal size.”
According to Crunchbase, 2018 was a historic year for venture capital funding by a number of measures, especially for tech companies. “Make no bones about it: 2018 was one heck of a year for the global venture capital market, and the fourth quarter closed it out on strong footing. It was a year of superlatives: the most amount of money invested in the highest number of private tech company financing events on record; the largest venture capital deals in history; the rise and rise of supergiant venture rounds; and the elephantine funds that shake the market with every deal they make.”