Data for venture capital deals for the first quarter from Pitchbook is in, and it lines up with predictions: There's been no flurry of activity to be seen.
There were 169 deals in Massachusetts in Q1 2024, down from 232 in Q4 2023, according to a new report from Pitchbook and the National Venture Capital Association. In the first quarter of 2023, deal activity came in at 210. The last time deal count in the Bay State came in at less than 170 for a quarter was Q3 of 2016.
This Massachusetts slump is in line with national trends. Across the U.S., venture capital deal activity in Q1 2024 was at the lowest level it has been since 2017.
Just over $3.1 billion in capital was invested in Massachusetts companies in Q1 2024, not too far off from the $3.5 billion in capital invested in Q4 2023. In Q1 2023, capital invested totaled $3.7 billion. The monetary figures for both of those quarters is significantly down from highs in 2021 and 2022, where some quarters saw over $8 or 9 billion in capital invested, and more than 300 deals per quarter, according to Pitchbook.
Exit flow, however, was up slightly. According to Pitchbook data, there were 17 exits in Q1 2024, compared to 13 in Q4 2023, and 16 in Q1 2023. Exit value for the quarter total just over $1 billion.
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At the end of 2023, Pitchbook predicted deal activity and value would remain relatively quiet due to high interest rates and political risk. Most of the concerns remain the same, according to Pitchbook, with an added challenge of proposed government actions that could result in both founders and investors having to dedicate more time to regulatory paperwork.
Still, according to an executive summary accompanying the report, NVCA leaders say capital calls are reportedly up this quarter, and there is anticipation that this will bring on some more action in the industry.
“It is too early to tell where 2024 is going, but the game is on, and America’s VCs are ready for it. In 2022, our world changed; in 2023, we accepted it was not changing back; and in 2024, we are building what is next,” said NVCA president and CEO Bobby Franklin in a statement accompanying the report.
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