Big money is looking for big opportunities in privately-held startups.
That’s one key data point coming out of a new report from CB Insights, which found that VC-backed companies in the U.S. hauled in a whopping $17.7 billion during the first quarter. That was up from $12.6 billion in the first quarter of 2014.
There’s one key thing to consider in this figure and the chart above: The dollar totals include investments from deep-pocketed investors such as hedge funds, private equity, mutual funds and sovereign wealth funds, which are radically changing the dynamic of the startup investment scene.
When you exclude those types of investors, the venture capital haul tallied $11.3 billion, according to CB Insights.
One other key trend also stands out: The number of deals continues to decline. In the first quarter, venture capitalists completed 805 deals. That was down from 918 in the first quarter of 2014.
We’ve written about this shift in the past, noting how huge late-stage financing rounds — going into companies like Airbnb, Pinterest, Redfin and others — are having an outsized impact on the industry. As further evidence of that trend, there were seven companies that received venture capital at a valuation of more than $1 billion during the first quarter, and just one company that went public at more than $1 billion valuation (Box).
California remains the king of the venture capital mountain, accounting for 53 percent of all dollars. That was followed by New York and Massachusetts, which each held a seven percent share, and then Texas and Washington, which each held four percent.
Venture capital dollars in Washington state showed a healthy increase during the first quarter, helped in part by cannabis investment firm Privateer Holdings (which raised $75 million); home improvement startup Porch (which raised $65 million) tax automation software maker Avalara (which raised $42 million) and data storage startup Qumulo (which raised $40 million).
Here’s a look at how VCs allocated dollars in Washington state. (The big “other” likely is due to the investment in Privateer).
