Private Tech Dollars Invested Reached New Heights
February 24, 2020 | Blog

Private Tech Dollars Invested Reached New Heights

The health of the venture capital markets was the focus of much conjecture in 2019. But despite the lackluster performance of certain high-profile IPO’s, the last year of the decade actually demonstrated a favorable trend. According to PitchBook and SharesPost data, 2019 set a new record for overall dollars invested in the sector, suggesting that gloomy funding forecasts may have been exaggerated. Furthermore, of the fifteen largest funding rounds in 2019, eight of them closed in the back half of the year –signaling a possible acceleration in 2020. For additional insights, let’s dig further into the data.

Total Funding vs. Deal Volume

Over the last ten years, investors have funneled nearly $430 billion into private tech companies, according to our analysis of Pitchbook data. While dollar volume has generally increased yearly, with a record $72.5 billion invested in 2019, the quantity of yearly deals has not followed the same trajectory. As illustrated in the chart below, the number of annual funding rounds has steadily decreased since peaking in 2015. Our analysis indicates that from 2009 to 2015, deal volume increased over 220% to 4,400 rounds, but has since decreased by more than 17% to 3,634 rounds in 2019.

As noted above, despite this decline in deal volume, total dollars invested has continued to climb to new levels. The reason for this trend is demonstrated in the second graph below.

As has been the case since 2013, the growth in total yearly funding has been driven primarily by an increase in the [size/number] of investments over $100 million. Moreover, dollars invested via these mega rounds have increased nearly 9x from 2013 to over $35 billion in 2019. Conversely, rounds smaller than $100 million have grown by only 85%. Thus, it appears that — where possible — investors are increasingly betting larger amounts on a smaller number of companies.

Looking Ahead

While 2019 didn’t experience the same growth in total funding as did 2018, the two preceding charts confirm that total funding for VC-backed tech companies still achieved an all-time high. 2020 should provide a clearer picture of investor appetite – we’ll report back with our findings.

Rounds with Largest Post-Money Valuations
Company Date Round Deal Size ($MM) Post-Money Valuation ($MM)
Stripe 09/19/2019 Series G $250 $35,250
Stripe 01/29/2019 Series F $100 $22,500
DoorDash 11/13/2019 Series G $700 $13,000
Ripple 12/20/2019 Series C $200 $10,200
Robinhood 10/31/2019 Series E $373 $7,600
DoorDash 02/21/2019 Series F $400 $7,100
UiPath 04/30/2019 Series D $568 $7,100
Automation Anywhere 11/21/2019 Series B $290 $6,800
Magic Leap 04/26/2019 Series D $280 $6,693
Samsara 09/10/2019 Series F $300 $6,300
Databricks 10/22/2019 Series F $400 $6,200
Chime 12/05/2019 Series E $500 $5,800
SoFi 05/29/2019 Series H $500 $4,800
Niantic 01/02/2019 Series C $245 $4,000
TripActions 07/10/2019 Series D $250 $4,000
Source: SharesPost; Pitchbook
Largest Funding Rounds
Company Date Round Deal Size ($MM)
Stripe 09/19/2019 Series G $250
Flexport 04/22/2019 Series D $1,000
Nuro 02/11/2019 Series B $940
DoorDash 11/13/2019 Series G $700
Bright Health 12/16/2019 Series D $635
Aurora Innovation 02/07/2019 Series B $600
UiPath 04/30/2019 Series D $568
Chime 12/05/2019 Series E $500
Magic Leap 11/18/2019 Series E $500
Mission Lane 09/16/2019 Series A $500
SoFi 05/29/2019 Series H $500
Convoy 11/13/2019 Series D $400
Databricks 10/22/2019 Series F $400
DoorDash 02/21/2019 Series F $400
Knock 01/15/2019 Series B $400
Automattic 12/26/2019 Series D $381
Source: SharesPost; Pitchbook
PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

This article does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2020. All rights reserved.

PLEASE READ THESE IMPORTANT LEGAL NOTICES & DISCLOSURES

This article does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.

Securities referenced in this article may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.

Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.

Accordingly, investing in private company securities is appropriate only for those investors who can tolerate a high degree of risk and do not require a liquid investment.

SharesPost, the SharesPost logo, My SharesPost, the SharesPost Index, and SharesPost Investment Management are all registered trademarks of SharesPost, Inc. All other trademarks are the property of their respective owners.

Copyright SharesPost, Inc. 2020. All rights reserved.