Global venture capital-backed deal activity increased in the first quarter, with 2,420 deals recorded worth a combined $31 billion, alternatives data provider Preqin reported this week.
Deal activity was ahead of that in the third and fourth quarters, but below the $40 billion recorded in last year’s opening quarter.
KPMG noted in a January report that after the strong start to 2016, investor optimism quickly waned and purse strings tightened in the second half.
“The venture capital industry has been seeing a period of consistent, strong deal activity over recent months,” Felice Egidio, Preqin’s head of venture capital products, said in a statement.
“The first quarter of 2017 is another robust quarter in this vein, but some will wonder if the industry can match the heights seen in 2015 and 2016. Activity slowed in the second half of last year and has yet to fully regain momentum, perhaps due to the ever-increasing competition presented by retail and strategic investors.”
Now, PitchBook foresees a year of resurgence for U.S. venture capital in 2017.
Preqin also reported that 277 exits took place in the first quarter for a combined $17 billion, again below the year-ago level. Of these, 166 exits took place in North America, accounting for $14 billion.
Three U.S. companies had the biggest exits. AppDynamics Inc., acquired by Cisco Systems on Jan. 17, was valued at $3.7 billion; Snap Inc. was valued at $3.4 billion in a partial flotation on March 17; and ZELTIQ Aesthetics Inc., acquired by Allergan on Feb. 17, was valued at $2.5 billion.
Key Q1 Facts