Toptal Finance has recently released a report highlighting trends in the VC market in 2019. The report notes that whilst there has been an increase with overall investment, there have been fewer VC deal globally.
The reasons credited for this trend are:
1. Fewer companies are being funded;
2. Startups are raising larger rounds and staying private for longer;
3. Growth and value is remaining inside private markets;
4. The increasing number of "mega funds" means private stakes are being maintained for longer; and
5. VC funds are looking towards less risky investments and focusing on more established companies.
Crunchbase data shows first quarter deal volumes of $75 billion, a growth of just 6% YoY. The reasoning behind this slowdown points primarily to dampening appetite for Chinese investments. The second and third quarters are historically the most active investing periods, so as the year unfolds, a clearer picture of this trend will appear. Despite the industry appearing relatively healthy, an unprecedented trend of fewer funded companies, but larger round sizes has emerged.