Skip to main content

Supergiant VC rounds aren’t just raised in China

In the venture capital market, big is in. Firms are raising significant sums to finance a growing number of large startup funding rounds.

In July, there were 55 venture rounds, worldwide, which topped out at $100 million or more, totaling just over $15 billion raised in nine and 10-figure mega-rounds alone. This set a record for venture dealmaking.

We’ve already identified approximately when the uptick in huge VC rounds began: toward the tail end of 2013. But where in the world are all the companies raising these supergiant venture capital rounds?

In response to coverage of July’s record-breaking numbers, many commenters were quick to point out that startups based in China raised six of the top 10 largest rounds from last month.

Indeed, on a recent episode of the Equity podcast discussing the supergiant round phenomenon, Chinese startups’ position in the market was a hot topic of conversation. Someone suggested that a series of large venture rounds in China may have preceded the run-up in supergiant rounds being raised by U.S. startups.

At least in the realm of nine and 10-figure venture rounds, that doesn’t appear to be the case. The chart below breaks down the monthly count of supergiant rounds by the company’s country of origin.

Here is what this data suggests:

  • The first major run-up in nine-figure dealmaking took place in the U.S. around Q1 2014, whereas in China that first run-up didn’t occur until Q4 2014.
  • Especially in the last 24 months or so, supergiant round volume in China and the U.S. is highly correlated, perhaps implying competition in the market.
  • We can see, very clearly, the mini-crash in the U.S. through the second half of 2015. For its part though, China hasn’t yet had a serious “crash” in supergiant rounds during this cycle.
  • Startups outside the U.S. and China are beginning to raise supergiant rounds at a faster rate, although the uptick is significantly less dramatic.

What’s less obvious in the chart above is just how quickly China became a mega-round powerhouse. The chart below plots the same data as above, except this format shows what percent of mega-rounds originated in each market. Additionally, rather than displaying somewhat noisy monthly amounts, we aggregated data in six-month increments.

After the start of 2013, it only took a couple of years for Chinese companies to consistently account for roughly 30 to 40 percent of the $100 million-plus VC rounds raised in any given six-month period.

This also reinforces a trend shown in the prior chart: since the beginning of 2017, Chinese startups and U.S. startups are raising roughly the same number of supergiant venture rounds as one another. That number has risen fairly consistently over time.

Before concluding, it’s worth mentioning that our definition of “supergiant” is ultimately arbitrary. Indeed, $100 million is just a tidy, round-numbered threshold to measure against. Our findings would be similar (if somewhat less dramatic) if we counted, say, the set of rounds raising $50 million or more.

The important underlying trend is that round sizes are getting larger on average. And a supergiant wave of money ultimately lifts all rounds, at least a little bit.

Stay up to date with recent funding rounds, acquisitions and more with the Crunchbase Daily.


from TechCrunch https://ift.tt/2OseNB6

Comments

Popular posts from this blog

Android blatantly copies the iPhone X navigation gestures

Google unveiled some of the new features in the next version of Android at its developer conference. One feature looked particularly familiar. Android P will get new navigation gestures to switch between apps. And it works just like the iPhone X.“As part of Android P, we’re introducing a new system navigation that we’ve been working on for more than a year now,” VP of Android Engineering Dave Burke said. “And the new design makes Android multitasking more approachable and easier to understand.”While Google has probably been working on a new multitasking screen for a year, it’s hard to believe that the company didn’t copy Apple. The iPhone X was unveiled in September 2017.On Android P, the traditional home, back and multitasking buttons are gone. There’s a single pill-shaped button at the center of the screen. If you swipe up from this button, you get a new multitasking view with your most recent apps. You can swipe left and right and select the app you’re looking for.If you swipe up o…

Square launches restaurant point-of-sale platform

Square, which has already made its way into retail stores and service-based businesses (think hair salons, massage therapists, etc), is officially getting into the restaurant business with the launch of Square for Restaurants. Square for Restaurants is a point-of-sale system that handles everything from menu updates, floor layouts, employee scheduling, performance tracking to tip splitting.Usually, restaurants have “some old legacy thing or something else,” Square Seller Lead Alyssa Henry told me.“Historically, we’ve not served this customer segment very well,” Henry said. “With Square for Restaurants, we’re excited to finally be able to serve this customer segment and deliver on a couple of key things that are core to Square but also highly valued by sellers of all types.”This new product is designed to be fast, self-serve, elegant and cohesive, Henry said. It also integrates seamlessly into Square’s existing ecosystem that includes Payroll, Capital and more. Given Square’s ownership…