The first quarter 2020 PwC/CB Insights MoneyTree Report for the first quarter of 2020 provides insights on the level of venture funding.
US venture capital deal activity has declined for three straight quarters, with 1,533 deals raising $28.6 billion, 1,399 deals raising $23.3 billion, and 1,271 deals raising $26.4 billion raised, respectively, in each of the last three quarters ended with first quarter 2020. Deal activity in 2020 was off to its slowest start since first quarter of 2013. However, despite these declines, VC funding is still above quarterly averages compared to prior periods in the last five years. Seed deals saw the sharpest declines, while later stage growth deals (Series E and above) increased slightly during the first quarter 2020. Mega-rounds increased during the first quarter 2020, with 58 deals completed raising $12 billion.
The five largest deals in the United States in the first quarter 2020 (each raising more than $450 million) included JUUL Labs, Joby Aviation, Impossible Foods, Lyell Immunopharma, and Snowflake Computing. Internet SaaS and healthcare companies attracted the most capital. Nearly half of all US funding during the first quarter 2020 came from mega-rounds. Unicorn births declined during the first quarter 2020, with only 12 newly minted unicorns. The top valued US unicorns remain unchanged from late 2019 and include JUUL Labs, Stripe, Airbnb, SpaceX, and Palantir Technologies. The number of M&A exits remained flat in the first quarter 2020 compared to fourth quarter 2020, with 154 exits, and exits occurring on average seven years from inception. As we have previously reported, the number of IPOs fell in the first quarter 2020 to 15—so while there were fewer IPOs in Q1 2020, the number of M&A exits remained virtually flat.
Globally deal activity and funding both declined year over year, with the largest decline occurring in Asia.