Alt Investments

Venture Capital Deal Value Expanded In Q2 - Preqin

Tom Burroughes Group Editor 4 July 2016

Venture Capital Deal Value Expanded In Q2 - Preqin

The second quarter saw aggregate deal value rise but the total number of deals fall.

In the second quarter of 2016 there were 2,244 venture capital deals announced globally, worth a combined $40 billion - a 9 per cent quarter-on-quarter rise in the aggregate deal value but a 12 per cent drop from the 2,541 deals seen in the earlier period, according to data from Preqin, a research firm.

Five deals worth $1 billion or more were announced in the quarter, pushing the average size of Q2 equity deals to $23 million, up from $18 million in the opening quarter of the year, a report from the firm said. 

“Despite reports that the opening quarter of the year saw a dearth of exits for venture capital-backed companies, 285 exits were announced globally worth a combined $18 billion,” the report said.

The vast majority of exit value ($23 billion) was achieved through trade sales of venture capital-backed enterprises to other companies.

This year has so far been a “cautious” one for fundraising in the private capital industry, Preqin said, citing issues such as difficult commodity markets and global geopolitics.

The number of private capital funds on the road stands at 2,798, seeking a combined $938 billion. This is an increase in the number of funds in market, but a decrease in the aggregate capital targeted compared to the start of the year. This is the first such reduction since 2014, and is perhaps a sign of smaller funds accounting for a large proportion of new market entrants, the firm said.

 

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