Venture capital investments into U.S. startups are flying high, but follow a pattern: concentrating the capital into fewer, larger investments.
A new report released on Tuesday by PitchBook and the National Venture Capital Association showed that through the third quarter of 2018, $50 million+ deals closed, reaching 378 rounds and already surpassing the 292 closed in full-year 2017.
Capital investment in Q3 topped $27.9 billion, pushing year-to-date 2018 deal value to $84.3 billion; a record amount of capital raised with a quarter remaining, the report noted.
Also notably, the number of seed-stage investments has moderated, as the wave of new angel and seed investors that drove up activity for several years has reduced, according to the report.
The 3Q 2018 PitchBook-NVCA Venture Monitor, which provides a complete overview of VC activity through Q3 of 2018, also included Massachusetts-specific data about investments, exits and other relevant industry analysis.
Here's a breakdown of the local data included in the report:
Deal Flow
In Massachusetts, Q3 2018 marks a strong capital investment in total, with $2.8 billion invested in 142 deals. Compared to last year, the total capital invested is higher (it was $$2.3 billion in Q3 2017), but it financed a slightly smaller number of deals (142 in 2018 compared to 146 in 2017).
As for the metropolitan statistical area breakdown, the Boston-Cambridge-Quincy area confirmed the state trend with $2.8 billion of capital investment spread across 138 deals, up from $2.3 billion and down from 141 deals in Q3 last year.
Top U.S. Deals
No Massachusetts company made it to the chart of top U.S. VC deals in Q3 2018, which includes only New York and California startups (including Peloton's $550 million Series F round and Zoox $500 million Series B round). However, a local company occupies the No. 13 spot in the ranking of top U.S. VC deals 2018 year to date: it's Cambridge-based biotech unicorn Moderna Therapeutics, which raised $500 million in February.
Top Deals in Mass. during Q3 2018
Agtech unicorn Indigo, biotech startup Compass Therapeutics and restaurant management platform Toast signed the top three Massachusetts deals in July, August and September this year.
- Indigo Agriculture, 9/28, deal size: $250 million
- Compass Therapeutics, 7/12, deal size: $132 million
- Toast, 7/10, deal size: $115 million
- Starry, 7/3, deal size: $100 million
- Flywire, 7/26, deal size: $100 million
Top Exits in Mass. during Q3 2018
Quick takeaway from the following chart: the top three exits in Mass. during the past three months are all in biotech.
- Rubius Therapeutics, 7/18, deal size: $1.54 billion
- Agilis Biotherapeutics, 8/25, deal size: $945 million
- Exosome Diagnostics, 8/1, deal size: $575 million
- Visterra, 8/31, deal size: $430 million
- Replimune, 7/20, deal size: $362 million
The full report is available for download here.
