Venture capitalists favored early-stage deals during Q1 2019, finds GlobalData

Early stage funding (Seed and Series A funding) rounds dominated venture capital (VC) funding across all the months in the first quarter (Q1) of 2019, according to GlobalData, a leading data and analytics company.

In total, 1,333 seed funding deals and 758 Series A deals were announced during Q1 2019, which collectively accounted for 77% of the total deal volume. In contrast, these deals collectively accounted for just 26.4% of the total deal value during the period.

Early stage funding as a proportion of total VC deals decreased from 78.2% in January to 76.1% in February before posting a marginal growth to 76.6% in March 2019. In contrast, Series B and Series C as a proportion of total VC deals registered consistent growth during the three months. While the share of Series B rounds grew from 12.4% in January to 12.9% in February and 13.2% in March, the share of Series C rounds increased from 5.6% in January to 6.2% in February and 6.6% in March 2019.

Q1 2019 also witnessed 15 US$100m+ deals in early stage funding rounds. Some of the such deals included Series A funding of US$355.9m raised by Zhunshida Electronic (Jusda), a provider of Internet platform for B2B international supply chain management companies; Series A US$120m secured by China-based Mogu Zhixing (Zhidao Network), an IoT enabled auto services startup; and Series A funding of US$104m raised by AutoAI, a provider of integrated Internet of Vehicle (IOV) solutions, based on big data and smart cloud platform.

IMAGE FOR PUBLICATION: Global VC Round of Financing Analysis: Q1 2019

The US was the top startup hub attracting more than 50% of early stage funding volume and 60% of early stage funding value in Q1 2019. China, India, the UK and Switzerland were other top countries to attract early stage funding by VC firms.

Among all the months in Q1 2019, January witnessed the highest number of Series A deals. A total of 949 deals with disclosed funding rounds were announced during the month, out of which, seed and Series A deals accounted for 50.3% and 27.9% share, respectively. However, these early stage funding deals collectively accounted for just 29.2% of total deal value. This month also witnessed one each of Series F and Series J deal.

In January 2019, the US attracted little more than 50% of early stage funding volume and 54.7% of early stage funding value. In volume terms, China and India occupied second and third positions. In value terms, the US was followed by China and the UK. Key investors in early stage start-ups in January 2019 included New Enterprise Associates, Shenzhen Capital Group, Village Global VC, Baidu Ventures and High-Tech Grunderfonds Management.

The number of deals with disclosed funding rounds witnessed a decline of 14.3% in February 2019 as compared to the previous month. A total of 813 deals were announced during the month, out of which, seed and Series A deals accounted for 46% and 30.1% share, respectively. However, these early stage funding deals collectively accounted for just 24.9% of total deal value. This month also witnessed five Series F, one Series I and two Series J deals.

In February 2019, the US attracted 52.8% of early stage funding volume and 55.8% of early stage funding value. In volume terms, China and the UK occupied the second and third positions. In value terms, the US was followed by China and Switzerland. Key investors in early stage start-ups in February 2019 included, Y Combinator Management, Phandeeyar Accelerator, Bowery Capital Management, Bessemer Venture Partners and Canaan Partners.

Among all the months in Q1 2019, March witnessed the highest number of deals with disclosed funding rounds. Deal volume increased by 17.2% during this month as compared with the previous month. In total, 953 deals were announced during this month, out of which seed and Series A deals accounted for 50.6% and 26% share, respectively. However, these early stage funding deals collectively accounted for just 25.1% of total deal value. This month also witnessed four Series F, one Series G and one Series H deal.

In March 2019, the US attracted 55.1% of early stage funding volume and 70.9% of early stage funding value. In volume terms, China and India occupied second and third positions. In value terms, the US was followed by China and the UK. Key investors in early stage start-ups in March 2019 included, Y Combinator, BSE CSR Integrated Foundation, Stadia Accelerator, IDG Capital and AngelPad.

Aurojyoti Bose, Financial Deals Analyst at GlobalData, says: “Going forward, we might not see VC investors committing large funds. Global cues such as uncertainties over Brexit, economic slowdown in China and several European countries, and ongoing trade wars among several countries, more specifically Sino-US trade war, may dent investor sentiments.”

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