Data Shows A Slightly Diminished Role For ‘Supergiant’ Rounds Of $100M Or More In Driving VC Dollar Volume Worldwide

Nobody is saying that $100 million isn’t a lot of money. It is, to be sure. But in startup land it has become a regular (though still relatively rare) occurrence for private companies to raise that much money in a single round of funding.

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Although $100 million is ultimately an arbitrary number, it’s the one we’ve used as the threshold for describing venture capital rounds as “supergiant,” a reference to the most massive and brightest stars in our universe.

According to Crunchbase data at the time of writing, 455 supergiant rounds were struck in 2019, representing nearly $108 billion in reported venture capital dollar volume. That’s down from 2018’s 467 supergiant rounds totaling nearly $148 billion in reported dollar volume. These numbers might change slightly over time as new historical data gets added to Crunchbase or existing rounds get reclassified as more details of those transactions emerge.

At Crunchbase News we’ve written a lot about this phenomenon. We were among the first to document the takeover of venture capital by these massive nine-, 10 and 11-figure deals. (Data shows the takeover started in or around 2013.) We’ve also found they’re not limited to late-stage deal-making. We’ve also tracked geographic trends over time.

The Balance of Power Shifts

The U.S. and China, the world’s two largest economies, are where the trend took off. However, economic volatility in China and the rise of emerging startup markets outside traditional hubs has led to a shift in the “balance of power” in the global venture capital market.

Aggregated data, fresh from early January 2020, shows a continuation of two trends and shows another:

• The large but slightly diminished influence of supergiant venture capital deals in 2019 as compared to 2018.
• The decline of China’s venture capital market amid a continued rise of startup markets outside the U.S. and China
• The outsized chunk of funding attributable to supergiant venture capital rounds in driving growth in emerging markets’ dollar volume totals.

Supergiant venture capital deals accounted for roughly 47 percent of the dollar volume reported for 2019. (Remember that more data may be added over time.) That’s down from 51 percent in 2018. It’s remarkable to think that fewer than 500 deals accounted for a majority of known VC funding in a given year, but that’s just the kind of market we’re in lately.

In combined venture funding, Chinese startups represented roughly 25 percent of known dollar volume in 2018, which, as a reminder, is projected by Crunchbase to be the largest on record. Chinese startups’ share of total reported dollar volume fell to about 17 percent in 2019. A dip in supergiant deal volume is a main driver of declines in China’s overall market as the Chinese economy shows signs of slowing.

Data points to the important role supergiant venture capital rounds play in putting smaller markets on the map, as it were. From 2017 onward, supergiant venture rounds represented a majority of capital raised by startups outside the U.S. or China. It’s unclear whether that trend will continue into 2020, but momentum (and geographic diversity) suggests that the odds are in favor of emerging markets going forward.

Late into a bullish economic cycle in the United States, the rest of the world is on the rise. Startup markets in Latin America, Australia, Africa and Europe are picking up the size of their checks and the pace of deal-making.

Even if there’s a slowdown in the world’s leading economy in the coming years, it’s not like the bottom of the global venture market is going to fall out overnight. The U.S. is likely to remain the largest single market for venture capital in the world for some time to come, even if its slice of the pie may be shrinking.

Illustration: Li-Anne Dias