Venture

Supergiant VC Activity Shrinks Back From July Highs

We’ve been covering supergiant funding rounds of $100 million or more for months now.

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In early August, we filed a report indicating that July 2018 set a record for the number of nine-figure rounds raised worldwide that month. Indeed, with over 55 rounds accounting for just around $15 billion in venture capital deal flow, July was a good time to raise $100 million or more.

Was August, though? A few days into the ninth month of 2018, we can say the short answer is nope, not really. Does that matter? No.

Before getting into why, let’s take a look at the numbers. The chart below shows the count of supergiant rounds, by month, based on current data.

At the time of writing, Crunchbase recorded a total of 43 venture capital rounds raising $100 million or more. In sum, these deals raked in nearly $12.5 billion in funding. That marks an approximately twenty percent decline, month-on-month, in both supergiant VC deal and dollar volume.

Why the pullback? It’s tough to say. Tech-heavy public market indices like the NASDAQ Composite are sitting at or near all-time highs. There were some disappointments during earnings season, but nothing remarkable. Interest rates are rising, slowly, but money is still cheap. In other words, the usual stops along this train of thought turn up empty.

But a funding round announcement does not mean checks were cashed on the same day. It’s possible that startups, which had otherwise planned to disclose their rounds later, jumped on some funding announcement bandwagon. The dearth of August announcements may be found in July’s glut, but there’s no handy way to prove that.

However, it’s important to remember that venture capital is a slow-moving market. Month-to-month changes are basically random. It won’t be for another couple months until we see if the previously upward trend in supergiant VC deal activity traces a new path downward.

iStockPhoto / Yuri_Arcurs